Just (Cause) Around The Corner?
Strange New Challenges to At-Will Status
Presented by:
The Employment At-Will and Collateral Torts Subcommittee
Panelists and Contributors:
Jeffrey A. Calabrese, Stoll Keenon Ogden PLLC, Louisville, Kentucky
Mike Cerbo, Colorado AFL-CIO, Denver, Colorado
Paul H. Tobias, Tobias, Kraus & Torchia, Cincinnati, Ohio
Moderator and Contributor:
Eric A. Tate, Morrison & Foerster LLP, San Francisco, California
Co-contributors:
Daniel J. Aguilar & Timothy L. Reed, Morrison & Foerster LLP, San Francisco, California
James S. Barber & Michelle K. Garcia, Clausen Miller P.C., Chicago, Illinois
David J. Carr & Emmanuel V.R. Boulukos, Ice Miller LLP, Indianapolis, Indiana
Robert S. Gilmore, Kohrman Jackson & Krantz P.L.L, Cleveland, Ohio
Joseph A. Golden & Cristy Drucker, Pitt, McGehee, Palmer, Rivers & Golden PC, Royal Oak, Michigan
Professor Stephen A. Mazurak & Christopher Kenrick (Research Assistant, Class of 2009),
University of Detroit Mercy School of Law, Detroit, Michigan
Elizabeth S. Muyskens, Stoll Keenon Ogden PLLC, Louisville, Kentucky
George L. Washington, Jr., Equant Inc., Oak Hill, Virginia
Presented For:
ERR Committee of the ABA Labor and Employment Law Section
Midwinter Meeting
Key West, Florida
March 2009
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INTRODUCTION
The recent Colorado Just Cause Initiative, although ultimately not successful, is a reminder that
challenges and exceptions to the generally uniform standard of at-will employment do exist and that
efforts to expand such exceptions may continue. As background for its panel presentation, “Just Cause
Around The Corner? Strange New Challenges to At-Will Status, the At-Will and Collateral Torts
Subcommittee presents the following summary of recent developments in the area of at-will employment
and exceptions thereto across the United States. The focus of the paper is on state law developments, but
includes limited references to federal case law developments as appropriate. In addition, the paper
generally includes cases from 2005 to the present, with limited references to earlier cases as appropriate,
e.g., seminal cases in the jurisdiction.
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First Circuit
MAINE
Janicki v. John Babst Mem’l High Sch., 2002 Me. Super. LEXIS 125 (2002) – A potential
claim for wrongful discharge exists where a “strong public policy” is implicated.
Overview. Plaintiff executed a contract whereby he would work as a high school’s soccer coach,
a position held by Plaintiff during the previous two years. Approximately one month after the
contract’s execution, the high school’s principal was sent a letter in which concern was
expressed over sexual comments made by Plaintiff to members of the high school’s soccer team.
Plaintiff acknowledged that he did, in fact, make one of the comments he was alleged to have
made. Eventually, Plaintiff, who indicated that he might take legal action in response to the
accusations, met with the high school’s board of trustees. The board of trustees recommended
that Plaintiff’s employment be terminated, and the high school’s principal implement its
recommendation. Plaintiff brought a wrongful discharge claim in the trial court against the high
school, its principal, and its board of directors (collectively “Defendants”). Defendants moved
for summary judgment.
Held. The trial court granted Defendants’ motion for summary judgment. The court reasoned
that Maine has yet to recognize a common law cause of action for wrongful discharge, citing the
Maine Supreme Court’s decision in Larabee v. Penobscot Frozen Foods, Inc., 486 A.2d 97 (Me.
1984). In Larabee, with respect to the establishment of a wrongful discharge claim, the court
noted “We do not rule out the possible recognition of such a cause of action when the discharge
of an employee contravenes some strong public policy.” The court reasoned the dispute between
Plaintiff and Defendants was “purely private.” Moreover, the court reasoned that “even if in
some circumstances an employment action in response to an employee’s threat of legal action
can be seen to violate a strong and clearly defined public policy interest, it does not arguably do
so here.” Therefore, the court held that “if in Maine there exists a tort of wrongful discharge,
such a claim would not be availing to [Plaintiff] here.”
Smith v. Heritage Salmon, Inc., 180 F. Supp. 2d 208 (D. Me. 2002) – There is no wrongful
discharge claim for an employee who refuses to obey a workplace instruction believed to be
illegal.
Overview. Mr. and Mrs. Smith (collectively “Plaintiffs”), a married couple, worked for
Defendant at one of its fish hatcheries. Mr. Smith worked as the hatchery’s manager and
Mrs. Smith was a hatchery technician. On several occasions during Plaintiff’s tenure, Mr. Smith
reported to Defendant that the toxic materials released by the hatchery exceeded levels permitted
by the Maine Department of Environmental Protection (“DEP”) and the United States
Environmental Protection Agency (“EPA”). According to Plaintiffs, Defendant instructed them
to perform acts that they believed would have violated EPA and DEP regulations, including
altering water samples to make them appear to be cleaner than they actually were; Plaintiffs
refused to engage in these activities. Eventually, Plaintiffs were terminated. Defendant based
Mr. Smith’s termination on an earlier incident in which he undercounted the hatchery’s fish
population, resulting in an unwanted surplus. Mrs. Smith’s termination resulted from her hours
being consistently inflated. Plaintiffs brought several claims against Defendant in the trial court,
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First Circuit
including a claim for violation of the Maine Whistleblower Protection Act (“MWPA”) and a
claim for wrongful discharge. Defendant moved for summary judgment on all claims.
Held. With respect to Plaintiff’s wrongful discharge claim, the court granted summary judgment
for Defendant. The court noted that “Maine courts consistently have held that an at-will
employee cannot pursue such an action . . . Indeed, generally Maine does not recognize the tort
of wrongful discharge at all.” However, the court also noted that the Maine Supreme Court has
“acknowledged the possibility of a narrow exception to the rule” under circumstances in which
denying at-will employees a wrongful termination claim “would contravene public policy.”
Although the court held that denying Plaintiffs the ability to recover for wrongful discharge
would contravene the MWPA, the court also held that “it would . . . be . . . redundant if the
[c]ourt were to recognize the wrongful discharge claim Plaintiffs assert because the Act governs
Plaintiffs’ predicament in its silence.” The court reasoned that the Maine Legislature had the
opportunity to allow a wrongful discharge claim under the MWPA, but refused to do so.
Consequently, the court would be acting “in lieu of the Legislature” if it allowed Plaintiffs to
pursue a wrongful discharge claim. Therefore, in Maine, “[t]here is no cause of action . . . for
the wrongful discharge of an employee fired merely for refusing to obey a workplace instruction
because he believes the instruction to be illegal.”
MASSACHUSETTS
Day v. Staples Inc., 2009 WL 294804 (C.A.1 (Mass.) 2009) – The Sarbanes-Oxley Act’s
whistleblower protection provisions cannot support a claim for wrongful termination in
violation of public policy.
Overview. Plaintiff worked for Defendant as an entry-level analyst in Defendant’s Reverse
Logistics Department. Shortly after he began working for Defendant, Plaintiff came to believe
that certain practices within the Reverse Logistics Department were potentially unlawful and
unethical. Specifically, Plaintiff claimed that the Reverse Logistics Department improperly
handled customer returns by (1) issuing credits to customers without receiving proper
documentation; (2) withholding money from contract customers by under-issuing credits over
$25.00; and (3) cancelling and reissuing pick-up orders, which could permit couriers to overbill
Defendant. Plaintiff conveyed his concerns regarding these practices to several supervisors in a
series of face-to-face meetings and e-mail exchanges. Defendant eventually conducted an
investigation and concluded that it was not engaging in fraudulent or unethical behavior.
Plaintiff, however, was unsatisfied with Defendant’s explanation and further pursued the matter.
Eventually, Defendant terminated Plaintiff’s employment, purportedly for his inability to
perform his job. Subsequently, Plaintiff filed a complaint in the United States District Court for
the District of Massachusetts, asserting a claim for retaliatory termination in violation of the
Sarbanes-Oxley Act’s (“SOX”) whistleblower protection provision, as well as a claim for
wrongful termination in violation of public policy. Defendant’s motion for summary judgment
was granted with respect to all claims, and Plaintiff appealed to the First Circuit Court of
Appeals.
Held. The court affirmed the trial court’s grant of summary judgment with regard to Plaintiff’s
wrongful termination in violation of public policy claim. The court noted that Massachusetts
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First Circuit
recognizes a narrowly-construed exception to the at-will employment rule in situations where
“employment is terminated contrary to a well-defined public policy.” Moreover, the court noted
that under the public policy exception, an employee may seek legal redress if he or she is
terminated (1) for asserting a legally-guaranteed right; (2) for doing what the law requires; or
(3) for refusing to do that which the law forbids. The court reasoned that “[i]n passing SOX,
Congress aimed to create comprehensive legislation to fill the gaps in a patchwork of state laws
governing corporate fraud and protections for whistleblowers . . . [and] it would be entirely
inappropriate for [Plaintiff] to be able to use a federal statute designed to address the
inadequacies of state law to create a new common law cause of action under Massachusetts law.”
The court further reasoned that “an employee’s internal complaint about company policies” is
not protected by the public policy exception.
Parker v. Town of N. Brookfield, 861 N.E.2d 770 (Mass. 2007) – A municipal employer that
terminates employment based on financial considerations does not violate public policy.
Overview. Plaintiff worked for Defendant, a municipal government, as a “dog officer/animal
control officer.” Plaintiff, who previously received health insurance coverage from another
municipality that simultaneously employed her, sought insurance benefits from Defendant under
a statute granting such benefits. Due to the high cost of insurance, Defendant decided to end
Plaintiff’s employment at the conclusion of the fiscal year and transfer the functions of her
position to the police department. Subsequently, Plaintiff brought several claims in the trial
court, including a claim for wrongful termination in violation of public policy. Defendant moved
for summary judgment, which was granted by the trial court. Plaintiff then appealed to the
Appeals Court of Massachusetts.
Held. The court affirmed the trial court’s grant of summary judgment for Defendant. The court
noted that although, generally, at-will employment “may be terminated by either side at any time
and without reason,” “[i]n exceptional cases, for reasons of public policy, an at-will employee
may maintain a cause of action and find redress where the termination results from the
employee’s assertion of some legally guaranteed right, or refusal to engage in illegal or harmful
conduct.” The court reasoned that Defendant’s “interest, and thus that of the taxpayer, in
controlling its operations and finances, and in running the town business, permitted” the
consideration of the financial impact of providing Plaintiff with insurance in making the decision
to terminate her employment and transfer her duties to the police department. Moreover, the
court looked to the private sector, where “financial considerations can provide good cause to
terminate an at-will employee.” Therefore, the court “could see no reason to deny the town the
same discretion in fiscal matters as exists in the private sector.”
NEW HAMPSHIRE
Gatsas v. Manchester Sch. Dist., 2006 U.S. Dist. LEXIS 81890 (D.N.H. 2006) – A plaintiff
may not bring a common law wrongful discharge claim where a statutory claim is available
based on the same facts.
Overview. Plaintiff, a teacher, worked for Defendant, a school district. Defendant posted a job
vacancy announcement seeking an interim assistant principal for the school at which Plaintiff
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taught. Six people, three men and three women, applied for the position. Four of the candidates
for the vacant position, including Plaintiff, already worked at the school. Eventually, a male
candidate, who worked as a guidance counselor at the school, was appointed to the position.
Sometime thereafter, Plaintiff’s teaching assistant had a conversation with the school’s assistant
principal. During that conversation, Plaintiff’s teaching assistant said something to the effect
that the school’s principal “would never have hired somebody like [Plaintiff] because she’s a
strong . . . woman.” After making her displeasure evident in several ways, including filing
charges with the New Hampshire Commission for Civil Rights and the federal Equal
Employment Opportunity Commission, Plaintiff was given less desirable teaching assignments
and experienced “rude and hostile” behavior on the part of the school’s administration. Plaintiff
subsequently brought several claims against Defendant in the trial court, including claims for
gender discrimination and retaliation under Title VII, as well as a claim for wrongful discharge.
Defendant moved for summary judgment on all claims.
Held. The court granted Defendant’s motion for summary judgment. The court held that
Plaintiff was “barred from bringing a common law wrongful discharge claim because a statutory
cause of action [was] available to her, based on the same facts.” The court reasoned that “Title
VII not only codifies the public policy against gender-based discrimination but also creates a
private right of action to remedy violations of that policy.”
RHODE ISLAND
Pacheco v. Raytheon Co., 623 A.2d 464 (R.I. 1993) – No wrongful discharge cause of action
in Rhode Island; Rhode Island does not specifically recognize exceptions to the at-will
doctrine.
Overview. The Plaintiff, Pacheco, claimed that he was wrongfully discharged by Defendant,
Raytheon. The court declined to recognize the tort of whistle blowing and granted Defendant’s
motion to dismiss on the grounds that Plaintiff's employment was subject to termination at will.
Held. On appeal, the Supreme Court of Rhode Island affirmed. The Supreme Court specifically
noted that “[i]t is not the role of the courts to create rights for persons whom the Legislature has
not chosen to protect … we now unequivocally state that in Rhode Island there is no cause of
action for wrongful discharge.”
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Second Circuit
CONNECTICUT
Petitte v. DSL.net, Inc., 102 Conn. App. 363 (Conn. Ct. App. 2007) – At-will applies to offers
of employment before actually commencing employment.
Overview. Kevin Petitte was called by Ray Allieri, the senior vice president for sales and
marketing of DSL.net, Inc., with an employment offer in a sales position. Allieri stated that the
company would send Petitte an offer of employment letter and told him that his start date would
be December 15, 2003. Petitte resigned his employment with another company. He signed
DSL.net’s letter, which provided that the offer was contingent on his understanding that it was
not a guarantee of employment for any specified length of time by either party and that the
employment would be “at-will.” After returning the letter, Petitte was asked for a list of
employment references. Based on information received from the references, the employment
offer was rescinded. Petitte attempted to return to his former employment but was unsuccessful.
Consequently, Petitte filed suit against DSL.net, alleging breach of contract, negligent
misrepresentation and infliction of emotional distress. The lower court granted the employer’s
motion for judgment prior to trial.
Held. In a ruling of first impression, the Connecticut Appellate Court ruled that the employment
at-will doctrine applied to offers of employment. Indeed, the court determined it would be
illogical to draw a distinction between an offer of employment and the actual act of employment
when the employment relationship is at-will. The employment at-will doctrine, the court
reasoned, applied to all aspects of the employment relationship and is not dependent on the
prospective employee actually commencing employment. The offer letter in this case explicitly
provided that the letter was not a guarantee of employment and that the employment would be
“at-will,” and Petitte admitted during his deposition that “he understood what he was getting
into.” Thus, the court determined that Petitte’s reliance on the letter as a guarantee of
employment was not justifiable.
Commentary. Employers are advised to take appropriate measures to avoid a similar lawsuit.
Employers, for example, should clearly and expressly identify an at-will relationship in an offer
letter and state that the letter is not a guarantee of employment for any specified length of time.
Employers may also want to consider revising offer letters to include a note indicating that the
offer is contingent upon background checks and/or reference reviews. This will provide
employers an additional argument should the offer need to be withdrawn.
Matzkin v. Delaney, 2005 Conn. Super. LEXIS 1942 (July 29, 2005) – Connecticut’s Rules of
Professional Conduct constitute an important public policy of sufficient clarity or
consequence to justify a claim for wrongful discharge as an exception to employment atwill.
Overview. Bruce Matzkin was employed as an associate at the law firm of Delaney, Zemetis,
Donahue, Durham & Noonan, P.C. (“law firm”). Matzkin was representing one of the law firm’s
clients at a trial when he learned that his opposing counsel had telephoned two witnesses and told
them that they did not have to testify in court, even though they had been subpoenaed. In the
belief that the other lawyer’s actions constituted witness tampering, Matzkin informed several
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Second Circuit
partners at his law firm that he intended to report the incident to Connecticut’s Statewide
Grievance Committee. When the partners expressly forbade Matzkin from filing a grievance
under the law firm’s name, Matzkin informed them that he would file a grievance independently.
The law firm fired Matzkin shortly after. In turn, Matzkin sued for wrongful discharge asserting
that the law terminated his employment to prevent him from filing the grievance. The law firm
filed a motion to strike his claim on grounds that (1) Connecticut’s Rules of Professional
Conduct do not constitute an important public policy that would create an exception to the law
firm’s right to terminate an at-will employee, and (2) Matzkin had yet to file a grievance.
Held. In an unpublished opinion, the court noted that Connecticut recognized an exception to the
employment at-will doctrine where the reason for the discharge involved impropriety derived
from some important violation of public policy. Then, after analyzing their purpose and intent,
the court held that Connecticut’s Rules of Professional Conduct embody a public policy of
sufficient clarity or consequence to justify a claim for wrongful discharge against a lawyer’s
employer. “Because the legal profession is self regulated and relies upon its members to police
itself,” the court reasoned, “no lawyer’s employment should be conditioned upon turning a blind
eye to violations of the rules, which are applicable to all lawyers. To allow this would
compromise the autonomy of the profession.” Thus, the court found that Matzkin had
sufficiently alleged an important public policy. Finally, addressing the fact that Matzkin had not
yet filed a grievance, the court held a plaintiff need not take action to vindicate the important
public policy. The court reached this conclusion by discussing Connecticut’s leading case on
public policy exceptions to the at-will doctrine, Sheets v. Teddy’s Frosted Foods, [citation] in
which there was no indication that the plaintiff ever reported his employer to the authorities.
Wood v. Sempra Energy Trading Corp., 2005 U.S. Dist. LEXIS 2848 (D. Conn. 2005) – An
employee cannot support a breach of contract claim relying on an employee handbook
where the employer includes express language disclaiming formation of a contract.
Overview. Susan E. Wood began working as an Assistant Vice President for Sempra Energy
Trading Corporation (“Sempra”) in September 2000. Following the commencement of her
employment, Wood signed an Application for Employment, which stated that anything received
by her or expressed to her was not intended to create an employment contract, and an
Employment Agreement, which provided that Sempra could “terminate [Wood’s] employment
at-will, whether or not for cause.” Beginning with an incident in June 2001, Wood was involved
in a few workplace disputes involving race, gender and sexual matters. Wood was terminated in
March 2002. Wood sued Sempra asserting 14 state and federal law claims, including one for
breach of contract and another for breach of implied contract. Wood’s action was based, in part,
on her claim that certain representations were made to her regarding job security and her term of
employment, including an assurance that her employment would not be terminated so long as her
employment remained profitable to Sempra.
Held. Ruling on a motion for summary judgment, the court held Wood could not support a claim
of breach of contract relying on the employee handbook since it included express language
disclaiming formation of a contract. Citing the Connecticut Supreme Court, the district court
acknowledged that “under appropriate circumstances, [representations in a personnel manual]
may give rise to an express or implied contract.” Here, however, the court highlighted the
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Second Circuit
express language in the Employee Handbook that disclaimed formation of a contract. According
to the court, employers could “include appropriate disclaimers of the intention to contract . . . [to]
protect themselves against employee contract claims based on statements made in personnel
manuals.” On Wood’s claim for breach of implied of contract, the court once again
acknowledged that an “implicit contract requiring that termination be for cause only can exist
even where an explicit letter contract exists.” In the Connecticut Supreme Court’s case,
however, the letter contract at issue made no reference to the company’s ability to terminate the
former employee and the court found that an implicit contract existed because the parties had not
entered into an express contract. Here, the district court reasoned that Wood could not sustain a
claim under a theory of implied contract on the principle that parties who have entered into
controlling express contracts are bound by such contracts to the exclusion of inconsistent implied
contract obligations.
