FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`HELEN ARMSTRONG,
`Plaintiff-Appellant,
`
`
`
` No. 20-15256
`
`D.C. No.
`2:17-cv-02528-
`APG-DJA
`
`
`OPINION
`
`v.
`
`
`TERRY REYNOLDS; STEVE GEORGE;
`JESS LANKFORD; LARA PELLEGRINI,
`Defendants-Appellees.
`
`Appeal from the United States District Court
`for the District of Nevada
`Andrew P. Gordon, District Judge, Presiding
`
`Argued and Submitted May 3, 2021
`Seattle, Washington
`
`Filed January 13, 2022
`
`Before: Danny J. Boggs,* A. Wallace Tashima, and
`Marsha S. Berzon, Circuit Judges.
`
`Opinion by Judge Berzon
`
`
`
`
`
`* The Honorable Danny J. Boggs, United States Circuit Judge for
`the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
`
`
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`HELEN ARMSTRONG,
`Plaintiff-Appellant,
`
`
`
` No. 20-15256
`
`D.C. No.
`2:17-cv-02528-
`APG-DJA
`
`
`OPINION
`
`v.
`
`
`TERRY REYNOLDS; STEVE GEORGE;
`JESS LANKFORD; LARA PELLEGRINI,
`Defendants-Appellees.
`
`Appeal from the United States District Court
`for the District of Nevada
`Andrew P. Gordon, District Judge, Presiding
`
`Argued and Submitted May 3, 2021
`Seattle, Washington
`
`Filed January 13, 2022
`
`Before: Danny J. Boggs,* A. Wallace Tashima, and
`Marsha S. Berzon, Circuit Judges.
`
`Opinion by Judge Berzon
`
`
`
`
`
`* The Honorable Danny J. Boggs, United States Circuit Judge for
`the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
`
`
`
`ARMSTRONG V. REYNOLDS
`
`SUMMARY**
`
`2
`
`
`
`
`
`Civil Rights
`
`
`The panel affirmed in part and reversed in part the
`
`district court’s dismissal of plaintiff’s claims brought
`pursuant to 42 U.S.C. § 1983 and Nevada state law against
`four state officials arising from plaintiff’s termination from
`her workplace, Ear Nose and Throat Associates, after she
`filed complaints with the Nevada Occupational Safety and
`Health Administration regarding unsafe medical practices at
`her workplace.
`
` After attempting without success to raise her concerns
`with her employer, plaintiff Helen Armstrong filed a
`complaint with the Nevada Occupational Safety and Health
`Administration (NOSHA). Nevada law supports and
`encourages such reporting by prohibiting retaliation against
`whistleblowers who report health and safety hazards. Nev.
`Rev. Stat. § 618.445. Armstrong alleges that Ear, Nose and
`Throat Associates (ENTA) retaliated against her, leading her
`to return to NOSHA to file a second complaint. But when
`Armstrong withdrew the whistleblowing complaint for fear
`of further retaliation—before ENTA learned of it—NOSHA
`notified ENTA about the complaint and, Armstrong alleges,
`more retaliation followed.
` When she filed a third
`whistleblowing
`complaint, NOSHA
`scuttled
`any
`investigation. Eventually, ENTA fired Armstrong.
`
`The panel first reversed the dismissal of Armstrong’s
`
`procedural due process claim. The panel held that even
`
`** This summary constitutes no part of the opinion of the court. It
`has been prepared by court staff for the convenience of the reader.
`
`
`
`3
`
`ARMSTRONG V. REYNOLDS
`
`
`
`though Armstrong conceded that she was an at-will
`employee, Nevada law has created limited exceptions to at-
`will employment and protections for whistleblowers that can
`support a property interest in continued employment.
`Although the panel agreed with defendants that Armstrong
`had not plausibly alleged that their conduct as state actors
`caused her to be fired, citing Johnson v. Duffy, 588 F.2d 740,
`743–44 (9th Cir. 1978), the panel noted that the information
`contained in Armstrong’s briefing suggested that she might
`be able to plausibly allege a relationship between the
`defendants and her termination sufficient to sustain either a
`“direct participation” or “setting
`in motion”
`theory.
