§ 6.1.8 EXCLUSIVITY.

• Jurisdiction: Arizona

§ 6.1.8 Exclusivity. Relying on Wagenseller, the plaintiff in Broomfield v. Lundell³³⁵ asserted a wrongful discharge claim based on sex discrimination in violation of the ACRA.³³⁶ The employer argued in substance that the ACRA embodied an effective and comprehensive legislative scheme, including a cause of action, administrative and judicial proceedings and remedies available to individuals who claim to have been the victims of discrimination. Such comprehensive legislation, the employee argued, evinced a legislative intent to occupy the field and provide such claimants with the sole and exclusive remedy for such proscribed activities, and thus operated to preempt a wrongful discharge claim premised on Wagenseller.³³⁷

The court, after reviewing Wagenseller and Ford v. Revlon, Inc.,³³⁸ concluded that the ACRA did not preempt a wrongful discharge tort claim based on the public policy exception.³³⁹ It also noted that the Ninth Circuit, in Bernstein v. Aetna Life & Casualty Co.,³⁴⁰ predicted that an Arizona court would rule that there was no preemption in such a situation,³⁴¹ based in part on Ford.³⁴² The Broomfield court observed:

Our state legislature in enacting the Arizona Civil Rights Act has clearly established a public policy against employment discrimination. . . . We hold that the Arizona Civil Rights Act does not preempt a tort action for wrongful discharge. We base this on the absence of express language in the Act indicating preemption as well as the decisions in Wagenseller, Ford, and Bernstein.³⁴³

In Kelley v. City of Mesa,³⁴⁴ an Arizona federal district court judge applied Broomfield to hold that the ACRA does not preempt a tort claim for violation of the public policy reflected in the act's disability discrimination provisions.³⁴⁵ In Spratt v. Northern Automotive Corp.,³⁴⁶ the court held that the provisions of the ACRA making it unlawful for an employer to terminate an employee for opposing discriminatory practices would also support a common law claim for wrongful discharge in violation of public policy.³⁴⁷ However, Broomfield, Bernstein, Kelley and Spratt have effectively been overruled by the EPA,³⁴⁸ which makes the remedies set forth in the ACRA the exclusive remedies for violations of the public policies expressed therein.³⁴⁹

In Wichita v. Pima County,³⁵⁰ the Arizona Court of Appeals held that a Pima County employee's successful appeal of her termination under the County's merit system rules prevented her from pursuing a separate common law tort claim for wrongful termination,³⁵¹ because the rules' provision for an appeal to the merit commission (whose decision would be "final") provided the employee with a remedy for the termination.³⁵² In Guertin v. Pinal County,³⁵³ the court held that the plaintiff's wrongful discharge claim was barred by his unsuccessful appeal of his termination to the merit commission.³⁵⁴ Relying on Wichita, the Guertin court held that the exclusive remedy for the plaintiff's termination was through an appeal of the merit commission's adverse decision in accordance with the Administrative Review Act.³⁵⁵ The court also held that the plaintiff was collaterally estopped from relitigating the merit commission's finding of good cause for his termination,³⁵⁶ even though the plaintiff did not seek judicial review of that finding,³⁵⁷ because a "party's failure to appeal a final administrative decision makes that decision final and res judicata."³⁵⁸

In Walters v. Maricopa County,³⁵⁹ the Arizona Court of Appeals held that a nonclassified public employee could pursue a wrongful termination claim premised on the public policy exception without first exhausting the administrative remedy available to him under the Arizona Public Employee Disclosure of Information Act,³⁶⁰ occasionally referred to as the state "whistle-blowing statutes,"³⁶¹ because that remedy, which involves a hearing before the state personnel board or another statutorily designated board,³⁶² was permissive rather than mandatory.³⁶³ The court held that a nonclassified public employee making such a claim "may file either a wrongful discharge action in court or an administrative complaint,"³⁶⁴ and that an employee who seeks relief through the administrative process and is dissatisfied with the outcome of that process may appeal the personnel board's decision to the Superior Court,³⁶⁵ "where review is de novo."³⁶⁶ The court concluded that the common law claim was not barred by the exclusivity provisions of the EPA³⁶⁷ because another section of the EPA specifically "allows an employee who is discharged to file a civil action for wrongful discharge if whistle-blowing is alleged."³⁶⁸ The court therefore interpreted the whistleblowing statutes as creating "an alternative, permissive administrative remedy that leaves open the opportunity for an employee to file an original action [for wrongful discharge] in the superior court."³⁶⁹

In Mullenaux v. Graham County,³⁷⁰ the Arizona Court of Appeals declined to extend the analysis in Walters,³⁷¹ holding that a classified public employee must exhaust the administrative remedies available to the employee under the County Employee Merit System³⁷² before pursuing a judicial remedy for wrongful termination in violation of public policy under the EPA.³⁷³ Because the plaintiff failed to exhaust those remedies, the Mullenaux court held that "his action for wrongful discharge . . . was premature."³⁷⁴

In Gorney v. Arizona Board of Regents,³⁷⁵ the plaintiff alleged that his employment with the University of Arizona was terminated because he reported the wrongful conduct of his supervisor and other University employees.³⁷⁶ When his employment was terminated, he requested, and received, a post-termination administrative hearing pursuant to University policy.³⁷⁷ After the hearing panel found sufficient grounds for the University to terminate the plaintiff's employment,³⁷⁸ and the University accepted the panel's recommendation that the termination therefore be upheld,³⁷⁹ the plaintiff was advised of his right to appeal the termination decision to Superior Court under the Administrative Review Act.³⁸⁰ However, the plaintiff elected not to seek judicial review of the hearing panel's decision,³⁸¹ but instead initiated a separate action asserting a claim against the University for wrongful discharge in violation of public policy under the EPA.³⁸²

The court held that the plaintiff was collaterally estopped from pursuing his wrongful discharge claim because he failed to appeal the hearing panel's ruling in favor of the University.³⁸³ Relying on Guertin, Walters and Mullenaux,³⁸⁴ as well as the Ninth Circuit's observation in Olson v. Morris³⁸⁵ that "[u]nder Arizona law, a party's failure to appeal a final administrative decision makes that decision final and res judicata,"³⁸⁶ the Gorney court explained that "the existence of sufficient grounds to terminate [the plaintiff] is conclusively established by the unappealed Hearing Decision. Therefore, [the plaintiff] is precluded from alleging in this action that he was terminated in violation of public policy."³⁸⁷

In Dorrance v. Valley National Bank,³⁸⁸ the Arizona Court of Appeals held that a tort claim for wrongful discharge by a bank officer who allegedly was terminated for reporting possible acts of misconduct by another bank employee was preempted by the National Bank Act.³⁸⁹ The court concluded that there is no public policy exception to the federal act's language "permitting dismissal of [a bank] officer at the pleasure of the [bank's] board of directors."³⁹⁰

The plaintiff in Spieth v. Adasen Distributing Inc.³⁹¹ asserted a tort claim for wrongful discharge in violation of public policy based upon the contention that she had been...