The opinion of the court was delivered by: Thomas F. Hogan, Chief Judge.
Plaintiff Frank Riggs has sued his former employer, Home Builders
Institute ("HBJ"), its affiliate, the National Association of Home
Builders ("NAHB"), and two NAHB officers, Thomas Downs and Robert
Mitchell, for wrongful termination, tortious interference with contract
and prospective advantage, and civil conspiracy. Defendants HBI, NAHB,
Downs, and Mitchell have moved to dismiss the complaint for failure to
state a claim upon which relief can be granted, pursuant to Federal Rule
of Civil Procedure 12(b)(6). Upon careful consideration of the
defendants' motions to dismiss, the oppositions and replies thereto, and
the entire record herein, the Court will deny HBI's motion and will grant
in part and deny in part NAHB's motion.
Defendant NAHB is a national trade association of home-building
contractors with 210,000 members who are organized into local and state
home builders associations. Id. ¶ 5. Defendant Thomas Downs is NAHB's
Executive Vice President and Chief Executive Officer. Id. ¶ 6.
Defendant Robert Mitchell is NAHB's President. Id. ¶ 7. Defendant HBI
is a non-profit organization that serves as the educational and training
arm of NAHB and is structured as a nonprofit public benefit school,
exempt from taxation under section 501(c)(3) of the Internal Revenue
Code, 26 U.S.C. § 501 (c)(3). HBI's mandate is to enhance the
professionalism of NAHB members through continuing education and to train
and place skilled workers into productive industry careers through
contracts with the federal government and the private sector. Id. ¶
In late 1999, HBI and NAHB agreed to expand HBI's mission to champion
the homebuilding industry among a new generation of youth. In September
1999, HBI acquired a $1 million grant from the U.S. Department of Labor
("DOL") as part of a school-to-work initiative to introduce thousands of
students to the skills and occupations in the home construction
industry. Id. ¶¶ 8-9. HBI and NAHB also formed a search committee to
recruit a new president for HBI to lead its expanded educational
mission. Id. ¶ 10.
After interviewing Riggs, HBI hired him as its President and Chief
Executive Officer ("CEO") on December 6, 1999 to spearhead its education
mission. Id. ¶¶ 10-13. Under a job description provided to Riggs, he
would report to Thomas Woods, the Chairman of HBI's Board of Trustees.
The job description emphasized HBI's independence from NAHB. Id. ¶
10. But NAHB officers, including Downs and Mitchell, nonetheless expected
Riggs to play a political role on behalf of NAHB and to use his influence
as a former Congressman and national leader of the Republican Party to
advance NAHB's efforts to influence political campaigns and legislation.
Id. ¶ 15.
In January 2000, Downs asked Riggs to attend political receptions in
his capacity as President and CEO of HBI for former Congressman Newt
Gingrich and Congressman Rick Lazio at NAHB's International Builders
Show. Riggs attended, but felt "uncomfortable with Downs'[s] request that
he play a political role on NAHB's behalf — particularly with Mr.
Lazio, who, as Chairman of the House of Representatives Housing
Subcommittee at the time, was an influential member of the U.S. House of
Representatives on issues of importance to NAHB." Id. Downs subsequently
asked Riggs to attend the Republican National Convention in August 2000.
Downs also emphasized to Riggs at the time that NAHB had established a $1
million "soft money" fund to distribute to the presidential campaigns
party committees or independent efforts such as "Builders for Bush." Riggs
declined to attend the convention, stating to Downs that HBI's status as
a tax-exempt educational organization prohibited him from participating
in partisan political campaigns. Id. ¶ 16. Downs also urged Riggs to
participate in NAHB's weekly Senior Executive Council meetings, at which
NAHB's political and legislative agenda was routinely discussed. Id.
¶ 17. Mitchell invited Riggs to attend NAHB's Strategic Implementation
Meeting held February 18-20, 2000 in Palm Harbor, Florida. Riggs attended
the Meeting, but excused himself from a half-day session entitled
"Legislative Agenda/National Election Year," fearing that the session
would focus on NAHB plans to influence legislation and political
campaigns. Official minutes from the session reflect that NAHB members
discussed a proposed resolution to support a presidential candidate in
the 2000 election, the formation of political action and fund-raising
groups, and a range of legislative initiatives concerning Brownfields,
international lumber, and Social Security. Id. ¶ 18.