Espinal v. Child & Family Agency of Se. Conn., 2005 Conn. Super. LEXIS 651 (2005) –
Ambiguity in terms used in a personnel manual and an employment agreement will raise a
genuine issue of material fact as to whether the parties intended to create an employment
at-will relationship or one under an express written contract for a determined term.
Overview. Romis Espinal was terminated by the defendant, Child & Family Agency of
Southeastern Connecticut, Inc. (“the Agency”), from her position as a teacher, for allegedly
committing workplace violence and threats. In turn, Espinal filed a lawsuit against the Agency
claiming she was wrongfully terminated without notice or just cause as required under the
Agency’s Policy and Procedures Manual and the Personnel Practices Manual. According to
Espinal, it was her understanding that she was an employee under an express written contract for
a determined term based on language in an employment agreement executed by the parties. The
caption of that document stated in capital letters “Employment Agreement” and used the
language “annual agreement” to describe the contract duration.
Held. In an unpublished opinion, the court denied the employer’s summary judgment motion
and concluded that a genuine issue of fact existed as to whether the parties intended to create an
employment at-will relationship when they executed the employment agreement. According to
the court, the fact that the caption of the document stated in capital letters “Employment
Agreement” added weight to the contention that the parties intended an express written contract
for employment. This conclusion was also supported by the use of the words “annual
agreement” to describe the contract duration and its definition as “continuing for the period of a
year.” However, the language in the agency’s manual was contradictory to the language
referenced in the employment agreement. The terms of the manual, incorporated into the
employment agreement, disclaimed any reference to contractual employment and created an
employment at-will relationship between the parties. Consequently, the court concluded that the
language of the parties’ employment agreement was ambiguous.
Sheets v. Teddy’s Frosted Foods, Inc., 179 Conn. 471 (1980) – An exception to at-will
employment exists where discharge is derived from some important violation of public
policy.
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Second Circuit
Overview. For four years, Emard H. Sheets, an at-will employee, worked as a quality control
director and operations manager for Teddy’s Frosted Foods Inc. (“Teddy’s”), a producer of
frozen food products. In the course of his employment, Sheets received periodic raises and
bonuses. In his capacity as quality control director and operations manager, Sheets began to
notice deviations from the specifications contained in Teddy’s standards and labels, in that some
vegetables were substandard and some meat components underweight. These deviations meant
that the Teddy’s products violated the express representations contained in its labeling, which
violated the requirements of a state statute. Sheets communicated in writing to the employer
regarding the deviations. A few months later, Sheets was terminated. Although the stated reason
for his discharge was unsatisfactory performance, Sheets alleged that he was actually dismissed
in retaliation for his efforts to ensure that Teddy’s products complied with applicable law.
Accordingly, Sheets filed suit alleging wrongful termination in violation of an implied contract
of employment, a violation of public policy, and a malicious discharge.
Held. The Supreme Court of Connecticut determined that an employer does not have a
completely unlimited right to terminate the services of an at-will employee. Specifically, the
court held that an exception exists to the traditional rules governing at-will employment where
the discharge contravenes a clear mandate of public policy. Here, the Connecticut Legislature
had established a public policy of consumer protection and that it would be improper to uphold
Sheets’ termination for attempting to copy with that policy. According to the court, “an
employee should not be put to an election whether to risk criminal sanction or to jeopardize his
continued employment.”
NEW YORK
Goldman v. White Plains Ctr. for Nursing Care, LLC, 2008 NY Slip Op 7760, 1 (N.Y. 2008) –
Expiration of a two-year employment contract does not give rise to the common law rule of
successive one-year implied contracts when the employee continues working without a new
agreement and where the contract imposed an express obligation to renegotiate a new
contract.
Overview. Plaintiff entered into a two-year employment agreement to become the administrative
director of two skilled nursing facilities. The contract specified that the parties would “enter into
good faith negotiations . . . with respect to renewal of th[e] Agreement on mutually agreeable
terms” no less than nine months before the contract was due to expire. At expiration of the
contract or termination of employment, the employer would “be released of any responsibility or
obligation hereunder, except for payment of salary and benefits accrued to the effective date of
such expiration or termination.” Finally, the contract included a stipulation that it represented
the “entire Agreement and understanding” of the parties and could “not be changed, modified or
amended, except by a writing signed by” the Plaintiff and the employer. Plaintiff and her
employer never discussed renewal of the agreement and Plaintiff continued to work after the
contract expired. The facilities were later purchased by Defendants. In conjunction with that
transaction, Defendants executed an assignment and assumption of contracts, which listed
Plaintiff’s employment contract among the documents provided to the purchasers. Three months
later, Defendants terminated plaintiff’s employment. Plaintiff filed suit for breach of contract.
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Held. The Court of Appeals of New York held that the common-law rule, which recognizes an
inference that parties intend to renew an employment agreement for an additional year where the
employee continues to work after expiration of an employment contract, was contrary to the
renewal provisions of the contract and conflicted with the well-established rule that, absent an
agreement establishing a fixed duration, an at-will employment relationship is presumed,
terminable at any time by either party. The Court of Appeals noted that the common-law
presumption — developed in the 19th century before the establishment of the employment atwill doctrine — can be rebutted by demonstrating that the parties did not intend to allow a
contract to renew automatically. Here, the employer and employee agreed that the contract
memorialized their understanding, could be modified only in writing, and expired on a specified
date absent additional negotiations for a new agreement. Therefore, application of the commonlaw presumption would be contrary to principles of contract interpretation and the employment
at-will doctrine. Accordingly, the court held that Plaintiff’s employment became an at-will
arrangement upon expiration of the contract.
Commentary. Parties can avoid uncertainty regarding application of the common-law rule by
specifying that continuation of the employment relationship after the expiration of the
contractual period will result in either successive one-year extensions of employment or at-will
employment status.
Smalley v. Dreyfus Corp., 2008 NY Slip Op 1252 (N.Y. 2008) – Unanimous Court of Appeals
ruling reaffirms New York state’s long-recognized doctrine of employment at-will, which,
absent a contractual, constitutional, or statutory prohibition, permits employers to
terminate employees at any time or for any reason.
Overview. In January 2001, plaintiff Gerald Thunelius, the director of Dreyfus’s Taxable Fixed
Income Group (TFIG), heard rumors regarding a merger that could affect his department but was
assured by the company’s officers that no merger was under consideration. The other four
plaintiffs allegedly joined Dreyfus’ TFIG only after learning that the company denied these
rumors. The plaintiffs further alleged that, in April 2004, Dreyfus’s CEO told the TFIG that
merger plans with Standish were “off the table,” and that the group would remain intact for at
least one more year. In the fall of 2004, however, the rumors circulated again, and Dreyfus’
officers neither confirmed nor denied their veracity. The merger in fact, did take place in late
2004 and every member of the TFIG was fired shortly after. The five plaintiffs sued Dreyfus in
state court alleging, among other things, that they were fraudulently induced to join and stay with
Dreyfus. The trial court dismissed the complaint in its entirety, noting that at-will employees
cannot reasonably rely on their employers’ promises of continued employment, and that the
plaintiffs failed to allege any injuries in addition to their termination. On appeal, the Appellate
Division modified the lower court’s ruling and reinstated the plaintiffs’ fraudulent inducement
claim.
Held. After quoting the at-will language of the plaintiffs’ employment contracts, and noting that
the plaintiffs had signed and agreed to that term, the Court of Appeals reversed the Appellate
Division and dismissed the fraudulent inducement cause of action. The unanimous opinion
reaffirmed the long-recognized doctrine of employment at-will in New York, stating that,
“absent a constitutionally impermissible purpose, a statutory proscription, or an express
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limitation in the individual contract of employment, an employer’s right to terminate an
employment at-will remains unimpaired.” The court also noted that it had repeatedly refused to
recognize exceptions to, or pathways around, these principles. Moreover, in dismissing the
fraudulent inducement claim, the court ruled that “length of employment is not a material term of
at-will employment” and that “neither party can be said to have reasonably relied upon the
other’s promise not to terminate the contract.”
Wieder v. Skala, 80 N.Y.2d 628 (1992) – A law firm has an implied obligation of good faith
not to terminate an attorney for following the professional rules he is required to follow to
remain a bar-approved attorney, especially since bar approval is essential to his
employment with the law firm.
Overview. Plaintiff, an associate in a law firm, asked the firm to assign another associate to
represent him in a real estate transaction. This associate neglected the project and then lied to
Plaintiff to cover up his inattention. When Plaintiff asked the firm’s partners to report the
associate’s misconduct to the Appellate Division’s Disciplinary Committee, as required by New
York’s Code of Professional Responsibility, they balked. When the firm subsequently dismissed
Plaintiff, he sued, claiming retaliatory discharge and breach of implied contract. The Supreme
Court dismissed his complaint on account of the employment at-will doctrine and the Appellate
Division affirmed.
Held. The court held that Plaintiff stated a valid claim for breach of contract based upon an
implied-in-law obligation in his relationship with the law firm. The court reasoned that intrinsic
to the relationship between Plaintiff and the law firm was an unstated but essential compact that
in conducting the firm’s legal practice, both Plaintiff and the law firm would do so in compliance
with the prevailing rules of conduct and ethical standards of the profession. According to the
court, any assertion that Plaintiff, as an associate in their employ, acted unethically and in
violation of one of the primary professional rules, amounted to nothing less than a frustration of
the only legitimate purpose of the employment relationship. Consequently, the Wieder court
carved out a narrow exception to at-will employment, reasoning that the firm had an implied
obligation of good faith not to terminate the attorney for following the professional rules required
to remain a bar-approved attorney, which was essential to his employment with the firm. The
court hinged its finding on the fact that the attorney and law firm were involved in a “common
professional enterprise,” and that the firm’s implied obligation not to discourage the attorney
from complying with professional rules of conduct, which the firm was also bound to follow,
furthered the central purpose of the employment agreement.
Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458 (1982) – An employer’s express written policy
limiting its right of discharge, and the employee’s detrimental reliance on that policy in
accepting the employment, limits the employer’s right to discharge an at-will employee.
Overview. Plaintiff had been employed by Prentice-Hall. Plaintiff was recruited by McGrawHill and informed that his employment would be governed by the employees’ handbook, which
represented that McGraw-Hill would “resort to dismissal for just and sufficient cause only, and
only after all practical steps toward rehabilitation or salvage of the employee have been taken
and failed.” Plaintiff relied on these undertakings in good faith and left his former employer to
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work for McGraw-Hill, thereby forfeiting “accrued fringe benefits and a salary increase
proffered by Prentice-Hall to induce him to remain in its employ.” Plaintiff routinely rejected
other offers of employment to remain at McGraw-Hill because of these assurances. Moreover,
Plaintiff was instructed by his supervisors to adhere strictly to the handbook’s procedures when
considering the dismissal of subordinates. Plaintiff continued his employment with
McGraw-Hill for eight years, during which he was promoted with periodic raises. Plaintiff was
subsequently dismissed without just cause or an opportunity for rehabilitation.
Held. The court held that the representation in the employee handbook that Plaintiff would be
dismissed “for just and sufficient cause only,” and Plaintiff’s detrimental reliance on that policy,
constituted an express agreement between the parties that limited McGraw-Hill’s right to
discharge Plaintiff as an at-will employee. Specifically, the court determined that the
inducement to leave Prentice-Hall with the assurance that he would not be discharged by
McGraw-Hill without probable cause; the inclusion of that assurance in his employment
application; Plaintiff’s rejection of offers of other employment in reliance on that assurance; and
finally, that when he recommended that subordinates be discharged, he was instructed to proceed
in accordance with the handbook to assure that McGraw-Hill would not be subject to legal
action, when taken together raised an issue as to whether Plaintiff and McGraw-Hill had entered
into an agreement whereby McGraw-Hill bound itself to a promise not to discharge Plaintiff for
other than just and sufficient cause. As such, these cumulative factors were sufficient to state a
cause of action for breach of contract.
VERMONT
Regimbald v. General Elec. Co., 2007 WL 128963 (D. Vt. 2007) – Reporting conduct that
may have been intended to commit a fraud upon the federal government constitutes
protected activity for purposes of a retaliatory discharge claim by an at-will employee.
Overview. Regimbald was employed by GE at an aircraft engine component manufacturing
facility in North Clarendon, Vermont. In April 2004, Regimbald accused other GE employees of
“mischarging,” meaning that the employees were “falsely reporting employee work time, which
in turn results in a false pay voucher.” Regimbald claimed that when questioned about the
possibility of mischarging, the employees in his work area responded by falsely accusing him of
having made threatening and sexually inappropriate remarks. GE investigated both the
mischarging claim and the reports of Regimbald’s intimidating and sexually inappropriate
comments. In May 2004, Regimbald was notified of the results of the investigation and was
subsequently informed of his firing. In his amended complaint, Regimbald described himself as
a “whistleblower,” raised a claim for retaliation, and noted that GE is a government contractor,
thereby implying that mischarging for employee work time constituted a fraud upon the federal
government.
Held. The court held that reporting conduct that may have been intended to commit a fraud upon
the federal government rises to the level of a compelling public policy concern. As such,
Regimbald’s conduct was protected activity for the purpose of his retaliatory discharge claim.
While noting that improprieties in a private company’s billing practices are unlikely to rise to the
level of a compelling public policy concern, the court noted that the level of public concern rises
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when the fraud is being committed on the government. The court nevertheless granted GE’s
motion for summary judgment because it showed a legitimate, nonretaliatory reason for the
firing, and Regimbald was not able to produce sufficient evidence to support a rational finding
that the legitimate reasons proffered by GE were false or a pretext.
United States ex rel. Harris v. EPS, Inc., 2006 WL 1348173 (D. Vt. 2006) – Supervisors
cannot be held personally liable for terminating at-will employees in violation of public
policy.
Overview. Harris was an at-will employee at EPS, a Vermont corporation. In January 2004,
Harris learned that certain EPS employees were signing and submitting worksheets stating that
verifications had been performed when in fact they had not. Harris informed his supervisors,
Hutchins and Fletcher, both of whom initially appeared to take his concerns seriously.
Subsequently, Harris began to believe that his allegations of fraud were not being taken
seriously. On March 24, Harris asked to be relieved of his responsibility over the area at issue,
because he felt that his concerns were not being addressed. That same day, EPS terminated
Harris, alleging that he had been insubordinate to a supervisor, that he had raised his voice, and
that he had asked to be fired. Shortly thereafter, Harris brought filed suit against EPS, Hutchins,
and Fletcher, alleging, among other things, that Defendants had violated Vermont public policy
by taking adverse employment actions against him. EPS sought to dismiss the case pursuant to
Fed.R.Civ.P. 12(b)(6), or, in the alternative, to stay the case pending arbitration as agreed to in a
binding agreement. Hutchins and Fletcher filed a motion to dismiss on the ground that they had
no individual liability as supervisors.
Held. With respect to Hutchins and Fletcher’s motion, the court held that Vermont case law
provided no support for Harris’s action for discharge in violation of public policy against
supervisors in their individual capacities. Applying the standards set out in LoPresti and Adams,
the court stated that Vermont state courts have permitted companies and other organizations to
be sued for terminating employees in violation of public policy. The court, however, noted that
Harris did not supply any cases where such actions were permitted against supervisors or other
individuals and, moreover, that case law in other jurisdictions expressly foreclosed this. See,
e.g., Waters v. Collins & Aikman Prods. Co., 208 F. Supp.2d 593, 595 (W.D.N.C. 2002) (“North
Carolina does not recognize a claim against a supervisor in an individual capacity for wrongful
discharge in violation of public policy.”). As such, Hutchins and Fletcher’s motion to dismiss
was granted.
Payne v. Rozendaal, 147 Vt. 488 (1986) – At-will employees may be discharged at any time
with or without cause, unless there is a clear and compelling public policy against the
reason advanced for the discharge. Conduct considered cruel or shocking to the average
person’s conception of justice is contrary to public policy even if the policy is not explicitly
set forth in written laws.
Overview. The employer, an automobile dealer, sought advice from a firm during a time when
profits were lower than expected. Based on the firm’s advice to change “a retirement home
image” and hire “young go-getters,” the employer fired the older at-will employees. The
plaintiffs commenced an action claiming that they were discharged from their employment solely
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on the basis of their age, and that such discharge was in contravention of state law even though
they were at-will employees. The employer argued that there was no public policy under
Vermont law prohibiting the discharge of an at-will employee on the basis of age because at the
time of the discharge there was no statutory directive concerning age discrimination. The lower
court agreed with the employer and dismissed the claim because there was no state law in
existence at the time of the discharge that would have restricted the employer’s right to discharge
the plaintiffs on the basis of their age.
Held. The Supreme Court of Vermont held that the absence of a statutory directive was not
dispositive of whether a public policy against such practices existed at the time of discharge.
The Payne court rejected the notion “that the public policy exception to at-will employment
contracts must be legislatively defined.” Id. at 493. The court then proceeded to define public
policy as “the community common sense and common conscience, extended and applied
throughout the state to matters of public morals, public health, public safety, public welfare, and
the like,” and indicated that when an employer’s course of conduct with regard to an at-will
employee “is cruel or shocking to the average [person’s] conception of justice,” such conduct
must be considered contrary to public policy even if the policy is not explicitly set forth in
Vermont’s written laws. Id. at 492-93 (quoting Pittsburgh, Cincinnati, Chicago & St. Louis
Ry. v. Kinney, 95 Ohio St. 64 (Ohio 1916)).
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DELAWARE
Shomide v. ILC Dover, Inc., 521 F. Supp. 2d 324 (D. Del. 2007) – The covenant of good faith
and fair dealing limits at-will employment only: (1) where the termination violated public
policy; (2) where the employer misrepresented an important fact and the employee relied
thereon either to accept a new position or remain in a present one; (3) where the employer
used its superior bargaining power to deprive an employee of clearly identifiable
compensation related to the employee’s past service; and (4) where the employer falsified
or manipulated employment records to create fictitious grounds for termination.
Overview. Tokunbo Shomide, a black male of African origin, was employed as a senior design
engineer by ILC Dover, Inc., from March 9, 1998 until his lay-off on April 8, 2002. Shomide
alleged that while employed by ILC Dover, he was constantly harassed and mocked by his white
co-workers because of his accent, demoted without cause, not considered for equal training or
educational opportunities, disciplined when other employees who committed the same acts were
not, and kept under constant observation by his supervisors. Shomide filed a charge of
discrimination with the EEOC on September 23, 2002, and filed suit against ILC Dover alleging
discrimination and retaliation and a claim for breach of the covenant of good faith and fair
dealing.
Held. Shomide’s motion for summary judgment was denied. With respect to the latter claim,
the court explained that the covenant of good faith and fair dealing limits at-will employment
only in very narrow categories: (1) where the termination violated public policy; (2) where the
employer misrepresented an important fact and the employee relied thereon either to accept a
new position or remain in a present one; (3) where the employer used its superior bargaining
power to deprive an employee of clearly identifiable compensation related to the employee’s past
service; and (4) where the employer falsified or manipulated employment records to create
fictitious grounds for termination. Shomide’s claim for breach of the implied covenant of good
faith and fair dealing, however, was based on his allegations that ILC Dover failed to promote
him, denied him of educational opportunities, demoted him without cause, and discriminated
against him because of his nationality and race – none of which fell within the second, third, or
fourth categories of the covenant’s limits to the at-will employment doctrine. As for the first
category, which creates an exception where the termination violated public policy, the court
explained that in Delaware the exclusive remedy for race discrimination in employment lies
under the Delaware Discrimination Employment Statute. As such, Shomide was precluded by
the Delaware Discrimination Employment Statute from recovering under a public policy theory.
Therefore, because Shomide could not present evidence to proceed on the claim, his motion for
summary judgment was denied.