`Accordingly, the panel held that Armstrong must be granted
`leave to amend her complaint.
`
`The panel next considered Armstrong’s contention that,
`
`in addition to interfering with her right to continued
`employment by causing her to be fired, defendants deprived
`her of a property interest in being reinstated by failing to
`investigate her retaliation complaint, as they were obligated
`to do under Nevada law. The panel agreed with Armstrong
`that Nevada’s statute created a property interest beyond
`continued employment, but not that that interest extended to
`reinstatement. Thus, the panel held that the district court
`erred in holding that Armstrong did not have a property right
`in the investigation of her whistleblowing complaint because
`§ 618.445 creates a protected property interest in an
`investigation and in an action brought in court on behalf of
`those whose claims have merit.
` The panel further
`determined that the complaint plausibly alleged that the
`process Armstrong received was essentially nonexistent and
`so constitutionally deficient. The panel concluded that with
`respect to the due process claim, Armstrong demonstrated a
`protected property interest in an investigation and to some
`degree, in continued employment.
`
`
`
`ARMSTRONG V. REYNOLDS
`
`4
`
`The panel agreed with the district court that Armstrong
`
`had not sufficiently alleged a substantive due process claim
`based on a liberty interest. Thus, Armstrong had not
`plausibly alleged that she was unable to pursue an entire
`occupation, nor did the complaint allege any facts supporting
`the calculation of 13 years of lost future employment, or
`otherwise suggest
`that defendants’ actions entirely
`precluded Armstrong’s ability to work as a human resources
`professional elsewhere. Accordingly, the panel held that the
`district court did not err in dismissing Armstrong’s
`substantive due process claim and denying Armstrong leave
`to amend her complaint.
`
` Addressing the negligent infliction of emotional distress
`claim—that NOSHA official Lara Pellegrini negligently
`notified plaintiff’s employer about her complaint—the panel
`held that the district court erred in concluding that the claim
`was subject to Nevada’s discretionary function immunity
`statute. Applying the Berkovitz-Gaubert test, the panel held
`that Pellegrini had offered no cognizable social, political, or
`economic reason for her allegedly negligent action. Finally,
`the panel held that the district court did not err in dismissing
`Armstrong’s civil conspiracy claim as barred by the
`intracorporate conspiracy doctrine, but that the district court
`abused its discretion in dismissing the claim without leave to
`amend.
`
`
`
`
`
`
`
`
`
`ARMSTRONG V. REYNOLDS
`
`5
`
`COUNSEL
`
`
`Phillip Spector (argued), Messing & Spector LLP,
`Baltimore, Maryland; Noah Messing, Messing & Spector
`LLP, New York, New York; John Napier Tye,
`Whistleblower Aid, Washington, D.C.; for Plaintiff-
`Appellant.
`
`Jeffrey Morgan Conner (argued) and Vivienne Rakowsky,
`Deputy Assistant Attorneys General; Office of the Attorney
`General, Las Vegas, Nevada; for Defendants-Appellees.
`
`
`
`OPINION
`
`BERZON, Circuit Judge:
`
`Helen Armstrong witnessed unsafe medical practices in
`her workplace, Ear Nose and Throat Associates (ENTA).
`After attempting without success to raise her concerns with
`her employer, Armstrong filed a complaint with the Nevada
`Occupational Safety and Health Administration (NOSHA).
`Nevada law supports and encourages such reporting by
`prohibiting retaliation against whistleblowers who report
`health and safety hazards. Nev. Rev. Stat. § 618.445.
`
`Armstrong alleges that ENTA did retaliate against her,
`leading her to return to NOSHA to file a second complaint
`against ENTA.
` But when Armstrong withdrew the
`whistleblowing complaint for fear of further retaliation—
`before ENTA learned of it—NOSHA notified ENTA about
`the complaint and, Armstrong alleges, more retaliation
`followed. When she filed a third whistleblowing complaint,
`NOSHA scuttled any investigation. Eventually, ENTA fired
`Armstrong.
