S055625, Opinion — Lamson v. Crater Lake Motors, Inc.

628
Argued and submitted September 17, 2008, decision of Court of Appeals affirmed;
judgment of circuit court reversed, and case remanded to circuit court for
further proceedings August 20, 2009
Kevin L. LAMSON,
Petitioner on Review,
v.
CRATER LAKE MOTORS, INC.,
an Oregon Corporation,
Respondent on Review.
(CC 04-2609-L3; CA A130759; SC S055625)
216 P3d 852
En Banc
On review from the Court of Appeals.*
* Appeal from Jackson County Circuit Court, Daniel L. Harris, Judge. 216 Or
App 366, 173 P3d 1242 (2007).

Cite as 346 Or 628 (2009) 	629
Edward 	H. 	Talmadge, 	of 	Frohnmayer, 	Deatherage,
Jamieson, Moore, Armosino and McGovern, P.C., Medford,
argued the cause and filed the brieffor petitioner on review.
Timothy C. Gerking, of Brophy, Mills, Schmor, Gerking,
Brophy and Paradis, LLP, Medford, argued the cause and
filed the brieffor respondent on review. With him on the brief
was Mark R. Weaver.
Dana L. Sullivan, ofMcKanna Bishop Joffe and Sullivan,
LLP, Portland, filed the brieffor amicus curiae Oregon Trial
Lawyers Association.
Lindsey H. Hughes and Susan J. Mahoney, of Keating
Jones Hughes, P.C., Portland, filed the brief for amicus
curiae Oregon Association of Defense Counsel.
GILLETTE, J.
The decision of the Court of Appeals is affirmed. The judg-
ment of the 	circuit court is 	reversed, 	and 	the 	case is
remanded to the circuit court for further proceedings.

630 	Lamson v. Crater Lake Motors, Inc.
GILLETIE, J.
In this wrongful discharge action, plaintiff seeks
review of a Court of Appeals decision overturning a jury ver-
dict in his favor. Plaintiff argues that, contrary to the Court of
Appeals' view, his discharge was tortious, because he was
fired for engaging in conduct that fulfilled an important soci-
etal obligation. For the reasons set out below, we reject that
argument and affirm the decision of the Court of Appeals.
When this court reviews a grant of a directed verdict,
which, according to the Court of Appeals, the trial court
should have entered in this case, we view the facts in the light
most favorable to the party opposing that motion-in this
case, plaintiff. See Boothby v. D.R. Johnson Lumber Co., 341
Or 35, 38, 137 P3d 699 (2006) (using that standard). Plaintiff
worked as a sales manager for defendant, a car dealership,
for some 15 years before he was fired in 2004. Plaintiff liked
working for defendant; he particularly appreciated the deal-
ership's low pressure approach to selling cars and, in his own
words, its "high degree of ethics and integrity." Plaintiff gen-
erally was a good employee and had no negative reviews or
comments in his employment file.
In September 2003, the dealership hired an outside
sales firm, Real Performance Marketing (RPM), to conduct a
five-day special event, the focus of which would be selling
used cars. Under the contract between defendant and RPM,
RPM would promote and manage the event and provide its
own manager and sales force. Defendant's employees were
not required to participate in the event but, if they did partic-
ipate, RPM's manager would process their sales. The agree-
ment between RPM and Crater Lake contained, inter alia,
provisions that (1) asserted that RPM had "developed certain
professional methods to successfully manage sales events";
(2) promised to put on a sale and "coordinate[ ] every aspect
of the sale"; (3) promised to provide an "Event Sales and
Management Team," including a "sales closer"; (4) stated
that the relationship of the "team" to Crater Lake "will be
that of independent contractor"; (5) promised that RPM
would furnish "up to 10 salespeople to supplement [Crater
Lake's] sales staff'; and specified (6) that "the parties agree