E.I. DuPont de Nemours and Co. v. Pressman, 679 A.2d 436 (Del. 1996) – Claim for breach
of covenant of good faith and fair dealing must be supported by an explicit and
recognizable public policy.
Overview. Plaintiff worked for Defendant as a scientist and consistently received raises and
positive evaluations from his superiors. Upon becoming concerned about a possible conflict of
interest created by one superior, Plaintiff met with that superior. When confronted with
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Plaintiff’s allegations, the superior became livid and told Plaintiff to mind his own business.
Moreover, the superior restricted Plaintiff’s travel, prohibited Plaintiff from having visitors
without permission, and placed an anonymous and unsigned negative evaluation in Plaintiff’s
personnel file. Eventually, Plaintiff’s employment was terminated. Plaintiff brought a claim
against Defendant in the trial court for breach of the covenant of good faith and fair dealing. A
jury entered a verdict in favor of Plaintiff. Defendant appealed the breadth of the jury
instructions with respect to the covenant of good faith and fair dealing to the Delaware Supreme
Court.
Held. The court remanded the case because the trial court’s jury instructions were excessively
broad. The court, while acknowledging that the at-will employment doctrine remains a “heavy
presumption,” reasoned that “the duty of good faith may be breached by termination in some
circumstances or some other public policy implicated by a termination.” Furthermore, the court
reasoned that an employee seeking protection from firing based on the public policy exception
must assert some legislative, administrative, or judicial authority, and the employee must occupy
a position with responsibility for that particular interest. According to the court, Plaintiff’s
allegations that he was fired for questioning the propriety of the superior’s business practices
could not “fit within the public policy category since he [did] not identify an explicit and
recognizable public policy.”
NEW JERSEY
Merkle v. T-Mobile USA, Inc., 2008 U.S. Dist LEXIS 63614 (D.N.J. 2008) – An at-will
employee must do more than plead “corporate culture” in alleging the existence of an
unwritten, company-wide policy that converts an at-will employment relationship into an
implied employment contract.
Overview. Michael Merkle worked for T-Mobile for 11 years beginning on July 15, 1996. He
served as regional sales director for the New York metro area in 2004 and was scheduled to
become the director of accounts, northeast division, on April 1, 2007. On February 15 and 16,
2007, Merkle attended an annual conference for T-Mobile employees in Vernon, New Jersey.
Approximately 100 employees attended, among them T-Mobile executive officers and Merkle’s
supervisors. At the conference, T-Mobile hosted a social event that “included an open bar with
cocktails served throughout the evening.” One month later, Merkle was called to a meeting and
was told that he was seen drunk at the February conference. Merkle stated that he consumed
alcohol in moderation, was at no point intoxicated, and did not do anything that could be seen as
a detriment to the company. Nevertheless, Merkle was told that he was being fired “for cause.”
Merkle filed suit against T-Mobile alleging T-Mobile breached an implied contract of
employment by failing to conduct an internal investigation and use progressive discipline as
required by policies contained in the company handbook and breached an unwritten, companywide policy, procedure and practice of using progressive discipline before terminating an
employee.
Held. While acknowledging the rule that allegations of “‘corporate culture’ cannot convert the
at-will employment relationship into something more,” the court refused to dismiss Merkle’s
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claim because his complaint asserted claims that were distinguishable from the generic
“corporate culture claims” found to be lacking in other cases. Specifically, Merkle alleged that
he had “first-hand knowledge of the policy and practice of providing employees with prior
warning and discipline, either verbal and/or written, before the Company makes a decision to
terminate an employee.” Merkle also claimed that as a former supervisor he was “authorized to
provide and did engage in providing such warnings to employees prior to termination on
numerous occasions.” And Merkle listed several employees that received progressive discipline
from him or from other supervisors. These incidents included events where the employees
engaged in activity that was allegedly in violation of the alcohol policy. For example, Merkle
claimed that at a company sponsored event a former manager consumed alcohol and “punched a
subordinate in the face shattering the glass in the subordinate’s face,” but only received a
warning from T-Mobile. These specific factual allegations were sufficient to support the claim
that there was a company-wide policy implemented in cases similar to Merkle’s. As such, the
court held that Merkle had done more than plead “corporate culture” in alleging the existence of
an unwritten, company-wide policy that converts an at-will employment relationship into implied
employment contract.
Pauza v. Std. Group, Inc., 2008 U.S. Dist. LEXIS 105493 (D.N.J. 2008) – An employee must
establish the existence of an express written agreement limiting the employer’s right of
termination to countermand the principles governing employment at-will.
In early January 2005, Frank Pauza met with Steven Levkoff, the President of The Standard
Group, Inc. (“Standard”), and Lou Cortes, the Vice President of Standard, about employment at
Standard. On January 27, 2005, Levkoff sent an e-mail to Pauza confirming certain terms of his
employment as the Vice President of Sales/Supply Chain Management. Aside from the
January 27, 2005 e-mail, no other documentation sets forth the terms and conditions of Pauza’s
employment with Standard. Pauza agreed to become an employee of Standard. At the beginning
of Pauza’s employment with Standard, Pauza signed an acknowledgment that he received
Standard’s Personnel Policies handbook and on August 15, 2005, Pauza signed an
acknowledgment that he received Standard’s updated Personnel Policies handbook. Both
handbooks described Standard employees as being “at will” employees. On January 11, 2006,
Standard terminated Pauza’s employment.
Pauza filed suit against Standard alleging breach of contract based on Standard’s failure to
provide him with severance pay, breach of the duty of good faith and fair dealing, conversion of
severance benefits, unjust enrichment, and violation of N.Y. Labor Law § 190 et seq. In
particular, Pauza claimed that he had numerous conversations with Levkoff wherein the terms of
an employment agreement were discussed and he argued that the January 27, 2005 e-mail
summarized portions of the agreement between him and Standard, but did not set forth every
detail of the agreement, including severance.
Held. The district court granted Standard’s motion for summary judgment on all of the claims.
The court held that Pauza was an at-will employee since Pauza could not dispute that there was
no written agreement specifying a fixed term of employment. According to the court, “[i]t is
only where a plaintiff can establish the existence of an express written agreement limiting the
employer’s right of termination, that the principles governing employment at will are
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inapplicable.” Because Pauza was an at-will employee, he was terminable at any time and was
not entitled to severance. Moreover, since Pauza failed to establish the existence of an
employment contract, there could be no finding by the court that Standard’s breached a covenant
of a good faith and fair dealing. And in light of the fact that Pauza’s breach of contract claim
failed, he could not establish a legal right to the severance pay that he claimed he was owed as
there was no mention of severance pay in any writing.
PENNSYLVANIA
Ayers v. Osram Sylvania, Inc., 2008 U.S. Dist. LEXIS 72644 (M.D. Pa. 2008) – Termination
based on the exercise of a right to receive employer-provided short-term disability benefits
does not fall within any recognized public policy exception to Pennsylvania’s employment
at-will doctrine.
Overview. Brock Ayers was an at-will employee of Osram Sylvania, Inc. On January 12, 2006,
while on leave from work, Ayers sustained a recurrence of a chronic back problem. Ayers was
scheduled to work on Monday, January 16, 2006; however, on Sunday, January 15, 2006, Ayers
contacted his supervisor, David Park, to inform him he would not be in work on Monday due to
his back injury. Ayers was told to report to the plant on Monday to file the necessary medical
paperwork regarding the disability. Ayers was unable to work and received short-term disability
benefits from Osram Sylvania. It was Osram Sylvania’s practice to include employees who were
unable to work, such as Ayers, on the work schedule, to begin work on or about the day each
month when a treating physician would be completing the employer supplied medical form.
Ayers, aware of this practice, knew he would be included on the work schedule for April 16,
2006. Accordingly, he called the Medical Department on April 14, 2006, informed them of his
medical appointment on April 17, 2006, and informed the Department that he would be unable to
make his 11:40 p.m. shift on April 16, 2006. Subsequently, Osram Sylvania terminated Ayers on
April 20, 2006, alleging violation of the Three Day Rule, which stated that “an employee who is
absent for three consecutive scheduled work days without calling departmental supervision or the
medical department to advise them [of] the reason for the absence, will be considered to have
resigned.” Ayers asserted that Osram Sylvania incorrectly determined that he violated the Three
Day Rule.
Ayers filed a complaint alleging that he was “wrongfully terminated because he exercised his
right to receive short-term disability benefits,” and that “Defendant’s conduct was retaliatory and
self-serving and violates a clearly defined public policy.”
Held. The court granted the Osram Sylvania’s dismissal motion holding that the Ayers’ common
law wrongful termination claim failed because termination based on the exercise of a right to
receive employer-provided short-term disability benefits did not fall within any recognized
public policy exception to Pennsylvania’s employment at-will doctrine. According to the district
court, under Pennsylvania law, in order for the public policy exception to apply, the alleged
violation of public policy must be of Pennsylvania public policy, not solely an alleged violation
of federal law. Moreover, the court explained that an essential element in permitting a cause of
action for wrongful discharge is a finding of a violation of a clearly defined mandate of public
policy that “strikes at the heart of a citizen’s social right, duties and responsibilities.” The court,
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however, reasoned that such grounds could not be found in this case where private employerprovided short-term disability benefits are not a benefit authorized by statute and opposing case
law in which Pennsylvania courts have rejected a wrongful discharge claim premised on an
intent to prevent collection of employer-provided short-term disability benefits.
Rothrock v. Rothrock Motor Sales, Inc., 883 A.2d 511 (Pa. 2005) – A supervisor who refuses
to dissuade an employee from seeking workers’ compensation benefits has a cause of action
for wrongful discharge from employment.
Overview. Plaintiff worked as body shop manager for Defendant, a car dealership. Plaintiff’s
son, who was a subordinate employee, allegedly suffered a work-related injury. Defendant’s
owner and president, who believed that Plaintiff’s son was actually hurt in a stockcar accident,
instructed Plaintiff to have his son sign a form releasing Defendant. By signing the form,
Plaintiff’s son would have waived his workers’ compensation benefits. Defendant’s owner and
president told Plaintiff that he and his son would both be fired if Plaintiff’s son did not sign the
form abrogating his rights under the Workers’ Compensation Act. While Plaintiff initially
attempted to have his son sign the release, he told his son not to sign the form, and his son did
not execute the release. After a direct attempt by Defendant’s owner and president to have
Plaintiff’s son sign the release failed, Defendant’s owner and president fired both Plaintiff and
his son. Plaintiff brought a claim in the trial court, alleging that he was terminated for refusing to
coerce his son into waiving workers’ compensation benefits. A jury entered a verdict in favor of
Plaintiff, and after the trial court ended post-trial motions seeking remittitur and judgment
notwithstanding the verdict, Defendant appealed to the Pennsylvania Superior Court. The
Superior Court affirmed the trial court’s decision, and Defendant appealed to the Pennsylvania
Supreme Court.
Held. The court held that “a Pennsylvania employer may not seek to have a supervisory
employee dissuade a subordinate employee from seeking [workers’ compensation] benefits. If
an employer does so, the supervisory employee shall have a cause of action for wrongful
discharge from employment.” The court based its holding largely on precedent, in which it held
that an employee fired for pursing workers’ compensation has a claim for wrongful discharge.
The court reasoned that “it is self-evident that if public policy prohibits termination for seeking
workers’ compensation, it also prohibits termination for declining to compel a subordinate
employee to not seek compensation.” Moreover, the court reasoned that “a public policy
prohibiting an employer’s termination of a subordinate employee for seeking [workers’
compensation] would be jeopardized unless we protect such employee’s supervisors from an
employer’s demand that he coerce a subordinate employee into forgoing . . . benefits or face
termination.” Finally, the court reasoned that Defendant had no overriding justification for
terminating Plaintiff, and that Plaintiff’s activity was a substantial factor in Defendant’s decision
to terminate his employment.
CIRCUIT COURT OF APPEALS
Brennan v. Cephalon Inc., 2008 U.S. App. LEXIS 21120 (3rd Cir. 2008) – To qualify under
the “statutorily imposed duty” exception to Pennsylvania’s at-will employment doctrine, an
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at-will employee must be under an affirmative statutorily imposed duty to comply with the
statute.
Overview. Cephalon is a biotechnology and drug company. In 2000, it acquired Anesta Corp.,
the developer and manufacturer of Actiq, a prescription opioid designed to treat cancer pain. As
a condition of the Food and Drug Administration’s (“FDA”) approval of Actiq, Anesta agreed to
a Risk Management Program (“RMP”). The RMP contained strict guidelines for the labeling,
packaging, and marketing of Actiq. It also required that Cephalon monitor and tabulate certain
patient, prescription, and usage information and regularly report this information to the FDA. In
2003, Brennan, an at-will employee, was assigned to audit Cephalon’s compliance with the terms
and conditions of the Actiq RMP. In October 2003, Brennan prepared a report in which he
concluded that Cephalon was not complying with FDA safety guidelines and threatened to report
the Cephalon to the FDA. Cephalon terminated Brennan shortly after and cited unsatisfactory
performance on separate matters as the cause.
Brennan filed a complaint in June 2004 against Cephalon and several of its employees, arguing
that he was wrongfully terminated in violation of public policy because he had a statutory duty
under certain federal and state criminal laws and under the RMP to submit the non-compliance
data to the FDA, and failure to do so would have exposed him to criminal violations and civil
liability. The District Court dismissed all of Brennan’s claims.
Held. In affirming the lower court’s grant of summary judgment in favor of Cephalon, the Third
Circuit Court of Appeals held that Brennan failed to show that he was under an affirmative
statutory duty to report his employer’s failure to comply with FDA-approved conditions. The
Brennan court explained that in Pennsylvania, an at-will employee generally can be terminated
for any reason, with or without cause, but an exception to this rule exists in limited
circumstances where the termination violates a clear mandate of public policy. Noting that the
parameters of the public policy exception are not explicitly defined, the court explained that
Pennsylvania courts generally have limited its application to situations in which an employer:
(1) requires an employee to commit a crime; (2) prevents an employee from complying with a
statutorily imposed duty; or (3) discharges an employee when specifically prohibited from doing
so by statute. According to the court, Brennan’s claim rested on an alleged “statutorily imposed
duty.” Brennan, however, cited only federal and state laws prohibiting false statements to
government officials. The court concluded that “[n]one of these statutes imposed directly on
Brennan an affirmative duty to report his audit findings to the FDA.” The Brennan court also
noted that the FDA-approved risk management program did not direct Cephalon to conduct an
audit or to share an audit report like Brennan’s with the government. Thus, “in the absence of a
clear and direct duty of disclosure,” the statutorily imposed duty prong of the at-will employment
exception was not applicable.
Dyche v. Bonney, 2008 U.S. App. LEXIS 9853 (3rd Cir. 2008) – Detrimental reliance is not
an exception to the at-will employment doctrine.
Overview. Charles Dyche applied to become a Pennsylvania State Police (“PSP”) trooper on
May 21, 2003. As part of the application process, he admitted prior illegal but uncharged sexual
conduct with a minor. Dyche asserted the PSP promised him that his disclosure of this incident,
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which would normally disqualify an applicant, would not impede his admission to the
Pennsylvania State Police Academy (“Academy”). Dyche was subsequently admitted to the
Academy, which the PSP asserts was an oversight by its review panel. On February 27, 2004,
after seventeen weeks in training at the Academy, the PSP rescinded Dyche’s acceptance into the
training program based on the incident he disclosed.
Dyche sued officials of the PSP in the United States District Court for the Middle District of
Pennsylvania for breach of contract based on promissory estoppel and a claim under 42 U.S.C.S.
§ 1983, alleging Fourteenth Amendment procedural due process violations. The district court
granted Defendants’ motion for summary judgment on all of Dyche’s claims.
Held. The Court of Appeals held that Dyche was properly precluded from asserting a breach of
contract claim based on promissory estoppel. The court first noted that in Pennsylvania, “as a
general rule, there is no common law cause of action against an employer for termination of an
at-will employment relationship.” The court further explained that “[e]xceptions to this rule
have been recognized in only the most limited of circumstances, where discharges of at-will
employees would threaten clear mandates of public policy” and that, based on those principles,
Pennsylvania law “does not prohibit firing an employee for relying on an employer’s promise.”
With respect to the due process claim, the court reasoned that Dyche could not proceed with such
a claim because he did not have a property interested in continued employment as Dyche was
promised only the opportunity to become an at-will employee. Under 71 Pa. Stat. Ann. § 65(f),
PSP candidates served an 18-month probationary period as at-will employees. Thus, even if
promissory estoppel could give contractual force to a promise, Dyche could not have reasonably
relied upon it as a guarantee of ongoing employment since as an at-will employee his admission
to the Academy could have been rescinded for any reason or for no reason at all. Since Dyche,
as a probationary PSP candidate, did not have a property interest in continued employment, there
was no basis for his due process claim, and summary judgment for the PSP officials was proper.
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MARYLAND
Glynn v. EDO Corp, et al., 536 F. Supp. 2d 595 (D. Md. 2008) – Common law claim for
wrongful discharge is unavailable where it duplicates a statutory remedy that vindicates
the public policy at issue.
Overview. Plaintiff, a defense contractor employee, worked on a government contract to provide
countermeasure systems against explosive devices in Iraq. After discovering that the systems did
not function properly, plaintiff informed managers about the system flaw and, when the
managers responded that the company would not recall shipped units or notify the Department of
Defense (DOD), plaintiff asked to see the contract in order to determine the extent of defendant’s
violations. After the managers refused, plaintiff met with the DOD’s Office of the Inspector
General to inform the government of his employer’s actions. Defendant then transferred
employees from plaintiff’s supervision, ordered employees not to associate with him and
ultimately terminated his employment. Plaintiff filed suit against defendant for violation of the
federal False Claims Act (FCA) and for wrongful discharge in violation of Maryland’s public
policy.
Held. The court granted defendant’s motion to dismiss plaintiff’s public policy claim on grounds
that it was duplicative of the remedy provided under the FCA. Citing Wholey v. Sears Roebuck,
370 Md. 38 (Md. 2002), the court restated the general rule that a plaintiff alleging a wrongful
discharge claim in violation of public policy must show that (1) the employee was discharged,
(2) the basis for the employee’s discharge violated some clear mandate of public policy, and
(3) there is a nexus between the employee’s conduct and the employer’s decision to fire the
employee. Reviewing the scope of the public policy prong, the court held that the claim is
unavailable when the statutory source of the public policy provides its own remedial scheme for
vindicating that policy. Since the purpose of the wrongful discharge tort is to provide a remedy
for an otherwise unremedied violation of public policy, Maryland law precludes use of the tort
for recovery where the tort relief is duplicative of a statute’s civil remedy. (Where there are
multiple sources of public policy and at least one public policy mandate does not arise from a
law that provides its own remedy, then an action for wrongful discharge based on that violation
may be brought because the cause of action would address a public policy violation that is not
protected by any remedy.) In plaintiff’s case, the FCA’s anti-retaliation provisions protect the
sole public policy interest implicated in his termination. Because the FCA provided a civil
remedy, plaintiff’s common law public policy claim was unavailable and he could not recover on
a claim for wrongful discharge under Maryland law.
Jackson v. Clark, et al., 564 F. Supp. 2d 483 (D. Md. 2008) – Reporting suspected criminal
activity internally is insufficient to state a wrongful discharge cause of action.