`
`
`
`6
`
`
`ARMSTRONG V. REYNOLDS
`
`Armstrong sued four Nevada state officials in their
`individual capacities under 42 U.S.C. § 1983, alleging that
`the officials violated her substantive and procedural due
`process rights and further alleging violations of both state
`and federal statutes and regulations. She also brought
`Nevada state law claims for civil conspiracy, intentional and
`negligent infliction of emotional distress, fraud, and
`malfeasance, misfeasance, or nonfeasance in office. The
`district court dismissed all the claims.
`
`Armstrong now appeals the dismissal of her due process,
`negligent infliction of emotional distress (NIED), and civil
`conspiracy claims. We reverse the dismissal of Armstrong’s
`procedural due process and NIED claims, affirm the
`dismissal of her substantive due process claim, reverse the
`district court’s denial of leave to amend some of her claims,
`and remand for further proceedings.
`
`I.
`
`Helen Armstrong worked as a supervisor in human
`resources at ENTA. She had been with the company for
`twenty-three years at the time of these events. In February
`2014, Armstrong and a coworker filed whistleblower
`complaints with NOSHA against ENTA, describing unsafe
`practices, including the use of contaminated syringes and
`sale of expired prescriptions. NOSHA investigated ENTA
`and issued citations and fines for various health and safety
`violations. But, Armstrong alleges, instead of simply paying
`
`
`
`ARMSTRONG V. REYNOLDS
`
`
`
`the fines and fixing the violations, ENTA began retaliating
`against the whistleblowers.1
`
`7
`
`investigation,
`its
`Shortly after NOSHA opened
`Armstrong was removed from her role as a supervisor and
`demoted. Following the close of NOSHA’s investigation,
`Armstrong began to receive workplace write-ups and
`complaints. Before Armstrong acted as a whistleblower, no
`co-worker complaints had been filed against Armstrong in
`her twenty-three years at ENTA; fifty were filed after the
`investigation.
`
`On May 30, 2014, Armstrong lodged a complaint with
`NOSHA alleging
`illegal
`retaliation
`for her earlier
`whistleblower filing. Shortly after that, Armstrong was
`diagnosed with cancer. Worried about the loss of her health
`insurance if she lost her job and concerned about facing
`further retaliation once ENTA was informed of her new
`complaint, Armstrong discussed her options with case
`investigator Michael Ybarra and decided to withdraw her
`claim.
` Ybarra made note of
`this conversation
`in
`
`1 Our factual account follows Armstrong’s First Amended
`Complaint (FAC), which is presumed true for present purposes. Knievel
`v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005).
`
`Both parties in this case attached exhibits to their briefing on the
`motion to dismiss and referred to those exhibits in their briefs before this
`court. The district court granted Defendants’ motion to dismiss without
`addressing the material outside the pleadings or converting the motion
`into one for summary judgment under Federal Rule of Civil Procedure
`56. Our recitation of the facts in this case and our review of the district
`court’s order is therefore limited to the contents of the complaint and
`“evidence on which the complaint ‘necessarily relies’ if: (1) the
`complaint refers to the document; (2) the document is central to the
`plaintiff’s claim; and (3) no party questions the authenticity of the copy
`attached.” Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006).
`
`
`
`ARMSTRONG V. REYNOLDS
`
`8
`
`Armstrong’s file and specified that Armstrong made the
`decision to withdraw to protect herself from retaliation,
`noting that “her employer had not been notified of the
`complaint.” (Capitalization simplified.)
`
`But, on June 24, 2014, NOSHA’s Chief Investigator
`Lara Pellegrini copied ENTA on a letter to Armstrong
`acknowledging the withdrawal. Armstrong alleges that
`Pellegrini admitted to others at NOSHA that sending the
`letter copy to ENTA was a “mistake”; Pellegrini says she
`sent the letter to ENTA because she was “[f]ollowing a
`template letter from the OSHA manual.” Either way, instead
`of the quiet end to the complaint process Armstrong had
`hoped would help her keep her job and health insurance,
`NOSHA informed an allegedly retaliatory employer that its
`employee had continued to report violations of the law but
`had given up on seeking redress. After ENTA learned of the
`new complaint, Armstrong alleges, the retaliation she
`experienced increased.
