- The 4th US Circuit Court of Appeals will allow three fired substance abuse counselors in North Carolina to proceed with a lawsuit against their former employer.
- The counselors argue they were fired in violation of public policy set out in state law.
- Appellate judges agreed that the counselors made a plausible case that their dismissals violated the Substance Use Disorder Professional Practice Act and its regulations.
The 4th US Circuit Court of Appeals will allow three substance abuse counselors to proceed with a lawsuit against the North Carolina employer who fired them in 2021. The counselors argued that the dismissals violated public policy set out in state law.
“North Carolina adheres to the presumption of ‘at-will’ employment,” wrote Appeals Court Judge Nicole Berner Wednesday for a unanimous three-judge panel. “This means that, unless otherwise agreed upon by employment contract or a collective bargaining agreement, an employee may generally be terminated for no reason, or even for an arbitrary or irrational reason.”
“While applicable in most cases, this presumption is not inviolate,” Berner continued. “To the contrary, it is subject to a number of exceptions, some statutory and others developed through common law. Wrongful termination in violation of public policy is one such common law exception.”
Kim Shook, Kylie Scolaro-Conti, and John Szwyd argued that employers Appalachian Community Services and ncgCARE, labeled NCG in court documents, fired them in violation of North Carolina’s Substance Use Disorder Professional Practice Act “and its attendant regulations.”
The three counselors’ lawsuit highlighted an incident in March 2021 that led to their firing.
After a call from a client “experiencing extreme mental distress” who was not following her prescribed treatment program, Shook and Scolaro-Conti developed a plan that would lead the client to inpatient treatment. Their supervisor Szwyd got involved as the plan moved forward.
Inpatient hospitalization required a letter from NCG to the client’s probation officer. Company policy required that another employee, Jessica Tewell, review and co-sign the document.
“Rather than approving Scolaro-Conti’s draft, Tewell replaced certain clinical information with false and inaccurate information,” Berner wrote. “Critically, Tewell modified the treatment recommendation for the Client from a ‘higher level of care’ to a ‘different level of care.’ Without a recommendation for a ‘higher level of care,’ the Client could not be moved to inpatient hospitalization, which the Counselors believed was clinically indicated.”
The counselors “attempted repeatedly” over more than a week to restore the “higher level of care” language, but Tewell “steadfastly refused,” according to the 4th Circuit opinion. NCG submitted the modified letter. The client never received inpatient treatment.
“Three days after Shook sent the letter, the Client died of a drug overdose,” Berner wrote.
Concerned that Tewell’s actions might have contributed to the client’s death, Szwyd discussed the incident with a higher-level NCG manager, regional director Ron Ross.
“Ross responded to Szwyd’s concerns with a warning: ‘if I were you, I would watch what you say and who you say it to,’ Shocked by this response, Szwyd asked whether he should have reported the matter to someone else. Ross responded that he was, in fact, the right person to receive the report and informed Szwyd that the matter would be investigated internally,” Berner wrote.
NCG fired the three counselors nine days later.
Months after their dismissal, the counselors filed a complaint with the North Carolina Department of Health and Human Services. State officials “conducted an unannounced investigation of NCG’s facilities and found Tewell had violated North Carolina law,” the 4th Circuit opinion explained.
The counselors also sued NCG for wrongful termination “in violation of public policy.” US District Judge Martin Reidinger dismissed the case.
“Because the provisions of SUDPPA and its attendant regulations specified by the Counselors in the complaint govern their profession, we agree with the district court that they constitute an expression of North Carolina public policy,” Berner wrote.
“NCG argues that it would not be appropriate for us, as a federal court sitting in diversity jurisdiction, to be the first court to recognize SUDPPA as the express public policy of North Carolina. We disagree,” Berner explained. “While it would be improper for us to expand state law, applying it is squarely within our purview.”
Appellate judges rejected the employers’ arguments.
“The Counselors informed NGC Regional Director Ross about NCG Assistant Director Tewell’s refusal to approve their recommended care plan,” Berner wrote. “They told Ross that Tewell substantively changed the text of the draft letter to the probation officer in the face of repeated requests to leave the Counselors’ recommendation as written. The Counselors also shared their view that these changes prevented the Client from being moved to inpatient treatment and may have contributed to her death.”
“NCG argues that Assistant Director Tewell’s modification of the letter was purely ‘semantic,’ and the Counselors’ wrongful termination claim hinges solely upon the change of ‘one word’ in their draft letter. The allegations in the complaint demonstrate otherwise. The Counselors describe additional changes Tewell made to the letter, including replacing certain clinical information with inaccurate information,” the 4th Circuit opinion continued.
“Even if it were true that Tewell changed only one word in the letter, the Counselors allege that altering this particular word significantly impacted the Client’s care,” Berner explained. “Not only is the distinction between a ‘higher level of care’ and ‘different level of care’ an obvious one — ‘different’ can also mean a lower level of care — but also, inpatient hospitalization would only be available under a higher of level of care in accordance with the standards established by the American Society of Addiction Medicine.”
“Based on the facts set forth in the complaint, we find the Counselors plausibly allege NCG terminated them in retaliation for complying with their professional obligations under SUDPPA and its attendant regulations,” the opinion continued.
“Because the Counselors identify a specific public policy of the State of North Carolina and they allege facts sufficient to show their termination contravened this public policy, we hold the Counselors plausibly allege a cause of action for wrongful termination in violation of the express public policy of the State of North Carolina,” Berner concluded.
Judges Stephanie Thacker and DeAndrea Gist Benjamin joined Berner’s opinion.