Overview. Plaintiff served in the Baltimore City Police Department (BCP) in a unit responsible
for human resource matters. In the process of rehiring a former employee, Plaintiff discovered
that, with the approval of the police commissioner and his deputy, the employee had never been
terminated and was still receiving her BCP salary while employed elsewhere. After plaintiff
brought the matter to the commissioner’s attention, the commissioner ordered BPD’s Internal
Affairs Division to investigate plaintiff and others for alleged criminal and administrative
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Fourth Circuit
improprieties. IAD sustained the charges against Plaintiff, he was demoted, and local news
outlets reported on the demotion. The commissioner then cancelled plaintiff’s previously
approved days off and told plaintiff that he would be fired if he attempted to use his unlimited
medical leave. Plaintiff retired from the BPD and filed a state law claim alleging that his
retirement constituted a constructive discharge in violation of Maryland public policy.
Held. The court held that it did not need to determine whether plaintiff suffered a constructive
discharge because the facts alleged by plaintiff did not support a wrongful discharge claim. The
court noted that Maryland case law has recognized a public policy goal of protecting witnesses
who report suspected criminal activity to appropriate authorities and that a wrongful discharge
cause of action therefore exists where employees are fired for reporting suspected criminal
activity. However, the public policy is not implicated when an employee investigates suspected
criminal activity and reports his suspicions solely to supervisors or internal investigators.
Reviewing plaintiff’s alleged facts, and taking into account plaintiff’s argument that IAD
constituted an appropriate authority (as the “police of the police”), the court noted that plaintiff
failed to allege that he actually reported his suspicions of criminal acts to IAD. By the time
plaintiff spoke to IAD, he was already facing charges and, in the context of the IAD
investigation, his exculpatory statements about himself and his suspicions of others did not
constitute the “reporting” of criminal activity. The court declined to find a wrongful discharge
cause of action where an employee, after discussing his suspicions with co-employees or
supervisors, waits until he is placed under suspicion with respect to the same matter and then
makes exculpatory disclosures during the ensuing investigation. Such disclosures, which are
principally motivated by a desire to exonerate oneself, do not constitute “making a report” under
Maryland law.
Bharadwaja v. O’Malley, et al., 2006 U.S. Dist. LEXIS 74096 (D. Md. 2006) – City code does
not constitute state public policy sufficient to support wrongful discharge claim.
Overview. Plaintiff worked for the City of Baltimore. In 2002, he emailed a supervisor to report
concerns about the performance of a computer system used by the City to automate functions in
several departments. Plaintiff allegedly raised issues about the performance of the computer
system again on several occasions and was retaliated against by his supervisors for raising such
issues. After plaintiff was informed that his position was being eliminated, he filed suit
generally alleging wrongful discharge in violation of public policy and, in response to
defendant’s motion for summary judgment, argued for the first time that the applicable public
policy was expressed in the City of Baltimore’s “whistleblower” law.
Held. The court held that plaintiff’s claim for wrongful discharge failed as a matter of law
because he failed to meet the threshold requirement of “pleading with particularity the source of
the public policy” allegedly violated by his termination. In addition, the court found that, even if
it credited the argument in plaintiff’s opposition papers, plaintiff failed to state a claim for
wrongful discharge because the city code provision he relied on did not rise to the level of a
public policy of the entire state. The city code was limited in application to the City of
Baltimore and therefore did not constitute a statewide policy. As a result, it could not serve as
the basis for a wrongful discharge claim under Maryland common law.
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Fourth Circuit
NORTH CAROLINA
Gillis v. Montgomery County Sheriff’s Dept. and Fidelity & Deposit Co. of Maryland,
663 S.E.2d 447 (N.C. App. 2008) – Plaintiff must plead wrongful discharge cause of action
with specificity sufficient to place defendant on notice of public policy allegedly violated.
Overview. Plaintiff appealed the dismissal of her wrongful termination claim against the
sheriff’s department and its insurer. Plaintiff was employed as a 911 dispatcher in the
telecommunications center managed by the sheriff’s department. She alleged that, before her
termination, two members of the sheriff’s department threatened to terminate her employment
because she had informed co-workers that sheriff’s department personnel had used inmate labor
for their personal benefit. She filed suit alleging that she was wrongfully terminated “for reasons
that are against the public policy of North Carolina.” On appeal, she argued that it was error to
dismiss her wrongful termination claim because her complaint alleged facts that would support a
claim that her termination violated her constitutional right to free speech.
Held. The court rejected plaintiff’s contention that “the incorrect choice of the legal theory upon
which the claim is bottomed should not result in dismissal if the allegations are sufficient to state
a claim under some legal theory.” To the contrary, the court observed that the relatively liberal
standard of notice pleading is not observed in certain circumstances and that one such
circumstance is when an at-will employee brings a wrongful termination claim for an alleged
violation of public policy. In such cases, a claim must be plead with specificity and a plaintiff’s
complaint must allege a violation of an explicit statutory or constitutional provision or allege that
defendant encouraged plaintiff to violate a law that might result in potential harm to the public.
Since plaintiff’s complaint alleged merely that she was wrongfully terminated “for reasons that
are against the public policy of North Carolina,” defendants were not placed on notice of the
public policy that their termination of plaintiff violated. As a result, her complaint failed to state
a claim for wrongful termination and the trial court did not err in dismissing it.
Hughes v. Hewlett Packard Corp., 2008 U.S. Dist. LEXIS 71775 (W.D.N.C. 2008) – Plaintiff
is not required to allege that employer made an affirmative demand that she violate public
policy and that she was discharged for refusing to comply.
Overview. Plaintiff sued her former employer for gender discrimination and retaliation based on
her selection for workforce reduction following her complaint to human resources. Plaintiff’s
court complaint asserted claims under Title VII and under North Carolina’s prohibition against
discharge in violation of public policy. Following defendant’s motion to dismiss her public
policy claim, the magistrate judge issued a memorandum recommending that plaintiff’s sex
discrimination and retaliation claims should not be dismissed to the extent that they were brought
pursuant to North Carolina public policy. Defendant argued that the magistrate judge erred in his
recommendation and contended that the public policy exception in North Carolina requires an
employee to allege that she was terminated because she refused to follow her employer’s
affirmative demands that she violate public policy.
Held. The court held that, when filing a claim under North Carolina’s public policy exception, a
plaintiff is not required to allege that she was terminated for refusing to follow an affirmative
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Fourth Circuit
demand that she violate public policy. The court noted that, since North Carolina first
recognized the public policy exception in Coman v. Thomas Manufacturing Co., 325 N.C. 172
(1989), case law has established that there is no specific list of actions that constitute a violation
of public policy. Moreover, courts have agreed that public policy is violated when an employer
discharges an employee in contravention of express policy declarations contained in the North
Carolina General Statutes. Since the North Carolina legislature plainly announced its public
policy with respect to employment discrimination in the North Carolina Equal Employment
Practices Act (which states in part that “[i]t is the public policy of this State” to protect
employees against specified forms of discrimination), courts have acknowledged that a discharge
in violation of the Act can give rise to a claim of wrongful discharge in violation of public
policy. The court also reviewed at length precedent cited by DF in support of its argument and
dismissed the cases as either dicta or an unpublished opinion that did not constitute controlling
legal authority. The court, therefore, affirmed the magistrate judge’s recommendation.
SOUTH CAROLINA
Bolin v. Ross Stores, Inc. et al, 2009 U.S. Dist. LEXIS 10359 (D.S.C. 2009) – Attorney-client
privilege is not sufficient public policy to sustain a wrongful discharge claim.
Overview. Plaintiff alleged that several of his co-workers began a campaign to harass him and to
have him terminated. As part of the alleged campaign, one of his co-workers began to listen to
plaintiff’s phone calls and to record his conversations. In one of the recorded conversations,
plaintiff and his attorney discussed legal issues and sensitive information that plaintiff would be
embarrassed to have disclosed. Plaintiff alleged that his co-workers thereafter used the
recordings to harass him. Later, plaintiff was discharged without investigation after he and a coworker had an argument and the co-worker reported that plaintiff physically threatened him.
Plaintiff filed suit alleging that the recorded conversation was a factor in his termination and that
South Carolina public policy prohibited his employer from discharging him based on information
obtained through overhearing a conversation between the employee and his attorney, regardless
of the content of the conversation.
Held. The court held that, under the facts alleged, the attorney-client privilege did not constitute
a legally sufficient, “clear mandate of public policy” that could sustain an exception to at-will
employment. Discussing the South Carolina Supreme Court’s seminal decision in Ludwick v.
This Minute of Carolina, Inc., 287 S.C. 219 (1985), the Bolin court observed that Supreme Court
decisions since then have very narrowly construed the public policy exception and have only
recognized public policy claims in cases where an employer either forced an employee to violate
the law or the termination itself violated a criminal law. The attorney-client privilege, which is
“at best a rule of evidence . . . to be construed narrowly,” did not fit into the framework of the
public policy exception in South Carolina. Nor did plaintiff allege facts sufficient to show his
termination in anyway damaged, harmed, or undermined the integrity of the attorney-client
privilege or that the privilege had been destroyed in his case. Thus, the court granted defendants’
motion to dismiss plaintiff’s public policy claim.
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Fourth Circuit
Graham v. Sears, Roebuck and Co., 2008 U.S. Dist. LEXIS 20387 (D.S.C. 2008) – Internal
reporting of crime is insufficient to state a public policy cause of action but requiring
employee to acquiesce in commission of crime provides a public policy basis for stating a
claim.
Overview. Plaintiff worked in defendant’s Loss Prevention Department and began to encounter
problems with his supervisor after informing the supervisor’s manager of a theft committed by
the supervisor’s friend. Later, during an audit of store thefts, the supervisor allegedly instructed
plaintiff to report an artificially low level of loss and, when he refused, plaintiff was removed
from the audit and given a negative evaluation. After allegedly learning that his supervisor
falsified numbers in the audit, plaintiff reported her to Human Resources and, thereafter, he
suffered a number of adverse actions and was eventually fired. Plaintiff brought a public policy
claim against defendant, alleging that South Carolina had a clear public policy mandate against
theft and that defendant’s termination of him for refusing to engage in theft violated that
mandate. Defendant moved to dismiss the claim on the ground that the public policy exception
does not apply to the internal reporting of a crime within a company but only to certain situations
where the crime is reported to outside authorities.
Held. The court agreed with defendant’s argument that an employee cannot bring a public policy
claim unless he or she reports a crime to authorities outside the company. However, the court
also held that plaintiff nonetheless stated a public policy cause of action because he alleged his
employer required him to violate the law by engaging in theft. On the internal reporting issue,
the court briefly discussed Greene v. Quest Diagnostics Clinical Labs, Inc., 455 F.Supp.2d 483
(D.S.C. 2006) to make the point that there is no general public policy supporting the rights of
employees to internally report illegal conduct to their superiors. In contrast, though, the public
policy exception to the employment at-will doctrine specifically applies where an employer
requires an employee to violate the law and, because plaintiff alleged his employer required him
either to acquiesce in, further or allow theft, plaintiff stated a cause of action. The court
therefore denied the motion to dismiss. (Separately, the court noted that summary judgment may
be appropriate later if facts adduced in discovery show that the employer did not benefit from the
alleged violations of the law, since most of the cases recognizing the public policy exception
seem to involve the employer deriving some benefit from the unlawful conduct required of the
employee.)
Ramsey v. Vanguard Svs., Inc., 2007 U.S. Dist LEXIS 20670 (D.S.C. 2007) – Merely
inquiring about wages owed is not a sufficient public policy basis for sustaining a wrongful
discharge cause of action.
Overview. Plaintiff worked for defendant, a temporary staffing agency, and alleged that
defendant offered to pay him a weekly bonus for continuing to work while defendant phased out
its project at a certain site. Plaintiff later inquired about the status of his bonus and defendant
allegedly informed him that he would not receive the bonus pay until his job was terminated and
the project was completely phased out. Plaintiff claimed he was thereafter terminated for
inquiring about the status of his bonus pay and for asserting an entitlement to the bonus
compensation. After he filed a suit alleging retaliatory dismissal in violation of public policy,
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Fourth Circuit
defendant moved to dismiss the public policy claim and argued that plaintiff’s job ended merely
because the work itself ended and that plaintiff received the entire amount of bonus owed to him.
Held. The court rejected plaintiff’s argument that South Carolina public policy is violated when
an employer terminates someone for inquiring about wages believed to be owed. The court held
that South Carolina law does not support such a broad interpretation of the public policy
exception since the termination itself did not violate a law (especially where state law in fact
allows an employer to withhold disputed wages) or amount to a requirement that the employee
violate a law. Moreover, plaintiff failed to cite any cases suggesting that public policy protection
is invoked by merely questioning whether wages are owed. The court also observed that the
scope of at-will employment in the state entitles an employer to cease the employment
relationship if there is no meeting of the minds about employment terms and pay, and it would be
inconsistent with the law of at-will employment to force an employer to continue an employment
relationship with an employee under terms that are not agreeable to both.
Smith v. Voorhees College, 2007 U.S. Dist. LEXIS 74766 (D.S.C. 2007) – Common law
public policy claim is precluded where statutory remedy exists to vindicate the policy
violated by employee’s termination.
Overview. Plaintiff was a college professor who received regular contracts reflecting changes in
her salary. The contracts noted that a portion of her salary was paid from federal grants. When
she received a proposed contract in September 2004, she refused to sign it because salary
percentages attributed to various grant funds did not match the percentages approved in the
grants. This, in effect, left her without an employment contract and made her an at-will
employee. Thereafter, in June 2005, defendant terminated plaintiff for refusing to comply with
college and federal regulations requiring each employee to have a signed contract. Plaintiff then
filed suit in federal district court asserting a Title VII claim for retaliation (allegedly after she
complained of gender discrimination in her pay) and a state law claim alleging that defendant
committed a public policy tort when it terminated her in retaliation for refusing to falsify
documents in support of defendant’s violation of federal grant regulations. Defendant moved for
summary judgment on all claims.
Held. The court granted defendant’s motion on the state law claim for two reasons. First, it held
that a cause of action based on a public policy exception to at-will employment cannot be
asserted where federal or state statutory remedies exist to vindicate the public policies allegedly
implicated in the employee’s termination. Since plaintiff had a federal statutory remedy for her
retaliation claim under Title VII, and to the extent her public policy claim related to conduct
covered by Title VII, the federal remedy precluded her public policy cause of action. Second,
the court concluded that plaintiff did not present any evidence to show that she would have been
violating federal law or regulations by signing the proposed faculty contract. She therefore
failed to bring her claim within the public policy exception because she did not show that she
was arguably discharged for refusing to cooperate in conduct that would have violated any law,
or to show that she was discharged in retaliation for refusing to violate the law.
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Fourth Circuit
VIRGINIA
Horner v. Southwest Virginia Reg. Jail Auth., et al., U.S. Dist. LEXIS 12050 (W.D. Va. 2009)
– Virginia Human Rights Act precludes wrongful discharge cause of action based on public
policies reflected in the Act.
Overview. Plaintiff, a detention officer, alleged that she was subjected to harassment by
supervisory personnel on the basis of her gender and that her employer had engaged in a pattern
and practice of discriminating against women in disciplinary actions and termination. Following
her termination, plaintiff sued defendant alleging that she was fired because of her gender and in
order to retaliate against her for complaints of discriminatory treatment. She also alleged that
defendants’ actions violated the public policies of Virginia. Defendants moved to dismiss her
public policy claim on the ground that the Virginia Human Rights Act (VHRA) precluded a
common law cause of action for wrongful discharge for conduct covered by the Act.
Held. The court held that the VHRA barred plaintiff from pursuing a common law cause of
action based on violation of public policies reflected in the VHRA. The court noted that the
1995 amendments to the VHRA added a provision stating that “[c]auses of action based upon the
public policies reflected in this article shall be exclusively limited to those actions, procedures
and remedies, if any, afforded by applicable federal or state civil rights statutes or local
ordinances.” Since then, the court observed, the Virginia Supreme Court has concluded that this
provision manifests the General Assembly’s intent to limit actions based on violations of policies
reflected in the VHRA to applicable statutory causes of actions and remedies. Thus, a plaintiff
cannot maintain a common law cause of action for an alleged violation of policy stated in the
VHRA, because allowing her to do so would circumvent the limiting effect of the provision’s
language. In plaintiff’s case, her allegations that she was discharged because of her gender and
in retaliation for her discrimination complaints clearly fell within public policies reflected in the
VHRA. As a result, plaintiff cannot maintain a separate common law cause of action for
wrongful discharge.
Jafari v. Old Dominion Transit Mgmt. Co., 2008 U.S. Dist. LEXIS 97037 (E.D. Va. 2008) –
Federal statutes do not provide a permissible basis for a Virginia state public policy claim.
Overview. While working for defendant, plaintiff raised a concern that he was not being
compensated according to a published compensation plan. Defendant allegedly told plaintiff that
the issue would be addressed at his next evaluation but, following the evaluation, plaintiff’s
supervisor recommended a salary increase below the range for which plaintiff was eligible.
Plaintiff raised further concerns regarding his wages, including a claim that he was not paid for
on-call time or for overtime. Separately, complaints arose about plaintiff’s performance and
defendant later terminated plaintiff because it claimed his skills had diminished. Plaintiff filed
suit against defendant alleging, among other things, that his termination violated Virginia public
policy based on defendant’s alleged violations of ERISA and the Fair Labor Standards Act.
Held. The court held that plaintiff failed to properly allege a violation of state public policy
under the seminal case of Bowman v. State Bank of Keysville, 229 Va. 534 (1985). The court
noted that, as a threshold matter, a plaintiff attempting to assert a Bowman claim for wrongful
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Fourth Circuit
discharge must identify a Virginia statute that the employer violated when it terminated the
plaintiff. Federal statutes do not provide a permissible basis for a Bowman claim and, since
plaintiff did not identify any Virginia statute that defendant violated when it terminated his
employment, he did not have a public policy cause of action.
Jordan v. Town of Front Royal, 2008 U.S. Dist. LEXIS 46533 (W.D. Va. 2008) – Statutes
must create a right for plaintiff or explicitly express a public policy for a class of members
that includes plaintiff.
Overview. Jordan served as the town’s planning director and was responsible for providing
guidance on planning and zoning applications for land use. After Front Royal terminated her,
Jordan brought suit claiming that Front Royal discriminated against her on account of her race
and gender, retaliated against her because of discrimination complaints, and wrongfully
terminated her in violation of Virginia public policy. She based her public policy claims on her
alleged refusal to submit to pressure from the town to give preferential treatment to selected
individuals, which she claimed to be a violation of the town’s statutorily-imposed duty to ensure
that zoning ordinances were properly and legally enforced to protect the health, safety, and
welfare of the town’s citizens. Defendant moved to dismiss the wrongful termination claim.
Held. The court granted defendant’s motion to dismiss. The court noted that the Supreme Court
of Virginia has emphasized the narrowness of the public policy cause of action. Thus, while all
Virginia statutes reflect public policy to some extent, a termination in violation of a statute’s
policy does not automatically give rise to a common law cause of action for wrongful discharge.
The court further observed that the Supreme Court of Virginia has found only three
circumstances where claims under the public policy exception are validly brought: (1) when an
employer violates a policy enabling the exercise of the employee’s statutorily created right, (2)
when an employer violates a public policy that is explicitly expressed in a statute and the
employee was a member of the class meant to be protected by the public policy, and (3) when an
employer terminates an employee for refusing to commit a criminal act. Reviewing the statutes
cited by plaintiff, the court concluded that the statutes neither created a statutory right for
plaintiff nor explicitly stated a public policy protecting a class of people that included plaintiff.
The court declined to find that broad generalizations in Virginia statutes furthered public policy
in the manner that plaintiff argued because doing so would permit the public policy exception to
at-will employment to swallow the rule entirely.
WEST VIRGINIA
Wallace v. Crossroads Hospitality Co., 2006 U.S. Dist. LEXIS 22774 (S.D.W.V. 2006) – “Bald
statements” of public policy are insufficient to support a wrongful discharge claim.