`
`Armstrong met with Pellegrini on July 24, 2014,
`expecting an apology. Pellegrini instead insisted she had
`made no mistake, as she was required to send ENTA the
`letter copy. The next day, Armstrong was “physically ill and
`mentally destroyed” and so requested an additional day of
`leave on top of her previously scheduled medical leave.
`When she returned to work on Monday, July 28, 2014, she
`was berated in front of her office colleagues and patients and
`accused of violating company policy and lying about having
`been ill the prior week. The first of several disciplinary
`write-ups followed. Later that day, Armstrong was
`hospitalized and required a heart stent implant.
`
`Armstrong filed another retaliation complaint on August
`14, 2014. She was fired from ENTA on November 17.
`
`
`
`
`
`
`ARMSTRONG V. REYNOLDS
`
`9
`
`Armstrong alleges that NOSHA’s investigation of her
`last complaint was effectively shut down by the Defendants,
`acting in concert, through foot-dragging and subterfuge.
`This sequence of events began on April 1, 2015, when
`Ybarra sent ENTA a letter notifying it of Armstrong’s
`amended complaint to NOSHA, in which she alleged that her
`disciplinary write-ups and termination were retaliatory. In
`the letter, Ybarra requested that ENTA provide a statement
`responding
`to
`the allegation and any
`supporting
`documentation, including personnel records, within 10
`business days. Two days after Ybarra sent the letter,
`Pellegrini reassigned the case to herself and thereafter
`requested documents from Armstrong; Pellegrini never
`followed up on the documents previously requested from
`ENTA.
` When Armstrong objected
`to Pellegrini’s
`assignment of the case to herself, Jess Lankford, NOSHA
`Chief Administrative Officer and a defendant in this case,
`reassigned the case to a new investigator, Rick Lucas. But
`Pellegrini continued to be involved with the case after being
`replaced: she met with ENTA’s attorney and corresponded
`with ENTA about the status of the case, without copying
`Armstrong on correspondence or otherwise communicating
`with her.
`
`According to Armstrong, other NOSHA officials also
`blocked investigation of her case: Terry Reynolds, Deputy
`Director of the Nevada Division of Business and Industry,
`and Steve George, Administrator of the Division of
`Industrial Relations, ordered
`investigators not
`to
`communicate with her. Also, ENTA made a settlement offer
`but NOSHA never told Armstrong about it. And, on July 16,
`2015, Lucas was ordered by Lankford, Reynolds, and
`George to “stand down”—apparently meaning entirely
`suspend—the investigation, but Armstrong was never told
`that the investigation was not going forward. From July until
`
`
`
`ARMSTRONG V. REYNOLDS
`
`10
`
`representative
`November 2015, Armstrong and her
`continued to reach out to Lucas and Lankford but received
`no information about the status of the investigation or why it
`had stopped.
`
`On November 18, 2015, Lucas was allowed to restart the
`investigation. Lucas again requested the documents—first
`requested in April by Ybarra—that ENTA had never
`provided. He then prepared a subpoena ordering ENTA to
`provide documents supporting their decision to terminate
`Armstrong. ENTA did not meet the deadline set for
`producing the documents, but Lankford and George blocked
`Lucas’s requests to issue the subpoena for the documents. In
`the end, NOSHA never received any documentation from
`ENTA supporting their allegations about Armstrong’s
`misconduct.
`
`On December 10, 2015, ENTA’s attorney emailed
`NOSHA a copy of an indictment filed against Armstrong for
`obtaining controlled substances by fraud or forgery.
`According to the FAC, ENTA’s attorney acknowledged that
`the criminal charges—which were eventually dismissed—
`were
`irrelevant
`to
`the whistleblower
`investigation.