Cite as 346 Or 628 (2009) 	631
that their relationship will, at all times, be that of independ-
ent contractor and client." Crater Lake did not retain any
right to control the actions of RPM or its employees at the
sales event.
When plaintiff learned about the RPM event, he was
apprehensive about "somebody taking over our sales office
and dictating to our sales people and * * * customers." Plain-
tiff also was concerned because he had heard that RPM was
prone to use questionable sales practices. Still, plaintiff told
the dealership's upper management that he would attend the
event and keep an open mind.
Plaintiff attended the first three days of the event.
During that time, he observed RPM staff engaging in sales
tactics that in his view were unethical and/or illegal, includ-
ing misrepresenting the event as a "bank sale," marking cars
with inadequate and potentially misleading pricing informa-
tion, "packing" monthly payments with various insurance
and service contracts without the customers' knowledge, and
tricking customers into signing forms that authorized RPM
to run credit checks.1 On the third day of the event, plaintiff
complained to the dealership's general manager, Shevlin,
about the unethical conduct that he had been observing;
Shevlin told him to ''just go home." The next week, at a meet-
ing of the dealership's managers, plaintiff again voiced his
concerns about RPM's tactics and methods, and he specifi-
cally mentioned some of the conduct that he had observed
during the first three days of the sales event. Plaintiff told
the other managers, including Shevlin, that "if I had to do
business that way, how RPM did it, I'd get out of the car
business."
Several weeks later, Shevlin called plaintiff into his
office after a regular managers' meeting. Shevlin complained
to plaintiff that he had changed, that he "didn't say thank you
anymore," that he was being outsold by as much as $600 per
vehicle by another sales manager, and that he "just wasn't
getting the job done." He then told plaintiff that the dealer-
ship would be having another RPM sales event in March
1 Plaintiff also learned that, prior to the sale, RPM had sent a video to certain
potential customers that misrepresented the price reductions that applied during
the sales event.

632 	Lamson v. Crater Lake Motors, Inc.
2004, and that he wanted to know if plaintiff intended to quit.
Plaintiff told Shevlin that he needed his job and was not
going to quit, and then added, "It sounds like you don't want
me here anymore." Shevlin then responded, ''You're right, I
don't. I don't want the [plaintiff] that's been here the last two
years." Shevlin then insisted that he needed to know by the
following Monday if plaintiff intended to attend the RPM sale
or to quit.
Plaintiff thereafter wrote and delivered a letter to
the dealership's owner, Coleman. In the letter, plaintiff
attempted to explain why plaintiff had decided not to partic-
ipate in the RPM sales event, in spite ofShevlin's ultimatum.
The letter first quoted portions of the dealership's policies
and procedures manual, generally to the effect that employ-
ees were expected to deal fairly and honorably with custom-
ers and to avoid unethical and illegal conduct. It then stated
that plaintiff had observed "consistent misrepresentation,
fraudulent action, deceit, lying, immoral conduct, unethical
conduct and illegal actions" during the first RPM event and
that plaintiff was discouraged that defendant would consider
adopting such sales tactics. The letter ended by encouraging
Coleman to "rethink this profit at any cost mentality, and
reaffirm the policies that [defendant] has adhered to in the
past."
A week later, Coleman met with plaintiff and the
two men talked about plaintiffs concerns about the RPM
event. At the end of that meeting, Coleman handed plaintiff a
letter that stated that the dealership "intend[ed] to continue
its objective of treating customers with the highest ethical
standards," stated that plaintiffs participation in the upcom-
ing RPM event was mandatory, and warned that if plaintiff
failed to participate, "[we] will have no choice but to take
appropriate disciplinary action, including, but not limited to,
discharge."
Plaintiff responded to Coleman in yet another letter,
which he personally delivered to Coleman on February 2-a
few weeks before the scheduled RPM sale. In the letter,
plaintiff stated his intention to continue to deal honestly and
fairly with the dealership's customers and concluded: "It is

