Nevada Supreme Court Rejects State Tort Claim for Third-Party Retaliatory Discharge

Volume 14, Issue 11
June 19, 2015

In the recent case of Brown v. Eddie's World, Inc., a unanimous Nevada Supreme Court ruled that an employee has no state common law claim for tortious discharge in violation of public policy (retaliatory discharge) where the employee was discharged in alleged retaliation for the actions of a closely associated third party.

At issue was the termination of Karen Brown, an assistant manager of a candy and nut store, Eddie's World, Inc., after her fiancee filed a complaint with the Nevada Gaming Control Board (GCB) regarding some of the slot machines located in a nearby hotel-casino. Both companies were under common ownership and management. Ms. Brown's fiancee never worked for either company, but management knew he was engaged to Karen Brown. According to Ms. Brown, after her fiancee complained to the GCB, her employer began to assign her job duties to other employees and then fired her. Contending that her discharge was in retaliation for her fiancee's GCB complaint, Ms. Brown brought a state common law claim for tortious discharge in violation of Nevada public policy.

Nevada has long recognized a limited number of common law claims for tortious discharge in violation of public policy, including where the terminated employee complained about suspected illegal conduct to gaming authorities or other regulatory/law enforcement agencies. Yet, the Nevada Supreme Court had not previously addressed whether an employee fired in retaliation for another person's report to law enforcement could bring a state tort law claim for retaliatory discharge.

In considering whether to recognize such a claim, the Court acknowledged that a number of federal fair employment statutes prohibiting retaliatory discharges, such as Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act, have been interpreted to encompass similar third-party retaliation claims - such as the termination of one spouse in retaliation for protected conduct of the other spouse. See KZA Employer Report of December 11, 2011. However, the Court declined to expand Nevada tort law to include claims of third-party retaliatory discharge, noting that state "tortious discharge actions are severely limited," and require an employment relationship with the person whose acts led to the challenged retaliation. In the Court's view, recognition of Ms. Brown's claim would result in the theory of third-party retaliatory discharge having "no logical stopping point."

The four "take-aways" from the Brown decision for employers are:

  • The Nevada Supreme Court continues to view the common law claim for retaliatory discharge in violation of public policy as severely limited to rare and exceptional situations where the employer's conduct violates strong and compelling public policy.
  • An employee who is treated adversely cannot base a common law tort claim upon retaliation for a non-employee's "whistleblowing."
  • An employee can sue under applicable federal fair employment statutes when he or she has suffered an adverse employment action in retaliation for the actions of a closely associated third-party that are protected under such statutes.
  • The Nevada Supreme Court's ruling left open the possibility that an employee who is retaliated against because of the actions of another closely associated employee can maintain a state law tort claim for retaliatory discharge.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.