`Nonetheless, and despite Lucas’s protests, Reynolds and
`George directed that Armstrong’s file be closed. On
`February 4, 2016, Lucas turned the file over to Pellegrini
`without signing the final report. He then resigned in disgust.
`
`Armstrong received a letter closing her case. She alleges
`that, after that, her representative was denied access to
`relevant documents in the investigation file.
`
`The FAC alleges that Reynolds, George, Lankford,
`Pellegrini, and unnamed Nevada state officials violated her
`rights under 42 U.S.C. § 1983, the Due Process Clause, and
`the Occupational Safety and Health Act, and committed
`
`
`
`11
`
`ARMSTRONG V. REYNOLDS
`
`
`
`various state law violations. The district court granted
`Defendants’ motion to dismiss. The court (1) dismissed
`Armstrong’s procedural due process claim without prejudice
`and her substantive due process claim with prejudice,
`holding that she failed to allege a property interest in her
`continued employment because she was an at-will
`employee; (2) dismissed Armstrong’s state-law negligence
`claims, including her claim for negligent infliction of
`emotional distress, with prejudice, on the basis that the
`defendants were
`entitled
`to
`discretionary-function
`immunity; and (3) dismissed Armstrong’s state-law civil
`conspiracy claim with prejudice, holding that her claim was
`barred by the intracorporate conspiracy doctrine because it
`alleged a conspiracy between members of the same agency.2
`
`Armstrong then filed a motion for leave to file a second
`amended complaint. The motion was reviewed by a
`magistrate judge, who recommended denying it. The district
`court adopted the recommendation and dismissed the case
`with prejudice. Armstrong timely appealed.
`
`II.
`
`The Due Process Clause “forbids the governmental
`deprivation of substantive rights without constitutionally
`adequate procedure.” Shanks v. Dressel, 540 F.3d 1082,
`1090–91 (9th Cir. 2008). “A section 1983 claim based upon
`procedural due process . . . has three elements: (1) a liberty
`or property interest protected by the Constitution; (2) a
`deprivation of the interest by the government; (3) lack of
`
`
`2 The district court also dismissed the remainder of Armstrong’s
`claims, which are not at issue in this appeal.
`
`
`
`ARMSTRONG V. REYNOLDS
`
`12
`
`process.” Portman v. County of Santa Clara, 995 F.2d 898,
`904 (9th Cir. 1993).
`
`The district court addressed only the first element of
`Armstrong’s procedural due process claim, holding that
`“given her concession that she was an at-will employee,”
`Armstrong “cannot state a valid cause of action for violation
`of procedural due process because she has not alleged a
`constitutionally protected liberty or property interest.”
`Armstrong contends that Nevada law has created limited
`exceptions to at-will employment and protections for
`whistleblowers that can support a property interest. We
`agree.
`
`A.
`
`“The Fourteenth Amendment’s procedural protection of
`property is a safeguard of the security of interests that a
`person has already acquired in specific benefits. These
`interests—property interests—may take many forms.” Bd.
`of Regents of State Colleges v. Roth, 408 U.S. 564, 576
`(1972). Key to a property interest determination is whether
`the person alleging a due process violation has an
`entitlement to the benefit at issue, conferred through statute,
`regulation, contract, or established practice. Property
`interests “are not created by the Constitution. Rather they
`are created and their dimensions are defined by existing rules
`or understandings that stem from an independent source such
`as state law—rules or understandings that secure certain
`benefits and that support claims of entitlement to those
`benefits.” Id. at 577.
`
`Transposing these general precepts to the current
`context, our question is whether an employee of a private
`entity can acquire a limited property interest in continued
`employment, protected against government interference
`
`
`
`ARMSTRONG V. REYNOLDS
`
`
`
`without due process, through the enactment of state laws
`restricting the circumstances in which an otherwise at-will
`employee may be disciplined or discharged. Our case law
`establishes that, in appropriate circumstances, she can.