NAHB's leadership reacted angrily to Riggs's refusal to involve himself
in political and legislative activities that he believed would violate
section 501(c)(3) of the Internal Revenue Code and various DOL
regulations, including 20 C.F.R. § 638.814 (a) and (b), and his
insistence upon HBI's legal autonomy from NAHB. Compl. ¶¶ 19-23. NAHB
officers, including Downs and Mitchell, mounted a campaign to remove
Riggs from the HBI presidency by undermining his efforts as President.
Id. ¶¶ 24-25. Despite a decision made by HBI staff during a March 2000
retreat to transfer NAHB's continuing member education and training
programs from NAHB to HBI, for example, Riggs experienced hostility and
obstruction from Downs and Mitchell when trying to implement the
strategic plan. Id. ¶ 26. Downs further refused Riggs's request to
present the plan to senior officials of NAHB at a meeting to be held at
the Greenbrier in April 2000, choosing instead merely to refer to a
letter written by Riggs. Id. ¶¶ 27-30. Minutes from the meeting
reflect that senior officers at the meeting discussed the "`reporting
relationship' between HBI's president and NAHB's CEO as a `difficult
situation that need[ed] to be addressed immediately' "and decided to
contact their appointees to the HBI Board to determine "future action."
Id. ¶ 30.
On April 17, 2000, Downs informed Riggs that NAHB's senior officers had
unanimously decided to terminate his employment. Id. ¶ 31. HBI's
Board of Trustees were not involved in the decision of NAHB's senior
officers to terminate Riggs's employment, and Woods refused to give Riggs
permission to address the full HBI Board of Trustees about his termination
out of deference to NAHB and its senior officers. Id. ¶¶ 32-33. Woods
then exerted pressure upon Riggs to submit his resignation, and having
not received his resignation by May 5, 2000, the Executive Committee of
HBI's Board of Trustees voted to terminate his employment, which was
ratified by the full board on May 13, 2000. Id. ¶¶ 34-38.
On February 26, 2001, Riggs filed a complaint against Defendants,
alleging three counts.*fn2 Count I charges HBI with wrongful discharge
in violation of public policy. Id. ¶¶ 41-47. Count II alleges tortious
interference with contract and
prospective advantage against NAHB, Downs, and Mitchell. Id. ¶¶ 48-54.
Count III charges all the defendants with civil conspiracy to wrongfully
terminate his employment with HBI. Id. ¶¶ 55-58. Riggs seeks an award
of compensatory and consequential damages in an amount of no less than
$2,000,000, punitive damages against each of the defendants in the amount
of $5,000,000, reinstatement and back pay, and attorneys' fees and
costs. Id. at 24.*fn3 All the defendants have moved to dismiss Riggs's
complaint, contending that it fails to state a claim upon which relief
may be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6).
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6)
will be granted only if "it appears beyond doubt that the plaintiff can
prove no set of facts in support of his claim which would entitle him to
relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80
(1957); see Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct.
2229, 81 L.Ed.2d 59 (1984) ("A court may dismiss a complaint only if it
is clear that no relief could be granted under any set of facts that
could be proved consistent with the allegations."). In reviewing such a
motion, the Court must construe the complaint in the light most favorable
to plaintiff and must accept as true all allegations and all reasonable
factual inferences drawn from well-pleaded factual allegations. See
Square D. Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U.S. 409,
411, 106 S.Ct. 1922, 90 L.Ed.2d 413 (1986); In re United Mine Workers
Employee Benefit Plans Litig., 854 F. Supp. 914, 915 (D.D.C. 1994).
"However, the court need not accept inferences drawn by plaintiffs if
such inferences are unsupported by the facts set out in the complaint.
Nor must the court accept legal conclusions cast in the form of factual
allegations." Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276
(D.C.Cir. 1994) (citing Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct.
2932, 92 L.Ed.2d 209 (1986)).
1. Wrongful Discharge, Civil Conspiracy, and Defendant HBI
(a) District of Columbia's At-Will Employment Doctrine
There is no dispute between the parties in this case over the fact that
Riggs's employment with HBI was at-will. And as a general rule, District
of Columbia law has long recognized the at-will employment doctrine,
which states that "an employer may discharge an at-will employee at any
time and for any reason, or for no reason at all." Adams v. George W.
Cochran & Co., 597 A.2d 28, 30 (D.C. 1991) (citing Wemhoff v.