Cite as 346 Or 628 (2009) 	633
with this conviction I am basing my decision not to partici-
pate in the upcoming RPM sale or any other RPM sale in the
future." Coleman tried to talk plaintiff out of that decision:
He told plaintiff that the dealership's contract with RPM had
been amended to provide that RPM would not engage in mis-
representations2 and that Coleman would like plaintiff to be
at the sale to make sure that unethical conduct did not occur.
Plaintiff could not be persuaded. He believed that, if he
worked at the second sale, he would be condoning what
occurred at the first sale and would "lose [his] integrity as a
salesman." In the end, Coleman told plaintiff that he would
talk to Shevlin and that either he or Shevlin would get back
to him. It appears, however, that plaintiff had no further dis-
cussions with Shevlin or Coleman about the matter until
after the RPM sales event occurred.
The RPM sales event occurred as scheduled on
Wednesday, March 3 through Sunday, March 7, 2004. Plain-
tiff did not come to work during the RPM sales event and did
not call into the office. On March 8, 2004, the day after the
event ended, plaintiff arrived at the dealership at his regular
time. Shevlin called him to his office and informed him that
he was being terminated for failure to report to work on the
preceding days.
Plaintiff then filed the present action for wrongful
discharge. 3 In his complaint, plaintiff alleged that he had
been discharged for refusing to participate in the March 2004
RPM event and for reporting RPM's unethical and illegal
sales tactics at the October 2003 event to Coleman and
Shevlin. Plaintiff further alleged that both his refusal to par-
ticipate and his reports to upper management fulfilled an
important public purpose-specifically, that "by reporting
these violations, plaintiff was * * * attempting to stop the
unethical and unlawful trade practices which RPM was util-
izing," and that "by refusing to participate in RPM's March
2004 sale***, plaintiff [was] refusing to aid RPM in com-
mitting unlawful trade practices in violation of Oregon law."
2 In fact, the contract between defendant and RPM was amended to prohibit
misrepresentations and illegal statements.
3 Plaintiffs original complaint contained additional claims, which are no
longer part of the case.

Lamson v. Crater Lake 	Inc.
The case proceeded to trial. The jury heard testi-
mony from plaintiff, Shevlin, Coleman, and other employees
of the dealership. At the close of evidence, defendant moved
for a directed verdict on plaintiff's wrongful discharge claim.
In the motion, defendant observed that there was no evidence
or allegation that defendant had ordered plaintiff to himself
violate the company's code of ethics, the Uniform Trade
Practices Act, or any other legal standard. Defendant then
argued that there must be threats or coercion or orders or
instructions for the employee to engage in wrongful, illegal
conduct in order for there to be a claim under these circum-
stances for wrongful discharge. The trial court denied the
motion, ruling that an employee may have a wrongful dis-
charge claim if he or she is discharged for fulfilling an impor-
tant societal obligation and that, in the present case, there
was a jury question as to whether the evidence supported a
wrongful discharge claim on that theory. The jury ultimately
returned a verdict for plaintiff and the trial court entered
judgment in accordance with that verdict.
On 	defendant's 	appeal, 	the 	Court 	of 	Appeals
reversed. Lamson v. Crater Lake Motors, Inc., 216 Or App
366, 173 P3d 1242 (2007). After considering this court's and
its own wrongful discharge cases, the Court of Appeals con-
cluded that the conduct for which plaintiff purportedly had
been discharged did not involve interests of sufficient public
importance to support a claim that plaintiff was discharged
for fulfilling an important societal obligation. Id. at 383. The
court acknowledged that employers may be held liable in tort
for discharging an employee for fulfilling a public duty, and
that an employee's "whistleblowing" about activities in the
workplace sometimes serves a sufficiently important public
interest that discharging the employee for such conduct
would be wrongful. The court suggested, however, that that
principle would not apply when-as in the present case-the
whistleblower's report is internal and does not involve a mat-
ter of public health or safety. Id. at 380-81. The court also
acknowledged that, under its own cases, an important public
duty may be served by an employee's refusal to obey an
employer's order to engage in unlawful or tortious conduct,
and that a discharge in those circumstances could be wrong-
ful. The court concluded, however, that plaintiff's refusal to