`
`13
`
`Merritt v. Mackey, 827 F.2d 1368 (9th Cir. 1987),
`addressed a procedural due process property-based claim of
`that ilk. In Merritt, a counselor working at a private
`nonprofit corporation alleged that federal and state officials
`forced his termination without a hearing by requiring that he
`be fired as a condition of government funding for the
`nonprofit. Id. at 1370. Merritt held “[i]t . . . indisputable
`that an individual may have a protected property interest in
`private employment.” Id. But to bring such a claim, the
`plaintiff “must show that [she] had more than a ‘unilateral
`expectation’ of continued employment;
`[she] must
`demonstrate a ‘legitimate claim of entitlement.’” Id. at 1371
`(quoting Roth, 408 U.S. at 577).
`
`the “legitimate claim of entitlement”
`Elucidating
`concept in the context of private employment, we have held
`that “[i]f under state law, employment is at-will, then the
`claimant has no property interest in the job.” Portman,
`995 F.2d at 904. In other words, if an employee can be fired
`for any reason at any time, she has at most only a unilateral
`expectation of continued employment. But—critically, for
`present purposes—state laws can limit at-will employment,
`even for employees who do not have employment contracts
`assuring
`continued
`employment
`or
`limiting
`the
`circumstances
`in which
`they can be disciplined or
`discharged. See Merritt, 827 F.3d at 1371. And “when a
`private employee is deprived of his employment through
`government conduct, the cause of action available to the
`employee is not merely the right to sue for interference with
`
`
`
`ARMSTRONG V. REYNOLDS
`
`14
`
`contractual relationships”; the employee can bring a due
`process claim against the government. Id.
`
`Armstrong contends that Nevada’s protection against
`discharge or discipline for safety and health whistleblowers
`creates, even for otherwise at-will employees, a “legitimate
`claim of entitlement” in retaining a job without being fired
`for a prohibited reason. It does.
`
`Nevada has created exceptions to at-will employment
`that apply to all employees in the state. Relevant here is
`Nevada’s protection of employees from being fired for
`whistleblowing about health and safety issues: “A person
`shall not discharge or in any manner discriminate against any
`employee because the employee has filed any complaint or
`instituted or caused to be instituted any proceeding” under
`the state’s Occupational Safety and Health chapter. Nev.
`Rev. Stat. § 618.445(1). Nevada also recognizes a common
`law tort cause of action for discharge against an employer
`who “terminat[es] an employee for reasons that violate
`public policy,” including termination for whistleblowing.
`Allum v. Valley Bank of Nev., 114 Nev. 1313, 1316–17, 1320
`(1998). An employee’s status as an otherwise at-will
`employee does not affect either the statutory or the common
`law protection. Id. at 1317; see Nev. Rev. Stat. Ann.
`§ 618.445. So although—absent a contract to the contrary—
`employers in Nevada are free to fire employees for almost
`any reason at any time, they may not discharge an employee
`for reporting workplace hazards
`to
`the appropriate
`authorities.
`
`This protection, albeit limited, creates a legitimate
`entitlement
`to protection from negative employment
`consequences for making OSHA complaints, and so a
`property interest. In general, “[a] law establishes a property
`interest in employment if it restricts the grounds on which an
`
`
`
`15
`
`ARMSTRONG V. REYNOLDS
`
`
`
`employee may be discharged.” Hayward v. Henderson,
`623 F.2d 596, 597 (9th Cir. 1980) (quoting Maloney v.
`Sheehan, 453 F. Supp. 1131, 1141 (D. Conn. 1978)).
`Hayward pointed to a provision permitting discharge only
`for “just cause” as an “example,” of a protection creating “a
`right to continued employment.” Id. (quoting Maloney,
`453 F. Supp. at 1141). By specifying a “just cause”
`provision as an “example” of a broader category of job
`protections giving rise to a property interest in continued
`employment, Hayward indicated that laws more narrowly
`creating restrictions on discharge could create a property
`right in employment free from a discharge violating that
`restriction.