Investors Mgmt. Corp., 528 A.2d 1205, 1208 n. 3 (D.C. 1987); Taylor v.
Greenway Restaurant, Inc., 173 A.2d 211 (D.C. 1961); Pfeffer v. Ernst,
82 A.2d 763, 764 (D.C. 1951)). In Adams, however, the D.C. Court of
Appeals recognized an intentional tort for wrongful discharge, holding
that "there is a very narrow exception to the at-will doctrine under
which a discharged at-will employee may sue his or her former employer
for wrongful discharge when the sole reason for the discharge is the
employee's refusal to violate the law, as expressed in a statute or
municipal regulation." 597 A.2d at 34. The
plaintiff in Adams was a truck driver who was fired after he refused to
drive a truck that did not have an inspection sticker on its windshield,
which would have been illegal under municipal regulations. Id. at 29-30
& n. 1 (citing 18 DCMR § 602.4 (1987)). In recognizing the
"narrow exception" to the at-will doctrine, the court reasoned:
Adams was forced to choose between violating the
regulation and keeping his job — the very choice
which . . . he should not have been required to make.
Even though the criminal liability facing him was not
very great, it was nonetheless unacceptable and
unlawful for his employer to compel him to choose
between breaking the law and keeping his job.
The D.C. Court of Appeals initially resisted further expansion of the
"narrow exception" recognized in Adams. In Gray v. Citizens Bank of
Washington, for example, the court "[c]onclud[ed] under [prior] decisions
that a division of the court is not free to expand the Adams exception"
and thus affirmed the dismissal of a complaint by a plaintiff bank
official who was fired after reporting to a senior official on numerous
occasions evidence of possible illegal conduct by another managerial
employee related to bank operations. 602 A.2d 1096, 1096-97 (D.C. 1992),
overruled by Carl v. Children's Hosp., 702 A.2d 159, 160 (D.C. 1997) (en
banc) ("There is nothing in the Adams opinion that bars this court
— either a three-judge panel or the court en banc — from
recognizing some other public policy exception when circumstances warrant
such recognition. On this point a majority of the en banc court agrees.
To the extent that Gray v. Citizens Bank holds differently, it is
overruled."). In Thigpen v. Greenpeace, Inc., the court similarly
affirmed the dismissal of a complaint by a plaintiff payroll clerk who
had discovered his employer's violation of D.C. minimum wage laws,
notified two superiors of violations, filed a complaint after no action
was taken, and was discharged. 657 A.2d 770, 771 (D.C. 1995). The court
explained that the Adams "exception requires an outright refusal to
violate a specific law, with the employer putting the employee to the
choice of breaking the law or losing his job." Id. And in Washington v.
Guest Services., Inc., the court affirmed summary judgment in favor of
employer, albeit only preliminarily, based upon the trial court's
conclusion that the employer had not put the plaintiff dietary aide and
cook at a retirement home, who had alleged that she had been wrongfully
discharged in retaliation for attempting to ensure compliance by a fellow
employee with D.C. health a food regulations, "to the choice of
disobeying [her obligation not to prepare or serve unfit food] as the
price for keeping her job." 703 A.2d 646, 646 (D.C. 1997) (per curiam).*fn4
Despite its initial resistance to expansion of the public policy
exception to the at-will doctrine, however, the court eventually
clarified in Carl that "the "very narrow exception' created in Adams
should not be read in a manner that makes it impossible to recognize any
additional public policy exceptions to the at-will doctrine that may
warrant recognition." 702 A.2d at 160.