Overview. Plaintiff alleged that he was sexually harassed and subsequently terminated from his
position at a business owned by defendant. He filed suit against defendant and asserted multiple
causes of action, including a claim for wrongful termination in violation of public policy. That
claim stated in its entirety: “The acts of the Defendant violate West Virginia Public Policy.”
Defendant moved to dismiss the public policy claim.
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Fourth Circuit
Held. The court held that plaintiff’s “bald statement” of public policy failed to state a cause of
action under West Virginia’s public policy exception, as first recognized in Harless v. First
National Bank in Fairmont, 162 W. Va. 116 (1978). Harless and its progeny provide that an
employer may be liable for a discharge if the employer’s motivation for the discharge
contravenes some substantial public policy. The term “substantial public policy” inherently
includes the principle that the policy will provide specific guidance to a reasonable person, and a
plaintiff who pleads a public policy cause of action must reference specific facts identifying the
event or policy upon which plaintiff relies. Since the plaintiff in Wallace cited no authority of
any kind to support his public policy claim and made only a general and unsupported statement
of a claim, he did not sufficiently plead a public policy claim. The court therefore granted
defendant’s motion to dismiss.
Talley v. Caplan Industries, Inc., 2007 U.S. Dist. LEXIS 13191 (S.D.W.V. 2007) - West
Virginia Human Rights Act precludes the right to pursue a Harless claim based on conduct
that violates the act.
Overview. Plaintiff served as a territory manager for defendant and, despite his contention that
he satisfied all of the conditions of his employment, he was ultimately terminated after his
director indicated that “he was too old for his position.” Plaintiff filed suit against defendant
alleging age discrimination under the West Virginia Human Rights Act and a public policy claim
pursuant to Harless, supra, arising out of a claimed violation of a state policy protecting “those
in an inferior position as a result of age.” Defendant moved to dismiss the public policy claim
on grounds that courts “have uniformly held that where a statutory scheme provides both a
public policy and a cause of action for violation of that policy, a Harless-type action may not be
substituted for the statutory cause of action.”
Held. The court agreed with defendant’s statement of the law and cited numerous cases for the
principle that pursuing a claim under the West Virginia Human Rights Act precludes the right to
pursue a Harless claim based on conduct that violates the Act. A plaintiff is limited to the
remedy afforded under the West Virginia Human Rights Act and cannot add the tort-based
public policy action as well. As plaintiff did not argue to the contrary, the court granted
defendant’s motion to dismiss the public policy count.
Harshbarger v. CSX Transp., Inc., 478 F. Supp. 2d 890 (S.D.W.V. 2006) – A company’s
internal code of conduct and other policies do not provide sufficient basis for bringing a
public policy claim for wrongful termination.
Overview. Plaintiff worked for defendant in its Risk Management Department. During the
course of his employment, he was allegedly harassed and intimidated by his supervisor. When he
complained, he was assured that he would not be fired or retaliated against for documenting his
complaints. Later, plaintiff was investigated for alleged misconduct and was fired. He filed suit
against defendant and claimed that his supervisor fabricated misconduct allegations against him
in retaliation for his internal harassment complaints. Plaintiff asserted that such action violated
defendant’s Code of Ethics and the verbal assurances he received from defendant. His lawsuit
therefore included a cause of action claiming that defendant violated West Virginia public policy
when it terminated him based on his reasonable reliance on a business policy prohibiting
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Fourth Circuit
retaliation against employees who report harassment. Defendant moved to dismiss the public
policy claim.
Held. The court sustained defendant’s argument that (1) plaintiff failed to identify any clear
mandate of public policy that was violated and (2) an alleged failure to follow an internal
business policy is not the equivalent of violating a state public policy. The court noted that, for
purposes of determining whether a retaliatory discharge has occurred in West Virginia, courts
look to established precepts in the state’s constitution, legislative enactments, legislatively
approved regulations, and judicial opinions to identify sources of public policy. In addition, the
court observed that prior decisions have held that courts should proceed cautiously if called upon
to declare public policy absent some prior legislative or judicial expression on the subject. Since
plaintiff conceded that his public policy claim was not enumerated in a recognized source, and
since the court disagreed with plaintiff’s contention that the West Virginia Human Rights Act
created a general public policy against harassment in the workplace (as opposed to certain forms
of harassment), the court found that plaintiff failed to allege a viable claim that defendant
violated public policy by failing to comply with its own internal policies. The court therefore
granted defendant’s motion to dismiss the public policy claim.
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Fifth Circuit
TEXAS
The Ed Rachal Foundation v. D’Unger, 207 S.W.3d 330 (Texas 2006) - The public policy
exception to at-will employment elucidated in Sabine Pilot only extends to those who are
asked to commit a crime, not to those who are asked not to report a crime.
Overview. Claude D’Unger was an officer and director of the Ed Rachal Foundation, a charity
that owns a ranch used for wildlife and farming research studies. D’Unger was concerned that
migrant workers on the ranch were being harassed by Ed Dubose. D’Unger reported his concern
to Paul Altheide, the foundation’s CEO, and was told “to drop it.” D’Unger then read a
foundation incident report which stated that Dubose had apprehended three Mexican nationals
and turned them over to Border Patrol. When D’Unger contacted Border Patrol, they had no
record of the incident. D’Unger then attempted to contact various government officials on the
matter. After learning of D’Unger’s actions, Altheide suspended and then fired D’Unger.
D’Unger filed suit for breach of contract and wrongful termination, and against Altheide for
tortious interference. Shortly after D’Unger filed suit, the Border Patrol produced evidence
showing nothing improper had happened and that the Mexican nationals had been safely turned
over to Border Patrol. D’Unger alleged that his termination fell under the narrow public policy
exception espoused in Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 73 (Texas 1985), which
made it unlawful to fire an employee for failing to commit an illegal act.
Held. The court held that the Sabine Pilot exception only protects those employees who are
asked to commit a crime, not those employees who are told not to report a crime. The court did
not determine whether Texas law provides a public policy exception for employees who enquire
into whether their actions would constitute an illegal act.
Commentary. D’Unger makes clear that the Sabine Pilot exception under Texas law allows for
only a very limited public policy exception to the at-will employment doctrine. The only public
policy exception to the employment at-will doctrine recognized under Texas law is that an
employer may not terminate an employee for refusing or failing to commit illegal or illicit acts.
This exception has not changed since its inception in 1985. “Sabine Pilot protects employees
who are asked to commit a crime, not those who are asked not to report one. If failing to report a
crime were itself a crime, then almost all whistleblowers could claim the Sabine Pilot
exception.” D’Unger, 207 S.W.3d at 332.
The court did not resolve the issue of whether the exception articulated in Johnston v. Del Mar
Distrib. Co., 776 S.W.2d 768 (Tex. App. - Corpus Christi 1989, writ denied), holding that there
is a public policy exception for employees who contact law enforcement agencies to find out
whether something they are being asked to do is illegal is the proper law of Texas.
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Fifth Circuit
LOUISIANA
Quebedeaux v. Dow Chem. Co., 820 So. 2d 542 (La. 2002) - The employment at-will doctrine
bars vicarious liability for damages arising out of termination of an employee.
Overview. Julice Jude Quebedeaux and John Dandridge were employed by Dow Chemical
Company as operators in the plastic extrusion area. Quebedeaux and Dandridge had a heated
verbal argument over Quebedeaux’s delay in transferring the processed plastic pellets from one
storage unit to another. Dandridge then went over to Quebedeaux and grabbed him by the neck,
causing Quebedeaux to fall to the floor. Quebedeaux allegedly sustained scratches to his neck
and injuries to his elbow, hip, and leg, though none were severe enough to require medical
attention. The two men went before an Employee Review Committee, which recommended
termination of both employees. Dow then terminated both men.
Quebedeaux and his wife, Wendy Quebedeaux, filed suit against Dandridge and Dow, seeking
recovery for (1) physical pain and suffering; (2) mental anguish resulting from the altercation
and subsequent termination; (3) past lost wages; (4) future lost wages, and (5) loss of consortium
by Mrs. Quebedeaux due to Dandridge’s intentional misconduct. The Quebedeauxs alleged Dow
was vicariously liable for the damages caused by Dandridge, through the legal doctrine of
respondeat superior.
After a two day trial, a jury rendered a verdict in favor of the Quebedeauxs, finding that
Dandridge committed a battery upon Mr. Quebedeaux and that Dow was vicariously liable for
the intentional tort. The court of appeal granted Dow’s writ application to address a perceived
conflict between the employment at-will doctrine and an employee’s right to sue his employer in
tort for intentional acts committed by his co-employee while in the course and scope of
employment.
Held. The appellate court held that the employment at-will doctrine barred vicarious liability for
damages arising out of termination of an employee under the circumstances of the case.
According to the court, “victim compensation, which is one of the primary policies supporting
vicarious liability, must give way to the employment at-will doctrine, which furthers broader
societal policies, such as maintaining a free and efficient flow of human resources.” If the court
were to hold otherwise, the court noted, “employers would be placed in the precarious position
of having to retain combatant employees following workplace fights to avoid vicarious liability
for any damages arising out of termination . . . a result [that] would unfairly hamstring employers
from making sensible business decisions.” Accordingly, the court reversed and set aside the
lower courts’ judgments pertaining to the Quebedeauxs’ damage awards.
Sanchez v. Ga. Gulf Corp., 860 So. 2d 277 (La. App. 1 Cir. 2003) – Even though a statute
granted the right to bring a claim for “defamation of character, libel, slander, or damage to
reputation or privacy,” it did not create a public policy exception to at-will employment if
an employer violated it.
Overview. Danny Sanchez, an at-will employee, took a drug test and tested positive for illegal
substances. He was then terminated from his employment. Sanchez brought an action against
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Georgia Gulf Corp., alleging that Georgia Gulf had breached its statutory duties to him by
terminating him for a positive drug test without allowing him to provide information about
prescription medication he was taking that could result in a false positive test result. Sanchez
sought damages for physical and mental pain and suffering, loss of income, loss of reputation,
and medical expenses. Sanchez alleged that because Georgia Gulf did not follow the statutory
requirements of the Louisiana Revised Code regarding drug testing and the procedure that must
be followed after a positive drug test, a claim for wrongful discharge existed.
Held. The court held that while La. Rev. Statute § 49:1012 allowed for a claim of defamation of
character, libel, slander, or damage to reputation or privacy, it didn’t address a discharged
employee’s right to claim wrongful discharge. Id. at 283. Accordingly, it did not give Sanchez
the right to bring an action for wrongful discharge against his employer.
Commentary. With Sanchez, the Louisiana Supreme Court confirmed that unless there is at issue
a right explicitly granted through either state or federal regulation, Louisiana does not recognize
public policy exception to at-will employment.
MISSISSIPPI
DeCarlo v. Bonus Stores, Inc., 989 So. 2d 351 (Miss. 2008) - Mississippi only allows a public
policy exception for employment at-will when an employee is terminated for refusing to
commit an illegal act or for reporting the criminal acts of an employer or co-employee that
relate to the employer’s business.
Overview. Lewis DeCarlo, an at-will employee, was employed as the vice president of store
operations for Bonus Stores, Inc. (“Bonus”). Jimmy Schafer was the president and chief
executive officer of Bonus. Schafer had also previously started, while employed at Bonus Stores
of Florida, Inc. (“Bonus Florida”), Retail Services, Inc. (“Retail Services”). Retail Services
bought old fixtures from Wal-Mart and then refurbished and sold them to Bonus Florida and
later to Bonus. Schafer held fifty percent interest in Retail Services.
Schafer was concerned about Bonus’ profitability. DeCarlo began an investigation to determine
the cause of disappointing profits. When DeCarlo started his investigation, he was not aware of
the Retail Service-Bonus relationship and Schafer’s involvement in the relationship. During his
investigation, DeCarlo learned of the Retail Service-Bonus relationship and Schafer’s connection
with Retail Services. DeCarlo also learned that Retail Services may have been billing Bonus for
fixtures that were never delivered. DeCarlo informed Guy Heyl, Bonus’s chief financial officer
and secretary to the board of directors and was told to “lay low” while the matter was
investigated. Schafer, at the order of the board of directors, subsequently terminated DeCarlo.
DeCarlo then brought suit in Federal court. Unable to answer certain questions regarding state
law, the Fifth Circuit Court of Appeals certified two questions to the Louisiana Supreme Court:
(1) ”Do the laws of Mississippi permit a retaliatory discharge claim for discharge in retaliation
for reporting a co-employee’s illegal acts that relate to the employer’s business,” and (2) ”Do the
laws of Mississippi allow for individual liability for the tort of retaliatory discharge even if the
individual defendant’s participation in the discharge was in the course and scope of his
employment?”
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Held. Mississippi law allows for a public policy exception to at-will employment for retaliatory
discharge when an employee is terminated for refusing to commit a criminal act or for the
reporting of employer or co-employee criminal acts. The co-employee illegal act exception,
however, only applies when the co-employee’s illegal act is related to the business of the
employer. The exception also only allows suit against the employer and does not allow for
“individual liability for the tort of retaliatory discharge even if the individual defendant’s
participation in the discharge was in the course and scope of the individual defendant’s
employment.” Id. at 359.
Commentary. This case is an extension of McArn v. Allied Bruce-Terminex Company, Inc., 626
So. 2d 603 (Miss. 1993), which found that “(1) an employee who refuses to participate in an
illegal act as in Laws shall not be barred by the common law rule of employment at-will from
bringing an action in tort for damages against his employer; (2) an employee who is discharged
for reporting illegal acts of his employer to the employer or anyone else is not barred by the
employment at-will doctrine from bringing action in tort for damages against his employer.” Id.
at 607. DeCarlo answers the question left unanswered in McArn regarding whether there exists
an independent tort against the employer in relation to a retaliatory discharge, finding that no
such claim existed.
Jones v. Fluor Daniel Servs. Corp., 959 So. 2d 10 (Miss. 2007) - In order for the public
policy exception to at-will employment to apply, the act reported must be illegal and relate
to the employer’s business.
Overview. Employees of Fluor Daniel Services Corp. alleged that after reporting that a
supervisor named Rudy Amaro had used a racial slur during a morning meeting, they were
terminated. The employees also alleged that they were discharged for reporting the illegal
activities of Fluor Daniel. The illegal activities they allege that Amaro violated were disturbance
of the peace and provoking a breach of the peace.
Held. The court held that the at-will exception created in McArn only applies when the illegal
act has something to do with the business itself. The court also found that there was no evidence
that the conduct was reported because it was illegal, and accordingly, the situation was not the
type that would fall into the public policy exception for termination of an at-will employee.
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KENTUCKY
Grzyb v. Evans, 700 S.W.2d 399 (Ky. 1985) – No exception to employment at-will doctrine
when adequate statutory remedy exists.
Overview. Evans brought suit, alleging that his discharge constituted sex discrimination and a
breach of his employer’s implied duty to “exercise good faith and fair dealing in terminating an
at-will employee.” The court recognized that an employer may generally “discharge his at-will
employee for good cause, for no cause, or for a cause that some might view as morally
indefensible.” To make sure that exceptions to the employment at-will doctrine are clearly
defined, the court identified the following three elements as necessary to establish any judicial
exceptions to the employment at-will doctrine: “(1) The discharge must be contrary to a
fundamental well-defined public policy as evidenced by existing law. (2) That policy must be
evidenced by a constitutional or statutory provision. (3) The decision of whether the public
policy asserted meets these criteria is a question of law for the court to decide, not a question of
fact.”
Held. The Kentucky Supreme Court affirmed the trial court’s dismissal of the complaint as it
failed to state a cause of action. The court refused to recognize a common law cause of action on
behalf of an employee whose discharge had been motivated by sex because adequate statutory
remedies existed. The court emphasized the narrowness of Kentucky’s version of the common
law doctrine, holding that it applies only in situations involving an employee’s discharge in
retaliation for his or her refusal to violate the law or in retaliation for his or her exercise of a
statutory right.
Benningfield v. Pettit Environmental, Inc., 183 S.W.3d 567 (Ky. App. 2006) – Common law
wrongful discharge claim preempted because statute specifies the remedy.
Overview. Benningfield alleged, among other things, that he was wrongfully discharged by his
employer when he notified the Occupational Safety and Health Administration (OSHA) about
his employer’s failure to provide the appropriate training. Specifically, Benningfield asserted
that he was discharged in violation of the well-defined public policy in KRS 338.121. This
statute states in pertinent part that no one shall discharge or discriminate against an employee
that files a complaint or institutes a proceeding under the chapter. The statute further provides
that employees who have been discriminated against in violation of the subsection may file a
complaint with the state commissioner. In other words, the statute defines the wrongful act and
specifies the civil remedy available for its violation.
Held. Trial court properly dismissed employee’s wrongful discharge claim. Generally, an
employee has a cause of action for wrongful discharge when the discharge is “contrary to a
fundamental and well-defined public policy as evidenced by existing law.” This exception,
however, “only applies when the statute creating the public policy exception does not provide a
structure for pursuing a claim.” Because KRS 338.121 establishes both the unlawful act and the
civil remedy available to aggrieved parties, Benningfield’s wrongful discharge claim must be
dismissed.
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Follett v. Gateway Regional Health System, 229 S.W.3d 925 (Ky. App. 2007) – Genuine
issues of fact exist as to whether employee was wrongfully discharged for exercising her
statutorily protected rights.
Overview. Follett was terminated for allegedly giving raises to nurses without the appropriate
authority. In response, Follett brought suit, claiming that she was in fact wrongfully discharged
for reporting billing irregularities and suspicions that an emergency room doctor was under the
influence while on duty. She relied in part on KRS 205.8451, which requires individuals to
report certain information to the state Medicaid Fraud Control Unit. This statute also prohibits
employers from discriminating or retaliating against individuals who make such reports. Follett
based her wrongful discharge claim upon an exception to the employment at-will doctrine – i.e.,
she was discharged for exercising rights conferred by well-established legislative enactment. In
a non-civil rights wrongful discharge action, the plaintiff must show at a minimum that she was
engaged in a statutorily protected activity, that she was discharged, and that “the protected
activity was a substantial and motivating factor but for which the employee would not have been
discharged.”
Held. The appellate court vacated the trial court’s order granting summary judgment in favor of
the employer. A jury could reasonably infer that Follett’s involvement in reporting the billing
irregularities and the issue with the physician were the substantial and motivating factors but for
which she would not have been discharged. Thus, genuine issues of material fact existed as to
whether she was wrongfully discharged.
TENNESSEE
Conley v. Yellow Freight Sys., Inc., 521 F. Supp. 2d 713 (E.D. Tenn. 2007) – Employee must
prove employed at-will to proceed with common law retaliatory discharge claim.
Overview. Conley was employed by the defendant and discharged for allegedly failing to
properly sign in and out. His discharge, however, came after he sent a letter to management
stating that he would not compromise safety in order to be more efficient. Conley sent this letter
after feeling pressured by management to keep the “wheels rolling” no matter what it took.
Held. Conley’s retaliatory discharge claims under the TPPA and common law were timely
because they were filed within one year from the date of the discriminatory act. Conley
presented sufficient evidence of a prima facie case under the TPPA. The court, however,
dismissed his common law claim because he could not establish that he was employed at-will.
Franklin v. Swift Transp. Co., 210 S.W.3d 521 (Tenn. Ct. App. 2006) – Action resulting in
discharge must implicate important public policy concerns.
Overview. Franklin filed suit against trucking company employer alleging statutory and
common law retaliatory discharge – i.e., he was terminated due to his refusal to violate a
Tennessee Department of Safety regulation that required the truck driver to carry an original
“cab card” showing registration. Because the original cab card could not be found, the employer
gave Franklin a copy or the cab card and instructed him to drive the truck. When Franklin
refused to drive the truck with the copy of the cab card, he was terminated. The Tennessee
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Public Protection Act (TPPA) codifies the common law cause of action for retaliatory discharge.