`
`DiMartini v. Ferrin, 906 F.2d 465 (9th Cir. 1990),
`amending 889 F.2d 922 (9th Cir. 1989), reiterated that
`suggestion, specifically noting that Nevada’s public policy
`exceptions to at-will employment may create a limited
`property interest. DiMartini concerned a Bivens action
`against an FBI agent who allegedly instigated DiMartini’s
`discharge from private employment because DiMartini
`refused to cooperate with an FBI investigation. See 889 F.2d
`at 923. Addressing qualified immunity, DiMartini held that
`it was clearly established law that an employee has a “right
`to be free from unreasonable government interference with
`his private employment” but remanded to the district court
`the question whether DiMartini had adequately alleged a
`property right to support his due process claim. 906 F.2d
`at 466–67. In a footnote, DiMartini explained that “[t]his
`court has held that state law can create a constitutionally
`significant property interest in private employment,” and
`noted that:
`
`. . . recognizes that an at-will
`“Nevada
`employee has at least a limited right to
`
`
`
`16
`
`
`ARMSTRONG V. REYNOLDS
`
`continued employment because he cannot be
`terminated when
`the purpose of
`the
`termination offends public policy.” See
`Hansen v. Harrah’s, 100 Nev. 60, 675 P.2d
`394 (1984) (Nevada adopts a public policy
`exception to at-will employment rule and
`recognizes a
`tort action for retaliatory
`discharge resulting from employee filing of
`worker’s compensation claim).
`
`Id. at 467 n.4. Although, as Defendants correctly note,
`DiMartini did not squarely determine “whether [a property]
`interest existed in that case,” the DiMartini footnote does
`follow the reasoning of Merritt and Hayward in indicating
`that when the state restricts, broadly or narrowly, the
`grounds upon which an employee can be discharged, the
`state may establish a property interest in continuing
`employment without being discharged for an impermissible
`reason. (Emphasis added.)
`
`Squarely addressing the question Merritt, Hayward, and
`DiMartini left (barely) open, we now hold that Nevada’s
`statutory and common law protections for whistleblowers
`create a limited property interest for plaintiffs who plausibly
`allege that they have been illegally terminated for health and
`safety whistleblowing. Nevada law gives employees more
`than a unilateral expectation that they will be able to keep
`working without a retaliatory discharge. Nevada’s OSHA
`statutes and case law prohibit employers from firing
`employees for properly reporting OSHA violations or
`otherwise exercising their NOSHA statutory rights. Nev.
`Rev. Stat. § 618.445(1); Allum, 114 Nev. at 1316–17. All
`Nevada employees who avail themselves of those rights are
`provided a legitimate entitlement, established by the state,
`
`
`
`ARMSTRONG V. REYNOLDS
`
`
`
`not to be fired for those actions, and so have a property right
`in continuing employment if they do exercise those rights.
`
`17
`
`This property interest is narrower than the interest held
`by an employee with a contract assuring continued
`employment for a specified time period or establishing that
`discharge must be for cause. But limited property interests
`in employment are not new. Federal Deposit Insurance
`Corp. v. Henderson, 940 F.2d 465 (9th Cir. 1991), for
`example, determined that an employment contract that
`provided for at-will termination with a ninety-day notice
`requirement, or for-cause termination with no notice, created
`a property interest “limited to ninety days of employment.”
`Id. at 470 n.8, 476. The limited nature of the interest may,
`of course, affect the calculation of damages. And any
`plaintiff claiming such a property interest must plausibly
`allege the other elements of any procedural due process
`claim: a deprivation of that interest by the government and a
`lack of process. Portman, 995 F.2d at 904. But the restricted
`nature of a governmental or contracted limitation on
`employee discipline or discharge does not destroy the
`prospect of any property interest in continued employment.
`
`B.
`
`Defendants acknowledge that the state offers protections
`to whistleblowers that extend to otherwise at-will employees
`but maintain that Armstrong was not entitled to those
`protections. Armstrong, Defendants argue, has not made a
`plausible showing that she was fired because she complained
`about health and safety violations, as “Armstrong had
`numerous workplace problems.” Defendants’ argument
`fails.