The plaintiff in Carl, a part-time nurse, alleged that she had been
wrongfully discharged because she had advocated for patients' rights and
against her employer's interests both before the Council of the District
of Columbia and in court as an expert witness for plaintiffs in medical
malpractice cases. Id. She relied principally upon the policy embodied by
D.C.Code § 1-224 (1992), which made it a criminal offense "to
corruptly or by threat of force, or by any threatening letter or
communication, endeavor to influence, intimidate, or impede any witness
in any proceeding pending before the Council." D.C.Code § 1-224
(1992), quoted in, Carl, 702 A.2d at 160 n. 2. She did not claim that her
former employer had threatened her or otherwise violated section 1-224 or
that the statute created a private right of action, but rather, that her
termination was actionable as a public policy exception to the at-will
doctrine. A division of the D.C. Court of Appeals affirmed the trial
court's denial of relief because of the court's prior cases. Carl, 702
A.2d at 159. But the court granted the plaintiffs petition for rehearing
en banc "to consider her contention that the narrow public policy
exception to the employment-at-will doctrine first recognized in [Adams]
should be expanded to include the rights of employees to speak out
publicly on issues affecting the public interest without fear of
retaliation by their employers." Id. A majority of the en banc court held
that Adams did "not foreclose any additional "public policy' exceptions
to the general rule that employment contract are always at will unless
they expressly-provide otherwise," id., and that the complaint stated a
claim upon which relief could be granted because it fell within a public
policy "solidly based" on, or "firmly anchored" in, section 1-224, id. at
163-64 & n. 6 (Terry, J., concurring); see Washington, 718 A.2d at
1080. The court, through a concurring opinion penned by Judge Terry,*fn5
articulated the following standard for the appropriate case-by-case
analysis for recognizing additional public policy exceptions under Carl:
Future requests to recognize such exceptions,
therefore, should be addressed only on a case-by-case
basis. This court should consider seriously only those
arguments that reflect a clear mandate of public
policy — i.e., those that make a clear showing,
based on some identifiable policy that has been
"officially declared" in a statute or municipal
regulation, or in the Constitution, that a new
exception is needed. Furthermore, there must be a
close fit between the policy thus declared and the
conduct at issue in the allegedly wrongful
Carl, 702 A.2d at 164 (Terry, J., concurring) (footnotes omitted); see
Fingerhut v. Children's Nat'l Med. Ctr., 738 A.2d 799, 803 (D.C. 1999).
Clarifying the required relationship between the particular public policy
at issue and the statute or regulation from which it should be derived,
the court further cautioned that "lest we allow "public policy'
exceptions to swallow up the at-will doctrine . . . the recognition of
any such exception must be firmly anchored either in the Constitution or
in a statute or regulation which clearly reflects the particular "public
policy' being relied upon." Carl, 702 A.2d at 162 (Terry, J.,
concurring); see Fingerhut, 738 A.2d at 803 n. 7.*fn6
The court then held that Carl could be retroactively applied to the
plaintiffs complaint in Washington v. Guest Services, Inc. 718 A.2d 1071,
1072, 1074-80 (1998). As discussed above, the plaintiff in Washington was
a former dietary aide and cook at a retirement home who alleged that her
employment had been wrongfully terminated in retaliation for her attempts
to ensure compliance by a fellow employee with D.C. health a food
regulations. She proffered a sworn affidavit specifically stating that
she had directed a fellow employee to stop spraying stainless steel
cleaner in the area where she was cooking and that the manager who had
instructed the other employee to spray the cleaner accused her of
insubordination, which was the sole reason he terminated her. Id. at
1072-73. She claimed that her coworker's action of spraying the cleaning
material near the food she was cooking violated various D.C. food and
health regulations and that she had been terminated "for protesting
safety, health, and food code violations on the part of the defendant."
Id. at 1073 & n. 1 (citing 23 DCMR §§ 2101.1, 2200.2, 3010.1
(1990) and D.C.Code § 22-3416 (1996)). Despite the court's earlier
preliminary affirmance of summary judgment for the employer, the court
concluded after further briefing from the parties that Carl could be
retroactively applied to the case, and it held under Carl that the
allegations contained in the plaintiffs sworn affidavit were sufficient
to survive summary judgment: "To permit an employee to be fired for such
actions would undermine the purposes of the food and health regulations
and would frustrate the public policy of which these regulations are an
expression." Id. at 1080-81.
We conclude that Fingerhut has made the requisite allegations under
three statutes on which he relies, §§ 4-142, 22-704
and 4-175, in concert with § 4-114 and its
implementing regulations, "reflect a clear mandate of
public policy" that has been declared in statute and
regulation: a policy against the termination of a
special police officer who records and reports a bribe
of a government official, and who assists the FBI in
the investigation of corrupt influence with respect to
a federal government construction grant. There is a
"close fit," Carl, [ ] 702 A.2d at 164, between this
policy and CNMC's alleged decision not only to
terminate Fingerhut after he informed CNMC of pending
arrests and his role in the investigation of the
bribe, but also to fill Fingerhut's position with the
Assistant Director of Security even though the stated
reason for Fingerhut's termination was a reduction in