Cite as 346 Or 628 	635
participate in the RPM sale did not implicate that principle
because, by his own admission, plaintiff had not been ordered
by defendant to do anything unethical, unlawful, or tortious.
Id. at 382. Finally, the court held that, although preventing
unlawful trade practices clearly is a matter of general public
concern, there is nothing in the record that suggests that
plaintiffs particular act-refusing to report to work because
unlawful trade practices might occur there-enjoys high
social value. Id. at 382-83.
Before this court, plaintiff contends that, when a
plaintiffs wrongful discharge claim alleges that the plaintiff
was discharged for fulfilling some important public obliga-
tion, the proper focus is on whether Oregon law expresses a
general public policy and on whether, in the circumstances of
the particular case, that public policy would be thwarted to
some degree if the plaintiffs employer could discharge him or
her with impunity. Plaintiff argues that the Court of Appeals
erred in focusing, instead, on the particular acts that trig-
gered plaintiffs dismissal and on whether the laws of this
state require such acts or specifically identify them as having
public importance. Plaintiff also argues that the Court of
Appeals erred to the extent that it suggested that only public
policies pertaining to health and 	safety are sufficiently
weighty to give rise to a claim of wrongful discharge. He
asserts that there is no support for that particular distinction
(or, indeed, for the entire notion of weighing public policies)
in this court's principal wrongful discharge cases-Nees v.
Hocks, 272 Or 210, 536 P2d 512 (1975), Delaney v. Taco Time
lnt'l., 297 Or 10, 681 P2d 114 (1984), and Babick v. Oregon
Arena Corp., 333 Or 401, 40 P3d 1059 (2002).
Plaintiff correctly identifies the cases from this court
that are most relevant to his wrongful discharge claim.
Reviewing them at this point facilitates our analysis. In Nees,
this court recognized, for the first time, that, in spite of a gen-
eral and longstanding rule that private employment contin-
ues at the will of the parties and can be terminated by either
party at any time and for any reason, there are "circum-
stances in which an employer discharges an employee for
such a socially undesirable motive that the employer must
respond in damages for any injury done." 272 Or at 218. The
plaintiff in that case was terminated for accepting, over her

636 	Lamson v. Crater Lake 	Inc.
employer's objection, a call to jury duty. This court examined
various Oregon cases, statutes, and constitutional provisions
pertaining to jury duty and the right to trial by jury, and
determined that those sources "clearly indicate[d] that the
jury system and jury duty are regarded as high on the scale of
American institutions and citizen obligations." Id. at 219.
Having established that point, the court concluded that
plaintiff had stated a claim for wrongful discharge because,
"[i]f an employer were permitted with impunity to discharge
an employee for fulfilling her obligation of jury duty, the jury
system would be adversely affected [and t]he will of the com-
munity would be thwarted." Id.
In Delaney, the court further described the "wrong-
ful discharge" action that it first had recognized in Nees. It
began by explaining the court's various wrongful discharge
cases in terms of several categories, only two of which were
recognized as a proper basis for a wrongful discharge claim-
cases in which the plaintiff was discharged for "fulfilling a
societal obligation," 297 Or at 15 (emphasis added) and cases
in which the plaintiff was discharged for "pursuing a right
related to his role as an employee and the right is one of
important public interest indicated by constitutional and
statutory provisions and caselaw." Id. at 16. The court then
held that the discharge at issue in that case-a discharge for
refusing to sign a false and defamatory statement about
another employee's conduct-fell into the first category. That
was so, because evidence of a societal obligation to refrain
from defaming others could be found in the common law and
in two sections of the Oregon Constitution-Article I, section
8, which prohibits the passage oflaws restraining free speech
and expression but warns that "every person shall be respon-
sible for the abuse of this right," and Article I, section 10,
which provides that "every man shall have remedy by due
course oflaw for injury done him in his * * * reputation." Id.
at 17.
Finally, in Babick, this court concluded that the
Court of Appeals erred in overturning a trial court's dis-
missal of wrongful discharge claims brought by security
guards whose employer discharged them for arresting cus-
tomers at a public event for unlawful possession of drugs and
alcohol and other criminal conduct. The Court of Appeals had