`
`Under Nevada law, a plaintiff alleging tortious discharge
`for whistleblowing “must demonstrate that his protected
`
`
`
`ARMSTRONG V. REYNOLDS
`
`18
`
`conduct was the proximate cause of his discharge,” rather
`than establishing mixed motives for the discharge (which
`suffices for some purposes under Title VII of the Civil
`Rights Act of 1964, 42 U.S.C. § 2000e et seq., and other
`statutes). Allum, 114 Nev. at 1319–20; 42 U.S.C. § 2000e-
`2(m). But Armstrong is not relying on a mixed motives
`theory.
`
`to
`forward
`the Defendants bring
`records
`The
`demonstrate that ENTA had cause to fire Armstrong, are the
`very write-ups Armstrong alleges were pretextual and so part
`of the retaliation for whistleblowing she experienced. She
`alleges that these write-ups were generated to create the
`appearance that there was cause to fire her when there was
`not, pointing to the fact that she had not previously received
`any write-ups in twenty-three years of employment and that
`the first write-up was based on an alleged incident nine days
`after NOSHA concluded its initial health and safety
`investigation. On a motion to dismiss, taking Armstrong’s
`factual allegations in her complaint as true, the presence of
`allegedly pretextual reasons for firing do not defeat the
`plausibility of Armstrong’s allegation that her termination
`was retaliatory.
`
`C.
`
`Our conclusion that Armstrong had a property interest in
`continued employment without discipline or discharge for
`properly exercising her rights as a whistleblower does not
`end our analysis. Defendants also contend that we should
`affirm the district court’s dismissal of Armstrong’s claim
`because she has not satisfied the second element of a § 1983
`procedural due process claim, “a deprivation of the interest
`by the government.” Portman, 995 F.2d at 904. Defendants
`assert that even if Armstrong can show that “ENTA
`retaliated against her, thereby creating a legitimate claim to
`
`
`
`ARMSTRONG V. REYNOLDS
`
`
`
`continued employment,” she has not plausibly alleged that
`their conduct caused the deprivation of that interest. On this
`point, we agree with Defendants.
`
`19
`
`The cases that established that government interference
`in private employment could give rise to a procedural due
`process claim all involved deliberate efforts by government
`actors to cause the plaintiffs to be fired. In Merritt, the
`government officials conditioned funding for the private
`employer on its firing of the plaintiff. 827 F.2d at 1370. In
`DiMartini, DiMartini alleged that the government official
`subjected his employer
`to “threats, harassment and
`intimidation” to cause DiMartini’s firing. 889 F.2d at 926.
`But these cases do not set forth a general standard for when
`government interference in private employment rises to the
`level of a due process violation.
`
`Defendants propose a test derived from state action
`doctrine. They contend that Armstrong must show “conduct
`of state actors exercising ‘coercive power’ or ‘such
`significant encouragement, either overt or covert, that the
`choice [to fire Armstrong] must in law be deemed to be that
`of the state.’” See Am. Mfrs. Mut. Ins. Co. v. Sullivan,
`526 U.S. 40, 52 (1999). Armstrong disagrees, contending
`that we should apply this court’s precedents establishing
`liability under § 1983, in which the “requisite causal
`connection can be established not only by some kind of
`direct personal participation in the deprivation, but also by
`setting in motion a series of acts by others which the actor
`knows or reasonably should know would cause others to
`inflict the constitutional injury.” Gilbrook v. City of
`Westminster, 177 F.3d 839, 854 (9th Cir. 1999) (quoting
`Johnson v. Duffy, 588 F.2d 740, 743–44 (9th Cir. 1978)).
`
`We agree with Armstrong that the Johnson framework
`applies here. Unlike the plaintiffs in Sullivan, who brought
`
`
`
`ARMSTRONG V. REYNOLDS
`
`20
`
` a
`
` § 1983 claim against private insurers, 526 U.S. at 47–48,
`Armstrong brought her claim directly against the state
`defendants. Defendants give no basis for applying cases
`determining whether private action could be attributed to the
`state wh
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