See Tenn. Code Ann. 50-1-304. To prevail under the TPPA, the plaintiff must establish “(1) his
status as an employee of the defendant employer; (2) his refusal to participate in, or remain silent
about, “illegal activities” as defined under the Act; (3) his termination; and (4) an exclusive
causal relationship between his refusal to participate in or remain silent about illegal activities
and his termination.” Id. The elements required to prove a common law retaliatory discharge
claim are similar: the plaintiff must establish “(1) that an employment at-will relationship
existed; (2) that he was discharged; (3) that the reason for his discharge was that he attempted to
exercise a statutory or constitutional right, or for any other reason which violates a clear public
policy evidenced by an unambiguous constitutional, statutory, or regulatory provision; and
(4) that a substantial factor in the employer’s decision to discharge him was his exercise of
protected rights or his compliance with clear public policy.” Under both the TPPA and common
law, the “illegal activity” or violation by the employer must implicate important public policy
concerns.
Held. The appellate court reversed the trial court and held that Franklin’s refusal to perform the
assigned work based on the regulation requiring the original cab card, as opposed to a
photocopy, did not further important public policy concerns, and therefore would not support a
claim of retaliatory discharge under the TPPA or common law.
Clanton v. Cain-Sloan Co., 677 S.W.2d 441 (Tenn. 1984) – Discharge in retaliation for
employee’s filing of workers’ compensation claim is public policy exception to employment
at-will doctrine.
Overview. Clanton was injured during the course of her employment. After submitting a
workers’ compensation claim, she was discharged. Under long-established Tennessee law, “an
employee at-will can be discharged without breach of contract for good cause, bad cause or no
cause at all.” The trial court dismissed the employee’s claim, finding no exception to the
employment at-will doctrine. The court of appeals affirmed.
Held. The Tennessee Supreme Court recognized a public policy cause of action exception to the
employment at-will doctrine – e.g. when employees are discharged in retaliation for their filing
of workers’ compensation claims. This cause of action is necessary to enforce the duty of the
employer, to secure the rights of the employee, and to carry out the intent of the legislature.
Retaliatory discharge circumvents the legislative scheme of workers’ compensation.
OHIO
Leininger v. Pioneer Nat’l Latex, 875 N.E.2d 36 (Ohio 2007) – No cause of action for
wrongful discharge in violation of public policy lies where sole source of policy is statute
containing adequate remedies.
Overview. Employee, 60 years of age, was terminated by employer from her long-time position
as a human resources administrator and was replaced by a 21-year old. Employee brought a
single claim for wrongful discharge in violation of public policy; trial court granted summary
judgment in favor of employer; District Court of Appeals reversed, citing Livingston v. Hillside
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Rehab. Hosp., 680 N.E.2d 1220 (Ohio 1997), a case specifically dealing with wrongful discharge
in violation of Ohio’s public policy against age discrimination. Employer appealed to Ohio
Supreme Court.
Held. In a 6-1 decision, the court found that that a common-law tort claim for wrongful
discharge based on Ohio’s public policy against age discrimination does not exist, because the
remedies in Ohio’s anti-age discrimination statutes provide complete relief for a statutory claim
for age discrimination. To reach this decision, the court had to distinguish both Livingston and
Collins, supra. First, the court reasoned, Livingston considered an earlier version of Ohio’s age
discrimination statute that did not contain a full range of civil remedies, so it was not controlling.
Second, Collins involved a case where there were multiple sources of law establishing the public
policy at issue (sexual harassment) - not, as here, only a single statutory source. The court
analyzed Ohio’s anti-age discrimination statute and found that its available remedies were
comprehensive enough to preclude the creation of a new, unnecessary tort. The District Court of
Appeals was reversed, and the case was dismissed.
Bickers v. Western & Southern Life Ins. Co., 879 N.E.2d 201 (Ohio 2007) – Ohio workers’
compensation act is exclusive remedy for employees claiming termination in violation of
rights provided by that act.
Overview. Employee suffered an on the job injury, and successfully filed a claim for workers’
compensation benefits. Following her injury, the employee experienced periods of inability to
work, leading to her eventual termination for absenteeism. The employee was receiving TTD
benefits at the time of her termination. Employee filed a claim for wrongful discharge in
violation of public policy, citing Coolidge, supra; the trial court granted employer’s motion to
dismiss; District Court of appeals reversed; employer appealed to Supreme Court of Ohio.
Held. In a 5-2 decision, the court limited the effect of its ruling in Coolidge to the facts of that
particular case, holding that a claim of wrongful discharge in violation of public policy based on
Ohio’s policy of protecting employees’ right to enjoy TTD benefits could only be brought where
the employee was protected by the “good and just cause” standard articulated in R.C. 3319.16.
The court based its decision, in part, on the firestorm of criticism the court had received from
commentators as a result of the opinion. The court went on to find that the Ohio Workers’
Compensation Act was comprehensive enough to constitute the exclusive source of remedies for
violations of that Act.
Commentary. Curiously, the dissent in Bickers was authored by Chief Justice Moyer, who had
dissented from the Greeley case giving rise to public policy discharge claims in Ohio. Moyer’s
dissent was based on stare decisis grounds, arguing, inter alia, that the court could not escape so
easily from Coolidge. Taken together with Leininger and Wiles, supra, Bickers suggests that no
action for wrongful discharge in violation of public policy will be recognized where a
comprehensive statutory scheme exists to address conduct in contravention of that public policy.
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Greeley v. Miami Valley Maintenance Contractors, Inc., 551 N.E.2d 981 (Ohio 1990) – Public
policy warrants an exception to the employment at-will doctrine when an employee is
discharged or disciplined for a reason prohibited by statute.
Overview. Employer terminated employee after state court ordered employer to garnish
employee’s wages, consistent with state law and child support order. Employee filed suit,
claiming termination violated public policy explicitly enunciated by R.C. 3113.213 (D). Trial
court granted employer’s motion to dismiss for failure to state a claim; intermediate appellate
court upheld dismissal; case appealed to Supreme Court of Ohio. Employer argued that relevant
child support statutes provided for a fine that could be levied against employees, and that this
fine served as an exclusive remedy. Employer argued further that neither R.C. 3113.213 (d) nor
any other statute provided for a private cause of action against an employer vis-à-vis its
employee. Employee argued that Ohio recognized cause of action for wrongful termination in
violation of public policy, as articulated by statute.
Held. In a 4-3 decision, the Supreme Court of Ohio held that public policy warrants an
exception to the employment at-will doctrine when an employee is discharged or disciplined for
a reason which is prohibited by statute, and recognized a new tort - wrongful discharge in
violation of public policy. The court rejected the employer’s argument that the Ohio General
Assembly intended the relatively minor fine levied on employers who violate child support
statutes to be an exclusive remedy, reasoning that employers could easily “buy” their way out of
a court order and frustrate the interstate child support structure if no other liability was possible.
Accordingly, the court reversed the District Court of Appeal and remanded the case to the trial
court for further proceedings.
Commentary. In Greeley, Ohio joined the “great number of states” that recognized a public
policy exception to the employment at-will doctrine. The court had earlier hinted at the
possibility of recognizing this tort in Phung v. Waste Management, Inc., 491 N.E.2d 1114 (Ohio
1986). While the Greeley court had only been asked to decide whether a public policy exception
existed in the instance of a clear statutory expression of public policy, the court also suggested
that other bases could serve as grounds for its new cause of action, were they of “equally serious
import as the violation of a statute.” The three dissenters, led by now-Chief Justice Moyer,
argued that the court had usurped the constitutional role of the legislature by creating out of
whole cloth a remedy the General Assembly had not seen fit to include.
MICHIGAN
Silberstein v. Pro-Golf of America, Inc., 750 N.W.2d 615 (Mich. App. 2008) – Violation of
public policy need only be “a determinative factor” in the discharge, not the “sole” factor.
Overview. Employee is terminated; alleges termination was caused by his refusal to make
certain accounting representations in violation of securities and franchise laws and regulations.
Employer claims that termination was caused by employee’s poor performance, work force
reduction, and after-acquired evidence of misconduct, including evidence of pornography, sexual
harassment, and kickbacks from customers. At trial, court instructs jury that employee was
required to prove that the employee’s refusal to violate the law was simply one factor leading to
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his termination. Employee received a jury verdict; employer appealed denial of post-trial
motions regarding jury instructions.
Held. The Michigan Court of Appeals panel unanimously upheld the trial court’s decision to
instruct the jury that the prohibited motivation for termination (here, retaliation for failing to
violate the law) need only be “a determinative factor” in the employer’s decision-making
process, and not the sole or exclusive factor. In reaching its decision, the court looked at the
model jury instructions for whistleblower and civil rights claims.
Lair v. Ortho Biotech, 2006 WL 397960 (Mich. App., Feb. 21, 2006) – Plaintiff’s failure to
accurately allege violation of law is fatal to employee’s claim.
Overview. Employee, a pharmaceutical sales representative, alleged that her employer required
her to promote the drug Doxil to doctors for the treatment of breast cancer – even though Doxil
had not been approved by the U.S. Food & Drug Administration for this use. Employee claimed
that she was unlawfully terminated in retaliation for refusing to promote Doxil for this purpose,
and that this termination violated FDA provisions prohibiting the sale or promotion of a drug for
a non-approved use. Employee sued, claiming she was wrongfully discharged in violation of
public policy; the trial court dismissed the employee’s complaint for failing to state a valid claim.
The trial court concluded that the FDA did not, in fact, prohibit the promotion of a drug for a
non-approved use. Employee appealed to the Michigan Court of Appeals.
Held. The Michigan Court of Appeals panel unanimously upheld the trial court’s determination
that the employee had failed to state a claim on which relief could be granted. The court found
that the trial court had correctly determined that the employee’s complaint had not properly
alleged a violation of law, as required by Suchodolski, supra, and that permitting an amendment
of the pleading would be futile.
Dudewicz v. Norris-Schmidt, Inc., 503 N.W.2d 645 (Mich. 1993) – The remedies provided by
statute for violation of a right having no common law counterpart preempt wrongful
discharge claim.
Overview. Employee was attacked by a co-worker; after filing a criminal complaint against the
co-worker, the employee was told he would be fired if he did not dismiss the criminal
complaint. When the employee refused, he was terminated. Employee sued, alleging a claim
under the Michigan Whistleblower Protection Act (“WPA”) and a claim for wrongful discharge
in violation of public policy. The trial court granted summary judgment in favor of the employer
on the public policy claim, and granted directed verdict in favor of the employer on the WPA
claim. The employee appealed to the Court of Appeals, who reversed the trial court on both
counts; the employer then appealed to the Supreme Court of Michigan.
Held. In a 6-1 decision, the court held that a claim for wrongful discharge in violation of public
policy claim is only sustainable where there also is not an applicable statutory prohibition against
discharge in retaliation for the conduct at issue. Here, the WPA provided the employee with an
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adequate - and exclusive - remedy at law, so no public policy claim could be brought. The court
reversed the Court of Appeals, and dismissed the claim.
Commentary. Subsequent Michigan decisions have interpreted Dudewicz to implicitly abrogate
the first category of claims recognized by Suchodolski, supra. See Vagts v. Perry Drug Stores,
Inc., 516 N.W.2d 102 (Mich. App. 1994).
Suchodolski v. Michigan Consol. Gas Co., 316 N.W.2d 710 (Mich. 1982) – Supreme Court of
Michigan recognizes claim for wrongful discharge in violation of public policy in limited
instances.
Overview. Employee terminated by employer, a public utility, after complaining about
improprieties in business practices that negative affected the utility’s customers. Employee filed
suit, alleging, inter alia, that he was terminated in retaliation for his complaints, which
constituted a wrongful discharge in violation of public policy. Trial court granted summary
judgment in favor of employer; Court of Appeals affirmed as to public policy count on the basis
that termination failed to implicate a clear mandate of public policy. Employee appealed Court
of Appeals’ affirmance of summary judgment as to public policy count to Supreme Court of
Michigan.
Held. In a unanimous decision, the court recognized an exception to the employment at-will
doctrine where an employee was terminated on grounds contrary to public policy. In particular,
the court found that this exception applied where (1) legislation explicitly prohibits adverse
employment actions taken against employees who act in accordance with a statutory right or
duty; (2) an employee was terminated for failing or refusing to violate a law in the course of their
employment; and (3) an employee was terminated in retaliation for exercising his or her right
conferred by a well-established legislative enactment (e.g., workers’ compensation
benefits). The court, however, found that the employee’s claim involved only a corporate
management dispute, and lacked the kind of violation of a clearly mandated public policy that
would support an action for retaliatory discharge. The court affirmed the Court of Appeals, and
dismissed the claim.
Commentary. Suchodolski is the seminal Supreme Court of Michigan case on wrongful
discharge in violation of public policy, but it was not the first Michigan appellate case to
recognize the claim. Sventko v. Kroger Co., 245 N.W.2d 151 (Mich. App. 1976) was the second
case in the nation to recognize such a claim in the realm of workers’ compensation retaliatory
discharge. Likewise, Trombetta v. Detroit, T&I R. Co., 265 N.W.2d 385 (Mich. App. 1978)
recognized a claim for wrongful termination where an employee is discharged for refusing to
falsify forms required to be filed with the state.
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Seventh Circuit
ILLINOIS
Generally, under Illinois law, an employer may terminate an employee at-will—in other words,
“at any time for any or no cause.” Palmateer v. Int’l Harvester Co., 421 N.E.2d 876, 878 (Ill.
1981) (citation omitted). Either party to an employment agreement with an indefinite term may
terminate the agreement at-will. See, e.g., Cress v. Recreation Svcs., 795 N.E.2d 817, 839 (Ill.
App. Ct. 2003). Illinois recognizes a number of statutory and common law exceptions to this
general rule. Illinois courts recognize three main common law exceptions to the general rule of
employment at-will: (1) the public policy exception, Palmateer 421 N.E.2d at 878; (2) employee
handbooks that create an implied contract, Duldulao v. Saint Mary of Nazareth Hosp. Ctr.,
505 N.E.2d 314 (1987); and (3) oral employment contracts that do not violate the statute of
frauds, McInereney v. Charter Golf, Inc., 680 N.E.2d 1347 (Ill. 1997).
Public Policy Exception
Concerned with the “harsh” effect of the employment at-will rule on employees, and its
propensity to undermine public policy, Illinois joined other states in recognizing the tort of
retaliatory discharge. Palmateer, 421 N.E.2d at 878. In Palmateer, the Illinois Supreme Court
opined that “unchecked employer power, like unchecked employee power, has been seen to
present a distinct threat to the public policy carefully considered and adopted by society as a
whole.” Id.
Under current Illinois precedent, an employee states a claim for retaliatory discharge by alleging
three elements: “(1) that his employer discharged him; (2) in retaliation for his activities; and
(3) that discharge violates a clear mandate of public policy.” See, e.g., Jandeska v. Prairie Int’l
Trucks, Inc., 893 N.E.2d 673, 675 (Ill. App. Ct. 2008). Generally, Illinois courts allow a claim
of retaliatory discharge under two circumstances: (1) when an employer terminates an employee
for filing a claim for workers’ compensation, and (2) when the employee is discharged for
reporting an employer’s illegal or improper conduct, i.e., “whistle-blowing.” Id. at 676 (citing
Jacobson v. Knepper & Moga, P.C., 706 N.E.2d 491, 493 (Ill. 1998)). While the Illinois
Supreme Court has not offered a precise definition of “a clear mandate of public policy,” it has
noted that “the threshold [for such claims] is high and the circumstances are limited.” Jandeska,
893 N.E.2d at 676 (quoting Chicago Commons Ass’n v. Hancock, 804 N.E.2d 703, 705 (Ill.
2004)).
Jandeska v. Prairie Int’l Trucks, Inc., 893 N.E.2d 673, 675 (Ill. App. Ct. 2008) –
Terminating an auto mechanic for informing customers of improper repairs and false
billing does not violate a clear mandate of public policy.
Overview. The defendant Prairie Int’l Trucks, Inc. (“Prairie”) terminated the plaintiff after the
plaintiff informed various customers that (a) the defendant overcharged them; (b) that the
defendant charged them for repairs that were only necessary because of the defendant’s own
mistakes, and/or (c) that the defendant made repairs incorrectly. In his retaliatory discharge
action, the plaintiff asserted that in light of the Illinois Automotive Repair Act, 80 ILCS
306/80(6), his actions were consistent with a clear mandate of the public policy of Illinois.
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Held. The court disagreed with the plaintiff, affirming the trial court’s dismissal of his
retaliatory discharge claim. Specifically, the court found that the plaintiff’s claim failed because
his termination did not violate a “clear mandate of [Illinois] public policy.” Jandeska, 893
N.E.2d at 676. The court reached this conclusion despite the fact that the Automotive Repair Act
outlaws the practice of charging customers for unnecessary repairs. See id. (quoting 815 ILCS
306/80(6)). The court provided little to explain its holding, other than to emphasize that the
public policy exception is extremely narrow. Whatever the definition of “a clear mandate public
policy” is, the court opined, the plaintiff’s claim fell “substantially short” of it. Id. Though the
plaintiff did not rely on the Automotive Repair Act for his cause of action, the court took the
opportunity to note that the Act does not create a private right of action. Id. at 677.
Daoust v. Abbot Labs, 2007 U.S. Dist. LEXIS 2138, (N.D. Ill. 2007) – Employee discharged
for reporting workplace violence has retaliatory discharge claim under Illinois’s public
policy exception.
Overview. Plaintiff claimed that defendant Abbot Laboratories (“Abbot”) terminated him for
reporting “physically threatening behavior” by a subordinate. Id. at *1. Abbot contended that it
had discharged the plaintiff for “his physical response to a ‘heated argument’ with a co-worker,”
not for reporting his co-worker’s threatening conduct. Just prior to trial, the parties requested
that the court make a preliminary determination as to whether plaintiff’s termination, as alleged,
met the third element or “prong” of a retaliatory discharge claim under the Illinois public policy
exception, i.e., whether his termination violated a clearly mandated public policy.
Held. The court held that the plaintiff’s claim satisfied the third prong of an Illinois retaliatory
discharge action. After considering Illinois constitutional law, statutory law, and common law,
the court concluded that Illinois had a clearly mandated public policy of encouraging employees
to report violence or threats of violence in the workplace. Id. at *12. Specifically, the court
noted first that the Illinois Constitution evinced a general concern “for the safety and well-being
of Illinois citizens.” Id. at * 5. Second, the court pointed to the fact that the Illinois legislature
had enacted several statutes relating to violence in the workplace. Id. at * 6-7. Finally, the court
examined Illinois case law, concluding that Illinois courts have typically been willing to allow
claims of retaliatory discharge where the public policy in question related to the health and safety
of Illinois citizens. Id. at *9, 10 (citing Leweling v. Schandig Corp., 657 N.E.2d 1107 (Ill. App.
Ct. 1995)). Ultimately, the court concluded that “[a]llowing employers to discharge their
employees because they reported an incident of workplace violence would directly contravene
Illinois’ efforts at promoting and protecting violence-free environments.” Id. at *13.
Employee Handbooks
Illinois allows an exception to the employment at-will doctrine based on an implied contract
created by the terms of an employee handbook. See Duldulao, 505 N.E.2d at 318. In Duldulao,
the Illinois Supreme Court explained that the employment at-will doctrine is not a limitation on
the right of employer and employee to contract but, rather, “a rule of construction, mandating
only a presumption which can be overcome by demonstrating that the parties contracted
otherwise.” Id. Thus, “an employee handbook or other policy statement creates enforceable
contractual rights if the traditional requirements for contract formation are present.” Id.