Cite as 346 Or 628 	637
concluded that the plaintiffs had stated a claim under the
"discharge for fulfilling a public duty" branch of the wrongful
discharge tree. Babick v. Oregon Arena Corp., 160 Or App
140, 149, 980 P2d 1147 (1999). It perceived evidence, in vari-
ous statutes, that Oregonians value both a safe and orderly
community and reliable and effective law enforcement by cit-
izen officers, and it held that those "policies" would be
"thwarted" if the defendant was permitted to discharge its
employees with impunity for arresting lawbreakers. Id. at
146.
On review, this court stressed that the Court of
Appeals was correct in holding that courts reviewing wrong-
ful discharge claims cannot simply create a relevant public
duty to suit the occasion, but must actually "find" one in the
state's constitutional and statutory provisions and case law.
Babick, 333 Or at 409. But we also held that the statutes that
the Court of Appeals had identified as relevant to the ques-
tion-general public safety statutes and statutes authorizing
and regulating private law enforcement-were "far too gen-
eral" to support a claim of wrongful discharge on a public
duty theory. We observed that "[w]e are concerned here with
a duty to perform a specific act (the arrest of lawbreakers by
private citizens or private security personnel), and the stat-
utes cited have nothing to say about that kind of act." Id. We
then concluded that,
"even accepting the view of the Court of Appeals that a 'pub-
lic duty' may arise out of some expression of a 'substantial
public policy' that would be thwarted by the discharge at
issue (as opposed to a law that specifically obligates an
employee to act in a certain way), plaintiffs have failed to
establish that predicate here."
Id. at410.
The foregoing passage from Babick clearly speaks to
plaintiffs present contentions regarding the proper focus
when a "public duty" wrongful discharge claim is under
review. Notably, however, the passage does not adopt the for-
mulation that plaintiff contends for (i.e., that a "public duty"
wrongful discharge claim exists when some general public
policy expressed in statute, constitution, or case law would be
"thwarted" by the discharge at issue). Rather, it holds that,

638 	Lamson v. Crater Lake 	Inc.
even if a "public duty'' wrongful discharge claim theoretically
could arise in the absence of a law imposing a specific legal
obligation to perform the act or acts that trigger the dis-
charge, the sources of law that express the asserted "public
policy" must in some sense speak directly to those acts. And
because, in Babick, the statutes that the plaintiffs identified
had nothing to say about the law enforcement activities that
triggered the plaintiffs' discharge in that case, this court
could not accept the plaintiffs' contention that those plaintiffs
were wrongfully discharged for acting in accordance with a
public duty. Id.
With those principles in mind, we turn to the issue in
controversy. We begin by examining the legal sources that
plaintiff identifies as pertinent to determine if they reflect a
public policy that is relevant to plaintiff's claim. Plaintiff
relies primarily on the Oregon statute that identifies unlaw-
ful business and trade practices, ORS 646.608, and on certain
of the accompanying regulations, OAR 137-020-0020 and
OAR 137-020-0050. He argues that those sources reflect a
strong public interest in preventing the kinds of sales tactics
that purportedly were used during the RPM sales event.
We do not disagree with that proposition, as far as it
goes. ORS 646.608 expressly defines as unlawful trade prac-
tices, inter alia, making false and misleading representations
about the sources of goods for sale, any price reductions on
those goods, or the nature of the obligations that will be
incurred in a sales transaction. OAR 137-020-0020(3)(m),
also cited by plaintiff, specifically defines as unfair and
deceptive 	the 	practice 	of "packing" car payments 	with
charges for additional services that are not disclosed to the
buyer. And OAR 136-020-0050(2)(g)(C) classifies as deceptive
conduct the practice of headlining an advertisement with an
offer that only applies to a few of the vehicles covered by the
advertisement. In short, we agree with plaintiff that the laws
of Oregon reflect a public policy that generally prohibits and
seeks to prevent the kinds of deceptive conduct that plaintiff
reasonably believes had occurred at the first RPM sales
event, and could occur again.
But how does that point relate to plaintiff's specific
theories of wrongful discharge? Plaintiff first contends that

