In April 2022, Debbi Potts was hired by Gaia Children, LLC, doing business as The Learning Experience, to work as a compliance specialist at its child care facility in Larimer County, Colorado. As part of her job, Potts was a mandatory reporter of child abuse. In May 2022, she raised concerns with the facility’s owner, Sara Brownell, and the director, Jennifer Wright, about unsafe practices involving children. Potts reported that staff members were not CPR-certified, training records were falsified, and that on one occasion, she witnessed a child stop breathing while staff failed to call emergency services.
After her concerns were not addressed, Potts reported the facility to the Colorado Department of Licensing and Larimer County Child Protection Services on June 24, 2022. Investigators interviewed Potts at the center the following week. Afterward, Wright asked her about the content of the interview. When Potts declined to disclose details, Wright instructed her to go home early. The next morning, Wright sent Potts a text message stating, “We won’t need you to come in today. Enjoy a nice long holiday weekend.” Potts interpreted this message to mean she was terminated.
Potts retrieved her final paycheck and returned company property. No one at the center questioned her departure or indicated she should return. Days later, Wright emailed staff that Potts was “no longer a part of the Learning Experience team” and instructed employees not to communicate with her. The owner also told staff they were “in trouble” because Potts had reported them to the state.
Potts filed a claim for wrongful discharge in violation of public policy, arguing that she was terminated for reporting unsafe child care practices. Gaia Children, LLC, moved to dismiss the complaint under Colorado Rule of Civil Procedure 12(b)(5), arguing that Potts failed to allege an actual termination or constructive discharge. The district court agreed, finding that Potts’s interpretation of Wright’s text message was speculative and that her return of company property could also indicate resignation. It ruled that Potts had not alleged sufficient facts to support either form of discharge.
The Colorado Court of Appeals reviewed the dismissal de novo. It noted that Colorado had not previously adopted a standard for determining actual discharge and therefore applied a widely accepted federal test. The court defined actual discharge as occurring when an employer’s language or conduct “would logically lead a prudent person to believe their tenure has been terminated.” The analysis focused on whether a reasonable employee, viewing the circumstances objectively, would believe they had been fired.
The appellate court held that Potts’s allegations, viewed in the light most favorable to her, were sufficient to plausibly support a finding of actual discharge. It emphasized that she had been sent home in the middle of an investigation into her employer, was told not to return for the remainder of the week, and that management later confirmed to staff that she was no longer employed. The court determined that these facts, taken together, could lead a reasonable person to believe their employment had ended.
The appellate court agreed with the district court that Potts had not sufficiently alleged constructive discharge. It explained that constructive discharge occurs when working conditions become so intolerable that a reasonable employee has no choice but to resign. Potts’s allegations—that she was sent home and told to stay home—did not demonstrate the kind of coercive or egregious conditions necessary to support this claim.
On May 23, 2024, the Colorado Court of Appeals affirmed in part and reversed in part. It reinstated Potts’s wrongful discharge claim to the extent it relied on an actual discharge theory and remanded the case for further proceedings. The court upheld the dismissal of the constructive discharge theory and denied Gaia’s request for attorney fees.
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