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Specifically, the Duldulao court set forth the following requirements for an employee handbook
to create an enforceable contract:
First, the language of the policy statement must contain a promise
clear enough that an employee would reasonably believe that an
offer has been made. Second, the statement must be disseminated
to the employee in such a manner that the employee is aware of its
contents and reasonably believes it to be an offer. Third, the
employee must accept the offer by commencing or continuing to
work after learning of the policy statement.
Id.; see also Ross v. May Co., 880 N.E.2d 210, 213-14 (Ill App. Ct. 2007). An employer may
protect itself from inadvertently waiving its right to terminate employees at-will by including a
carefully-worded disclaimer in its handbook stating that the handbook “promises nothing and
does not act as a contract.” Ivory v. Specialized Assistance Svcs., 850 N.E.2d 230, 233 (Ill. App.
Ct. 2006). If, however, an employer adds a disclaimer to an existing employee handbook that,
before modification, constituted an enforceable contract, without providing the affected
employees with additional consideration, the disclaimer is ineffective. See Ross, 880 N.E.2d at
216. Continuing employment does not constitute adequate additional consideration. Id. (citing
Doyle v. Holy Cross Hosp., 682 N.E.2d 68 (Ill. 1999)).
Oral Contract/Promissory Estoppel
In McInerney, the Illinois Supreme Court held that the defendant employer’s oral assurance to its
employee created a valid contract. 680 N.E.2d at 1351. In exchange for the employee giving up
a lucrative job offer to work elsewhere, the employer promised the employee lifetime
employment. Id. at 1350. In exchange for giving up its right to terminate the employee at-will,
the employer retained a valuable employee. Id. Under such a circumstance, the court concluded,
where “the employee relinquishes something of value in bargained-for exchange for the
employer’s guarantee of permanent employment, a contract is formed.” Id. at 1351; see also
Robinson v. BDO Seidman, LLP, 854 N.E.2d 767, 770 (Ill. App. Ct. 2006) (following
McInerney).
Ultimately, however, the court found for the employer, holding that the contract was barred by
the statute of frauds. Id. at 1352. The court emphasized the fact that the employer had
compensated the plaintiff for a full year under the contract and, thus, the plaintiff suffered no
injury. Id. at 1352-53. While the plaintiff’s claim in McInerney failed due to the statute of
frauds, an oral employment contract that the parties could perform within a year appears to be
enforceable under Illinois law. Moreover, under certain circumstances, Illinois also recognizes
promissory estoppel as an exception to the employment at-will doctrine. See, e.g., Vajda v.
Arthur Andersen Co., 624 N.E.2d 1343, 1350-51 (Ill. App. Ct. 1993). Promissory estoppel,
however, does not bar the application of the statute of frauds. McInerney, 680 N.E.2d at 1352.
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Statutory Exceptions
The Illinois Human Rights Act (“IHRA”), 775 ILCS § 5/1-101 et seq., prohibits employers from
terminating employees on the basis of race, color, religion, sex, national origin, ancestry, age,
marital status, sexual orientation, unfavorable military discharge, and citizenship. The IHRA
also prohibits employers from terminating employees in retaliation for opposing practices
prohibited by the IHRA, or for filing a charge, testifying, assisting, or participating in an
investigation, proceeding or hearing under the IHRA. 775 ILCS § 5/6-101(A).
Additionally, the Illinois Compiled Statutes contain a number of exceptions to the employment
at-will doctrine. Illinois law prohibits employers from terminating employees for the following
reasons:
•
For filing a complaint under the Safety Inspection and Education Act or the Health and
Safety Act. 820 ILCS § 220/2.2(a).
•
For participating in jury service. 705 ILCS § 305/4.1(b).
•
For taking voting leave. 10 ILCS § 5/17-15.
•
On the basis of their military status or because of a military discharge. 775 ILCS § 5/1102(A).
•
For less than cause if the employee is a qualified military veteran returning to
employment. 330 ILCS § 60/5.
•
For using lawful products (for example, tobacco) on their own time outside of the
employer’s premises. 820 ILCS § 55/5(a).
•
For disclosing a violation of state or federal law. 20 ILCS 415/19c.1(1) (executive
branch personnel code); 740 ILCS § 174/1 (state whistleblower act).
•
For exercising their rights under the workers’ compensation statute. 820 ILCS
§ 305/4(h).
•
For having their wages garnished. 735 ILCS § 5/12.-818,819
•
For filing a legitimate claim for health insurance benefits. 820 ILCS § 45/2.
•
For exercising their rights under the wage payment and collections statute. 820 ILCS
§ 115/14 (c).
INDIANA
Indiana’s employment at-will doctrine permits both employer and employee to terminate an
employment relationship for “a good reason, a bad reason, or no reason at all.” Meyers v.
Meyers, 861 N.E.2d 704, 706 (Ind. 2007) (citations and internal quotation marks omitted).
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Indiana courts presume employment relationships to be at-will. See, e.g., Orr v. Westminster
Village North, Inc., 689 N.E.2d 712, 717 (Ind. 1997). Indiana courts apply the employment atwill doctrine as a rule of contract construction, rather than a substantive rule of law. Id. Thus, a
party may rebut the presumption of employment at-will by demonstrating that an exception to
the doctrine applies. Id. at 718.
Indiana courts recognize three common law exceptions to the doctrine: (1) adequate independent
consideration; (2) the public policy exception; and (3) promissory estoppel. Id. Currently
Indiana courts do not recognize an implied contract exception for employee handbooks. As
discussed below, the Indiana Supreme Court suggests it might be willing to recognize such an
exception under certain facts. Additionally, Indiana law provides a number of statutory
exceptions to the employment at-will doctrine.
Adequate Independent Consideration
Indiana courts recognize an exception to the at-will doctrine where a party demonstrates that
“adequate independent consideration” supports the employment contract. Orr, 689 N.E.2d at
718. If an employee demonstrates the existence of such adequate independent consideration, the
court will conclude that the parties intended to form an employment relationship that the
employer could only terminate for good cause. Id. For example, sufficient adequate
independent consideration exists where an employer is aware that the employee had a position
with “assured permanency” and the employee accepts the new job on the belief that the “new
employer could guarantee similar permanency.” Id. (citing Wior v. Anchor Indust., 669 N.E.2d
172, 175-76 (Ind. 1996)).
The Public Policy Exception
Second, since Frampton v. Central Indiana Gas Co., 297 N.E.2d 425 (Ind. 1973), Indiana courts
have recognized a public policy exception to the employment at-will doctrine. Indiana courts
apply the public policy exception when the termination of an employee contravenes a clear
statutory expression of a right or duty. Orr, 689 N.E.2d at 718. For example, in Frampton, the
court applied the public policy exception where an employer terminated its employee for filing a
workers’ compensation claim. Outside of the workers’ compensation context, Indiana courts
have also applied the exception where an employer fired its employee for refusing to commit an
illegal act. McClanahan v. Remington Freight Lines, Inc., 517 N.E.2d 390 (Ind. 1988)(refusing
drive truck with illegal weight limit, risk of personal criminal liability); McGarrity v. Berlin
Metals, Inc., 774 N.E.2d 71 (Ind. Ct. App. 2002)(accountant refusal to sign false corporate tax
return, personal criminal liability); Bregin v. Liquidebt Sys., No. 1:06-CV-23-TS, 2008 U.S. Dist.
LEXIS 2870, 44-45 (N.D. Ind. 2008) (the court dismissed the claim of the employee citing that
the illegal conduct in question was not a requirement of the employee’s position and as such the
employee was not pressured to join in conduct).
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Meyers v. Meyers, 861 N.E.2d 704 (Ind. 2007) – Public policy exception does not protect an
employee from retaliatory discharge for filing wage claim.
Overview. Plaintiff sued for retaliatory discharge alleging that the defendant terminated him
because he had filed claims against it for unpaid overtime pursuant to Ind. Code § 22-2-2-4(J)
and for taxes withheld from his paycheck but not deposited with the IRS. The Indiana Court of
Appeals reversed the trial court’s order granting the defendant’s motion to dismiss, holding that
under Frampton’s public policy exception, plaintiff had stated a claim for retaliatory discharge.
Meyers v. Meyers, 846 N.E.2d 280, 288 (Ind. Ct. App. 2006).
Held. On petition to transfer, the Indiana Supreme Court relied on Morgan Drive Away, Inc. v.
Brant, 489 N.E.2d 933, 934 (Ind. 1986), in reversing the court of appeals, holding that Meyers’
claim did not fall within the narrow exception created by Frampton and its progeny. In Morgan,
the court held that the employment at-will doctrine barred the plaintiff’s retaliatory discharge
claim. Id. The Morgan plaintiff claimed his employer terminated him for bringing a wage claim
under Ind. Code. § 22-2-4-4. Meyers, 861 N.E.2d at 706.
The court distinguished Meyers’ claims by noting that in Frampton, the language of the workers’
compensation statute itself supported the exception. Meyers, 861 N.E.2d at 706. Explaining that
the statute in Frampton commanded that “no rule, regulation, or other device shall, in any
manner, relieve an employer from the obligations under the Act,” the court explained that the
Frampton court had found that a “threat of discharge was such a device.” Id. Moreover, the
court noted, in cases outside of the Frampton line in which Indiana courts applied the public
policy exception, the employer terminated the employee for refusing to commit a criminal act or
omission. Id. at 707. In the present case, the plaintiff was not asked to violate a legal obligation,
and the statute at issue contained no “express statutory language” indicating that a retaliatory
discharge action was an appropriate remedy. Id.
Tony v. Elkhart, 851 N.E.2d 1032 (Ind. Ct. App. 2006) – Claim of constructive discharge in
retaliation for filing Workers’ Compensation claim falls within Indiana’s public policy
exception to the employment at-will doctrine.
Overview. Plaintiff brought a constructive discharge claim against the defendant Elkhart County
(the “County”) claiming that the County constructively discharged him in retaliation for filing a
workers’ compensation claim. Id. at 1034. Specifically, he alleged that, upon returning to work
after filing workers’ compensation claims for two separate injuries, his superiors treated him
with hostility, calling him a “faker” and accusing him of “malingering.” Id. (internal quotation
marks omitted). The County moved to dismiss plaintiff’s claim, arguing that Indiana does not
recognize a claim for constructive retaliatory discharge. The trial court granted the County’s
motion, noting that Indiana courts had not recognized a claim of constructive retaliatory
discharge. Id. at 1035.
Held. The Indiana Court of Appeals held that claims of constructive discharge for filing a
workers’ compensation claim fall within the public policy exception to the employment at-will
doctrine. In doing so, the court distanced itself from its holding in Cripe, Inc. v. Clark, 834
N.E.2d 731, 734 (Ind. Ct. App. 2005). In Cripe, the Court of Appeals expressed doubt that
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Indiana’s public policy exception to the employment at-will doctrine allowed for a claim of
constructive retaliatory discharge. Id. The Cripe court did not decide the question, however,
holding, instead, that even if Indiana law allowed such a claim, the plaintiff had not alleged
sufficient facts to support it. Id. at 735. Instead of following the Cripe majority, the Tony court
embraced Judge Robb’s dissent in Cripe, in which she argued for allowing a claim of
constructive retaliatory discharge. Tony, 851 N.E.2d at 1039 (citing Cripe, 834 N.E.2d at 740
(Robb, J. dissenting)). On the facts alleged, the court found that the Plaintiff had stated a
cognizable claim for constructive retaliatory discharge.
Promissory Estoppel
Indiana courts allow employees, in limited circumstances, to invoke the doctrine of promissory
estoppel. Orr, 689 N.E.2d at 718. To effectively invoke promissory estoppel as an exception to
the employment at-will doctrine, the employee must plead it with particularity. Id. The
employee must also demonstrate three elements: (1) that the employer made a promise to the
employee; (2) that the employee relied on the promise to his detriment; and (3) that the promise
otherwise meets the Restatement test for promissory estoppel. Id; Eby v. York-Division,
Borg-Warner, 455 N.E.2d 623, 629 (Ind. Ct. App. 1983). An at-will employee may not recover
wrongful discharge damages under a promissory estoppel theory. See McCalment v. Eli Lilly &
Co., 860 N.E.2d 884, 895 (Ind. Ct. App. 2007) (citing Jarboe v. Landmark Community
Newspapers of Ind., Inc., 644 N.E.2d 118, 121 (Ind. 1994)). Indiana courts limit the damages an
at-will employee may recover for promissory estoppel to reliance damages. Id.
Employee Handbooks
A number of states recognize an implied contract exception to the employment at-will doctrine in
which an employee handbook may, under certain circumstances, create an implicit contract. To
date, Indiana courts have not recognized this exception. On at least two occasions, however,
Indiana courts have entertained the possibility of (but declined to) allow this exception. See Orr,
689 N.E.2d at 717; McCalment, 860 N.E.2d at 893.
In both Orr and McCalment, the courts noted that, even if the exception were available generally,
the particular facts would not support such a claim. See Orr, 689 N.E.2d at 722; McCalment,
860 N.E.2d at 893. In each case, the handbook at issue contained a disclaimer stating explicitly
that the handbook did not constitute a contract. Moreover, in each case, the court held that, even
absent the disclaimer, the language of the handbook was too vague to constitute a valid unilateral
contract. These two cases suggest that Indiana might recognize this exception if the handbook in
question (1) contained clear contractual language, and (2) did not contain an explicit disclaimer.
Statutory Exceptions
The Indiana Civil Rights Act, Ind. Code Ann. § 22-9-1-2(a), prohibits employers from
terminating employees on the basis of race, religion, color, sex, disability, national origin, or
ancestry. Additionally, Ind. Code Ann. § 22-9-2-2 prohibits employers from terminating
employees between the ages of 40 and 70 on the basis of age. These statutes also prohibit
employers from retaliating against employees for engaging in conduct protected under their
provisions, such as reporting prohibited conduct or filing a claim.
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Additionally, the Indiana Code carves out a number of other exceptions to the employment
at-will doctrine. Indiana law prohibits employers from terminating an employee on the bases
listed below. As noted below, only some of these provisions are enforceable through a private
action.
•
For filing a complaint under the Indiana Occupational Safety and Health Act. Ind. Code
Ann. § 22-8-1.1-38-1.
•
For receiving a summons, serving as a juror, or attending court for possible jury service.
Ind. Code Ann. § 35-44-3-10.
•
For taking leave to participate in certain types of military training. Ind. Code Ann.
§ 10-17-4-1(b).
•
For taking leave to spend time with a family member who is on active military duty. Ind.
Code Ann. § 22-2-13-15.
•
For using tobacco products outside of work. Ind. Code Ann. § 22-5-4-1(a).
•
For reporting a violation of state or federal law or a misuse of public resources, provided
that the employee is a state employee. Ind. Code Ann. § 4-15-10-4.
•
For having wages garnished or assigning wages pursuant to a child support obligation.
Ind. Code Ann. §§ 24-4.5-5-106 (garnishment), 31-16-15-25 (assignment).
•
For an absence occasioned due to volunteer firefighter activities. Ind. Code Ann.
§ 4-15-10-7.
•
For filing a report concerning an endangered adult. Ind. Code Ann. § 12-10-3-11(c).
•
For refusing to perform an abortion or participate in the performance of an abortion.
Ind. Code Ann. §§ 16-34-1-4, 5, 6, 7.
•
For off-duty political actions outside of their official capacity (state employees).
Ind. Code Ann. § 4-15-10-2.
•
For exercising rights under Indiana’s Wage Payment statute. Ind. Code Ann.
§ 22-2-2-11. But see, Meyers v. Meyers, 861 N.E.2d 704 (Ind. 2007).
WISCONSIN
Wisconsin courts apply a presumption of employment at-will. See Winkelman v. Beloit
Memorial Hosp., 483 N.W.2d 211 (Wis. 1992); Brockmeyer v. Dunn & Bradstreet, 225 N.W.2d
834 (Wis. 1983). An employer may terminate an employee “for good cause, for no cause, or
even for cause morally wrong, without being thereby guilty of legal wrong.” Brockmeyer,
225 N.W.2d at 837. Wisconsin recognizes a public-policy exception to the employment at-will
doctrine, Brockmeyer, 225 N.W.2d at 840, as well as an exception for implied contracts created
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by employee handbooks, Ferraro v. Koelsch, 368 N.W.2d 154 (Wis. 1985). Wisconsin does not
recognize a cause of action for promissory estoppel arising out of a promise of employment to an
at-will employee. See, e.g., Heinritz v. Lawrence University, 535 N.W.2d 81 (Wis. Ct. App.
1995).
Public Policy Exception
In Brockmeyer, the Wisconsin Supreme Court recognized a limited exception to the employment
at-will doctrine “when the discharge is contrary to a fundamental and well-defined public policy
as evidenced by existing law.” 225 N.W.2d at 840. “Existing law” includes constitutional,
statutory, and administrative law. Winkelman, 483 N.W.2d at 215. When a plaintiff bringing a
wrongful discharge claim under Wisconsin law “identifies a public policy sufficient to trigger the
exception, and further demonstrates that the termination violated that public policy, the burden
shifts to the employer to show just cause for the termination.” Bammert v. Don’s Super Valu,
646 N.W.2d 365, 396 (Wis. 2002).
Repetti v. Sysco Corp., 730 N.W.2d 189 (Wis. Ct. App. 2007) – Public policy exception does
not afford employee a cause of action for wrongful discharge where a statute already
provides a sufficient remedy.
Overview. Plaintiff, an at-will employee, brought a wrongful discharge claim against his
employer, Sysco Corp., alleging that Sysco terminated him for reporting accounting
falsifications. Sysco moved to dismiss the plaintiff’s claim, first arguing that the Sarbanes-Oxley
Act, 18 U.S.C. § 1514A, preempted his state law claim, and then, later, that while SarbanesOxley did not preempt a state law claim, its remedies obviated any need to expand Wisconsin’s
public policy exception. Id. at 191.
Held. Emphasizing that Wisconsin courts construe the public policy exception narrowly, the
court agreed with Sysco that there was no reason to expand Wisconsin’s public policy exception.
It noted that the Wisconsin Supreme Court created the public policy exception in recognition of
the fact that the legislature “has not and could not cover every type of wrongful termination that
violates a clear mandate of public policy.” Id. at 192 (citing Brockmeyer, 335 N.W.2d at 84142). Where the legislature provides an adequate remedy, however, courts need not invoke the
public policy exception. Id. at 192. Indeed, the court explained, even if the plaintiff had
“established that his discharge contravened a fundamental and well-defined public policy found
in Sarbanes-Oxley,” the Act by itself provided sufficient remedies. Id. at 194.
Employee Handbooks
Under the Wisconsin Supreme Court’s decision in Ferarro, an employee handbook may create
an enforceable contract, abrogating the presumption of employment at-will. 368 N.E.2d at 678.
Following Ferraro, Wisconsin courts consider whether the handbook at issue contains the
following components to determine whether it creates an enforceable contract:
(1) an employee acknowledgement and acceptance of the
handbook’s policies and rules as a condition of continued
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employment; (2) discharge only for just cause; (3) a mandatory
progressive disciplinary procedure based on the number and
seriousness of rule violations; (4) a layoff procedure based on
seniority; (5) distinctions between probationary and nonprobationary employees; and (6) an expectation that employees
would provide a two-week notice before leaving their employment.
Tasker v. Chieftain Wild Rice Co., 2003 WL 14893364 at *2 (Wis. Ct. App. 2003) (nonprecedential opinion) (citing Ferarro, 368 N.W.2d at 669-70); see also Wolf v. F.M. Banks,
534 N.W.2d 877, 881 (Wis. Ct. App. 1995). Wisconsin courts do not require the presence of all
of the Ferraro factors in order to find an enforceable contract. Wolf, 534 N.W.2d at 882.