Cite as 346 Or 628 (2009) 	639
he was wrongfully discharged for refusing to engage in
unlawful and unethical practices. The public policy we have
discussed might be thwarted by such a discharge, and, if the
evidence presented at trial supported plaintiffs claim that he
was fired for refusing a directive to violate state law, a wrong-
ful discharge claim might lie. But the evidence does not sup-
port plaintiffs contention. In fact, plaintiff acknowledged in
his own testimony that his superiors never asked him to do
anything unlawful or unethical.
Plaintiff also alleged that he was wrongfully dis-
charged for complaining to management about what he
reasonably believed to be RPM's illegal and unethical sales
tactics. Inherent in that claim is the notion that defendant's
proffered reason for terminating plaintiff-that plaintiff
skipped four days of work-was pretextual. Plaintiff sug-
gests that the Court of Appeals ignored evidence that would
support a conclusion that the proffered reason was a pretext
and rejected his claim on that ground. Plaintiffs suggestion
is incorrect. In fact, the Court of Appeals assumed that the
evidence was sufficient to support plaintiffs' theory about the
real reason for his termination, but concluded that plaintiffs
claim still fell short, because he had failed to establish that
his internal complaints fulfilled an important public duty or
served an important public interest. Lamson, 216 Or App at
380. And, we also assume that the jury was entitled to con-
clude that the defendant's stated excuse for plaintiffs dis-
missal was pretextual.
Having accepted plaintiffs version of the pivotal
facts, we are left to determine whether plaintiffs internal
complaints to Crater Lake management about RPM's unlaw-
ful and unethical sales practices served a public duty or inter-
est that is sufficiently important to warrant a departure from
the ordinary rules of law respecting discharge from at-will
employment.
As we have already stated, the laws of Oregon
impose a duty on all persons not to engage in unlawful trade
practices. As we recognized in Delaney, an employer that dis-
charges an employee for refusing to engage in practices that
the UTPA prohibits violates that public policy, and we would
have no difficulty recognizing a wrongful discharge action

640 	Lamson v. Crater Lake Motors, Inc.
under those circumstances. It also is arguable 	that an
employer that discharges an employee for reporting to man-
agement that employees were being required by their super-
visors to engage in such unlawful practices also would violate
that public policy. In both situations the employee would, at
least arguably, be fulfilling his or her own duty not to engage
in deceptive practices. For the sake of argument, the same
could be true if, by virtue of his or her position in the corpo-
ration, the employee was responsible for ensuring that the
corporation's acts were lawful and ethical and, in an exercise
of that responsibility, reported to management that the cor-
poration itself was engaging in unlawful practices. However,
we need not decide any of those issues in this case, because
none of the foregoing hypotheticals occurred here.
In this case, defendant did not report to defendant's
management that he had been required to engage in unlaw-
ful trade practices or, in the exercise of his job responsibili-
ties, that defendant corporation was itself engaged in such
practices. Instead, plaintiff reported to defendant's manage-
ment that an outside sales firm with which defendant had
contracted-RPM-had engaged in unlawful practices and
that plaintiff did not think defendant corporation should be
associated with an outside firm of that ilk. Certainly, that
was a defensible point of view, but, in light of the scope of
authority that RPM had over the sales event, it was mis-
directed. At that juncture, the Attorney General and the var-
ious district attorneys were the ones who had authority to act
immediately. See ORS 646.632(1) (authorizing enforcement
action by "prosecuting attorney"); ORS 646.605(5) (defining
"prosecuting attorney" to include Attorney General, district
attorney).
There are instances in which employees may be pro-
tected when they report unlawful actions of others by means
of civil or criminal channels recognized by law, see, e.g., ORS
659A.230(1) 	(prohibiting 	employers 	from 	discriminating
against employee for reporting criminal activity, cooperating
with criminal investigation, and providing remedies), but
again, that is not what happened in this case. Plaintiff did
not report the unlawful trade practices of RPM to any entity
with authority to take action to enforce the UTPA against
RPM.

Cite as 346 Or 628 	641
Plaintiff has proceeded in this wrongful discharge
action on two theories: first, that he was terminated for refus-
ing to engage in unlawful practices, and, second, that he was
terminated for complaining to upper management about
RPM's sales tactics. The evidence would not permit a jury to
find in accordance with the first of those allegations but
would permit a jury to find in accordance with the second.
However, with respect to that second allegation, for the rea-
sons discussed, we cannot find that plaintiff's actions fulfilled
the kind of duty that is protected by actions for wrongful
discharge.
The decision of the Court of Appeals is affirmed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.