Statutory Exceptions
The Wisconsin Fair Employment Act (“WFEA”), Wis. Stat. Ann. § 111.31 et. seq., prohibits an
employer from terminating an employee on the basis of age, sex (including
pregnancy/childbirth), creed, color, disability, genetic testing, marital status, sexual orientation,
national origin, arrest record, conviction record, military-service membership, and the use or
non-use of lawful products off the employer’s premises during nonworking hours. Moreover,
the WFEA prohibits an employer from terminating or otherwise retaliating against an employee
for opposing a practice prohibited by the WFEA, filing a complaint under the WFEA, or
testifying in a WFEA proceeding. Wis. Stat. Ann. § 111.322(3).
Additionally, the Wisconsin Statutes contain a number of other exceptions to the employment atwill doctrine. Wisconsin law prohibits employers from terminating an employee on the
following bases:
•
For requesting information about toxic substances, infectious agents, or pesticides
in the workplace under Wisconsin’s Employee Right-to-Know Law. Wis. Stat.
Ann. § 101.595(2).
•
For exercising their rights under Wisconsin’s Family and Medical Leave Law.
Wis. Stat. Ann. § 103.10(11)
•
For participating in jury service. Wis. Stat. Ann. § 756.255.
•
For union activity or protected concerted activity or for filing charges with or
appearing before the Wisconsin Employment Relations Commission. Wis. Stat.
Ann. §§ 111.06(1), 111.70(3), 111.84(1).
•
For whistle-blowing (by state employees). Wis. Stat. Ann. § 230.83(1).
•
On the basis of a lie detector test or for refusing to take a lie detector test.
Wis. Stat. Ann. § 111.37(2).
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ARKANSAS
Lynn v. Wal-Mart Stores, Inc., 102 Ark. App. 65, ___ S.W.3d ___, 2008 WL 725604 (2008)
A former employee who claimed his discharge was wrongful and violated public policy did
not establish his claim and his letter of global assignment did not modify his at-will status.
Overview. The former employee had been assigned to work in Costa Rica pursuant to a Global
Assignment Letter that specifically stated that it was not a contract for employment or an
employment agreement. While on the assignment the employee and a subordinate violated the
employer’s fraternization policy. The employee alleged that the real motive for his termination
was his allegation that his employer was buying goods from companies that produced goods in
inhumane working conditions and that it had misrepresented this fact in its annual report on
supplier standards. The trial court granted the employer’s request for summary judgment and
found that no cause of action was stated.
Held. The State Court of Appeals found that the employee was an at-will employee and that
even if he could establish that his assignment was a contract for a term of three years his
admitted violation of the no fraternization policy of employer established good cause for his
termination. Moreover, he did not establish a public policy exception to the at-will rule since
any violations of the employer to follow its own private, internal policies or labor laws of foreign
countries did not implicate the public policy of Arkansas. It stated that any such public policy
exception had to arise from the statutes or constitutional provisions of the State and that the one
state statute asserted by the employee as applicable had no nexus between the reports and the
public policy.
IOWA
Napreljac v. John Q. Hammons Hotels, Inc., 505 F.3d 800 (8th Cir. 2007) – A terminated
employee did not establish that protected activity caused termination or retaliation based
upon a Worker’s Compensation claim.
Overview. The former employee brought action asserting that he had been terminated from his
employment as a hotel maintenance engineer for falsely reporting a workplace injury. He
claimed an Iowa common law retaliatory discharge claim for exercising his right to workers’
compensation benefits and violations of the Americans with Disabilities Act. The employee had
claimed a number of injuries, including a final one that video tape revealed did not occur. He
was terminated for falsification of employment records. The district court had granted employer
summary judgment.
Held. The Circuit Court of Appeals agreed with the district court that summary judgment was
proper. It found that the Supreme Court of Iowa, while recognizing that asserting a workers’
compensation claim is a protected activity for an otherwise at-will employee, has noted the
limited nature of such a defense. It noted that the State Supreme Court had expressed concern
with the “proliferation of common-law suits” and that claimed harassment of a worker does not
give rise to a claim at common law. The court found that the public policy as limited by the
Supreme Court does not extend the tort to all situations in which an employee reports an injury.
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It found that the employee failed to allege sufficient facts that his protected activity was the
“determinative factor” in the employer’s decision to terminate him.
McVey v. National Organization Service, Inc., 719 N.W.2d 801 (Iowa 2006) – Public policy
found in state statute requiring employers to provide copy of employee drug testing policy.
Overview. An employee was discharged for testing positive for marijuana and brought an action
against former employer for its failure to comply with the provisions of a state statute which
required, among other items, that the employee receive a copy of the written policy prior to its
use on the employee. The trial court had dismissed the complaint on summary judgment.
Held. The Supreme Court found that there was a disputed fact whether the employee had
received a written copy of the policy that employer had adopted on drug testing. Employer
argued that the exception to the at-will rule of public policy did not apply in this case since Iowa
does not favor the presence of drug users in the workplace. The court noted, however, that the
case did not involve a court established public policy exception to the at-will rule. Rather the
public policy in this case was that established by the legislature in the drug testing statute
applicable to employers. It found that a material fact existed as to whether the employee
received a copy of the written policy and remanded the matter for a trial on that issue.
MINNESOTA
Nelson v. Productive Alternatives, Inc., 715 N.2d 452 (Minn. 2006) – No public policy
exception to the at-will doctrine for exercising voting rights.
Overview. Former employee, who also was a member of his nonprofit corporation employer,
was terminated as an employee of the corporation. He claimed that this was done because he
exercised his rights as a voting member of the corporation and that his discharge was in
retaliation of exercising those rights. The trial court found that the Minnesota Whistleblower Act
preempted these types of common law public policy claims and dismissed the action. The
Minnesota Court of Appeals disagreed that the Whistleblower Act had preempted common law
claims for violation of public policy, but found that the employee had not set forth a public
policy exception to the at-will rule in his pleadings so it upheld the dismissal of the action.
Held. The Supreme Court agreed with the Court of Appeals that the Minnesota Whistleblower
Act had not replaced the common law public policy exception to the at-will doctrine as
articulated in previous decisions such as Phillips v. Clark Oil & Refining Corp., 408 N.W.2d 569
(Minn. 1987). It found that employees could have both an action for violation of the
Whistleblower Act as well as a common law claim of wrongful termination because of a public
policy exception to the at-will doctrine. In this case, however, if found that discharging an
employee who had exercised his voting rights as a member of a nonprofit corporation did not rise
to the level of a clear public policy violation. The court held that if such a policy is to be found
in the nonprofit corporation statutes of the Legislature must make such modification.
Commentary. Those individuals who wish to examine this case further should read the decision
of the Minnesota Court of Appeals in this matter found at 696 N.W.2d 841 (2005), wherein the
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interplay with the Whistleblower Act and the common law public policy exception to the at-will
doctrine is discussed in more detail.
MISSOURI
Drury v. Missouri Youth Soccer Ass’n, Inc., 259 S.W.3d 558 (Mo. App. 2008) – Termination
for testifying in a quasi judicial hearing established at-will exception.
Overview. Former administrative/executive director and a student intern brought an action
against their former employer, a youth soccer association, for wrongful termination, punitive
damages and breach of contract arising out of a claim of sexual harassment when the student
intern was inappropriately touch by a vice president. The complaint had been presented to a
quasi judicial hearing review board of employer. The director maintained that after she testified
at the review board employer commenced retaliatory action against her even though she had
been rated a few months prior to be a good to excellent employee. The trial court let the matter
go to the jury which award both individuals damages.
Held. The Court of Appeals held that testifying before a quasi judicial proceeding conducted by
employer pursuant to its internal rules and procedures under the facts of this case did provide the
director with a public policy exception to the at-will employment doctrine. The jury’s
determination of an award of $75,000 in actual damages was sustained as well as its award of
$75,000 in punitive damages. The court found, however, that the former intern did not establish
with sufficient evidence her claim that she had a contract with employer for the permanent
removal of the former vice president from any future capacity with employer and that her claim
for personal injuries was barred by the applicable statute of limitations. The jury’s award in
these respects was vacated.
Kelly v. Bass Pro Outdoor World, LLC, 245 S.W.3d 841 (Mo. App. 2007) – Jury award of
$4,300 for wrongful termination of at-will employee based upon public policy exception
upheld, but $2.8 million award of punitive damages vacated.
Overview. Former loss prevention employee was fired after he observed his supervisor breaking
into an abandoned car located on employer’s parking lot and subsequently reported the matter to
his employer. No criminal charges were brought against the supervisor, but the employee
asserted that he was discharged in retaliation of reporting the matter to company officials. The
trial court permitted the matter to go to the jury which found in favor of the employee and
awarded him $4,300 in actual damages and $2.8 million in punitive damages.
Held. The Court of Appeals found that the employee had presented sufficient evidence to the
jury that his discharge was based upon his reporting his supervisor to company officials of
suspected wrongdoing. The employee did not have to prove that an actual crime had taken place
as long as he reasonably believed that it had occurred. This was a sufficient basis for the public
policy exception to the at-will rule. The court held, however, that punitive damages of $2.8
million, while proper under the facts of the case, was 651 times greater than the actual damages.
As a result, it raises the presumption of unconstitutionality and was excessive and
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disproportionate. The court ordered that the matter be returned to the trial court for
reconsideration of the amount of the award.
NEBRASKA
Trosper v. Bag ‘N Save, 273 Neb. 855, 734 N.W.2d 704 (2007) – Demotion at work after
filing workers’ compensation claim could be basis of public policy exception to at-will
doctrine.
Overview. The employee was demoted from position of deli manager to deli clerk after she
suffered a work-related injury at work and filed a claim for benefits. Her compensation
decreased from about $30,000 to $22,500 as a result. She brought an action based upon a public
policy exception to the at-will doctrine based upon her filing of the workers’ compensation
claim. The trial court dismissed the complaint finding that it did not state a claim upon which
relief could be granted.
Held. The Supreme Court reversed, finding that a natural extension of its decision in Jackson v.
Morris Communications Corp., 265 Neb. 423, 657 N.W.2d 634 (2003), discussed below,
included demotions at work as well as terminations from work for filing workers’ compensation
claims. The court found that this was a public policy exception to the at-will doctrine that
provided an employee with relief from such action. The court reviewed several other states’
findings concerning actions for retaliatory demotions. The court found that since it had included
within the public policy exceptions retaliatory discharge it was reasonable to include this lesser
form of discipline.
Commentary. It is important to note that this case was reviewed on the pleadings only and if the
employer can prove that the employee could no longer perform the functions of the deli manager
because of her injuries, a McDonnell Douglas burden shifting analysis comes into play, a fact
noted by the concurring opinion of Justice Gerrard.
Riesen v. Irwin Industrial Tool Company, 272 Neb. 41, 717 N.W.2d 907 (2006) – Former
employee charging retaliatory discharge for filing a Workers’ Compensation claim
established a prima facie case of retaliatory discharge and issue of fact remained to
preclude summary judgment whether employer’s reason offered was a pretext.
Overview. The employee had filed a workers’ compensation claim that had been pending for
over a year. The employee had worked off and on during this period, had received favorable
work evaluations and had received raises. During the course of the workers’ compensation claim
proceedings the employee had answered certain interrogatives about his work history that varied
from what he had submitted at the time of his hiring. The trial court granted summary judgment
based upon its conclusion that the employee had failed to prove that employer was motivated by
retaliation of that the employer’s justification was pre-textual.
Held. The Supreme Court reversed, finding that questions of fact existed that required a trial. It
applied the three part test that plaintiff first had the burden of proving a prima facie case of
discrimination. If plaintiff succeeded the burden shifts to employer to articulate some legitimate,
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non-discriminatory reason for plaintiff’s discharge. If this is done the presumption of
discrimination is rebutted. The plaintiff then has the burden of proving the reason offered by
employer was pre-textual. The court found that the employee had done this in the case and that a
material issue of fact remained for jury determination.
Wendeln v. The Beatrice Manor, Inc., 271 Neb. 373, 712 N.W.2d 226 (2006) – Claim for
retaliatory discharge in violation of public policy lies for reporting of suspected patient
abuse under state law.
Overview. Employee had been discharged after she had filed a report with the Nebraska
Department of Health and Human Services pursuant to the Adult Protective Services Act
(APSA) concerning the treatment of a patient at the facility. Her supervisor was angry at her
since she did not first report the matter to the supervisor and shortly thereafter she was fired.
The trial court permitted the matter to go to the jury on the basis of wrongful termination in
contravention of the public policy articulated in the APSA. The jury returned a verdict in her
favor for $4,000 in actual damages and $75,000 in non-economic damages.
Held. The Supreme Court affirmed, finding a public policy exception in the APSA to the at-will
doctrine. It noted that the matter was not brought under the Nebraska Fair Employment Practice
Act (NFEPA), but was a separate cause of action asserting public policy and retaliatory
discharge sounding in tort. As such, it was under the four year statute of limitations for tort
claims and not the 300 day limitation period of the NFEPA. The court found that the purpose of
the APSA would be circumvented if employees mandated by the APSA to report suspected
abuse could be threatened with discharge for making such a report. The court concluded that the
damages found by the jury were supported by the record in the case.
NORTH DAKOTA
Heng v. Rotech Medical Corp., 2004 N.D. 204, 688 N.W.2d 389 (2004) – State whistleblower
statute creates public policy exception to at-will.
Overview. Former employer had notified employer that she felt that certain service technicians
who were not licensed healthcare specialist or respiratory therapists should not assemble oxygen
delivery systems and instruct patients in their use because it violated State law. After she
reported this to company officials she was terminated. Subsequently, she brought an action for
retaliatory discharge, breach of contract and intentional infliction of emotional distress. She
voluntarily dismissed the later claim and the trial court granted summary judgment to employer
on the former claims and order her to pay over $57,000 in attorneys’ fees to employer.
Held. The Supreme Court agreed with the trial court that she could not sustain her claim of
breach of contract since the documents, including a policy manual, clearly established that she
was an at-will employee. The court found, however, that her claim of retaliatory discharge
should be permitted to go to trial since there were material facts in dispute. The court noted that
the North Dakota whistle blower statute created a public policy protecting employee notification
of suspected violations of statutes so long as done in good faith. The statute did not require a
report to an outside agency, but it could be made only to the employer. Unlike the Dahl case,
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noted infra, the employee’s report in this case was not just incidental implications of potential
violations of state law. The question of whether these reports were made in good faith was a
question of fact inappropriate to resolution on summary judgment. Similarly, the trial court’s
determination that there was no casual connection between her protected activity and her
termination was a question of fact requiring a trial on the merits.
Peterson v. North Dakota University System, 2004 N.D. 82, 678 N.W.2d 163 (2004) – Tenured
professor was properly discharged from her position pursuant to termination procedures
and did not establish a wrongful discharge claim based upon a public policy exception.
Overview. The University had removed for cause a tenured professor for various reasons after
an extensive administrative procedure in compliance with its internal rules and regulations and
State Requirements. The trial court had granted the university summary judgment finding that
the professor had not raised any issues of material fact.
Held. The Supreme Court agreed. It noted that the university had complied with its policy
manual concerning dismissals of tenured professors. The professor’s wrongful discharge claim
presented no independent public policy violation, but was based entirely upon the terms of her
contract which the university followed in her discharge. This did not establish a violation of
public policy creating the tort of retaliatory discharge for violation of a public policy. The public
policy must be evidenced by a constitutional or statutory provision to prohibit terminating an atwill employee. She presented no claim of such a violation in this case.
SOUTH DAKOTA
Tiede v. Cortrust Bank, N.A., 2008 S.D. 31, 748 N.W.2d 748 (2008) – Former national bank
officer’s action against employer for retaliatory discharge in violation of public policy not
preempted by National Bank Act.
Overview. Former bank officer was discharged when she refused to stop filing suspicious
activity reports and currency transaction reports allegedly required under the Bank Secrecy Act.
She filed an action for retaliatory discharge against her employer based upon public policy.
Employer as a national bank claimed that the National Bank Act (NBA) preempted any such
claim in state court. The trial court granted the employer’s motion on the ground of preemption
and dismissed the case.
Held. The Supreme Court held that an action for retaliatory discharge is a tort action and not a
contract action so it was not preempted by the NBA. It noted that actions for wrongful
termination, which it had previously found were preempted, are actions in contract while actions
for retaliatory discharge are actions in tort and not preempted. The public policy exception to the
at-will doctrine involves tort liability against the public policy of the State and not contractual
liability. As a result the action is independent of the contractual employment relationship and the
NBA does not preempt it.
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Anderson v. First Century Federal Credit Union, 2007 S.D. 65, 738 N.W.2d 40 (2007) –
Former employee who sued for constructive discharge did not establish a claim for public
policy violation of the at-will relationship.
Overview. Former vice president of a credit union brought an action for constructive discharge
based upon his claim that the president of the credit union had engaged in inappropriate bank
transactions which had been reported to members of the board of trustees of the credit union.
When the employee did not think that the board was acting quickly enough he tendered his
resignation even though he was asked to reconsider it. The trial court entered summary
judgment against him on his claims of constructive discharge and intentional infliction of
emotional distress.
Held. The Supreme Court affirmed the holding of the trial court. It found that there was a public
policy exception to the at-will doctrine in South Dakota where the employee is fired in retaliation
to for refusal to commit an unlawful act. But in this case no one asked the vice president to
commit an unlawful act. His report to the board was that the president may be committing
unlawful acts. Moreover he quit his employment when he didn’t think that the board was acting
quickly enough concerning his report about the president. He did not establish that the working
conditions had become so hostile and intolerable so as to justify his leaving his position and
establish constructive discharge.
Dahl v. Combined Insurance Company, 2001 S.D. 12, 621 N.W.2d 163 (2001) – Former
insurance agent stated claim for wrongful discharge under public policy exception to
at-will doctrine where he had reported missing premium payments to state insurance
division.
Overview. A former insurance agent of twenty years with employer noticed that certain
insurance premiums of nearly $6,000 had not been remitted to employer. Employer charged
one-third of these missing premiums to the agent when it could not determine what person had
misappropriated the money. When he told his employer that he planned to report the matter to
the State Insurance Division he was told that if he did he would be terminated from his
employment. Shortly after he made his report to the State he was terminated. His complaint for
wrongful discharge based upon a public policy exception to the at-will doctrine was dismissed by
the trial court.
Held. The Supreme Court found that he had stated a cause of action for a public policy
exception to the at-will doctrine. This public policy is primarily determined by the constitution,
statutes and judicial decisions. The employee was faced with either reporting the missing funds
to the State Insurance Division and losing his employment or not reporting the missing funds in
order to retain his employment. The court found that this created genuine issues of fact that
required a trial to determine if that had occurred. The court noted that this was a form of whistle
blowing that provides an invaluable role in society and should be protected.
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ALASKA
Olson v. Teck Cominco Ala., Inc., 144 P.3d 459 (Alaska 2006) – Termination did not violate
public policy where excessively absent employee was fired shortly after filing workers’
compensation claim.
Overview. Plaintiff, who had a long history of chronic depression and alcohol abuse and
frequently missed work due to these conditions. Consequently, Defendant placed Plaintiff on a
step discipline plan whereby Plaintiff was able to take no more than five days of “unplanned
absences” during a calendar year; each of Plaintiff’s absences beyond the five-day limit would
result in progressively increasing disciplinary steps. Plaintiff continued to miss work excessively
and was eventually fired. However, just prior to being terminated, Plaintiff filed a workers’
compensation claim alleging that he was injured on the job as a result of lead exposure and
required treatment. Defendant investigated Plaintiff’s lead poisoning claim before discharging
him and came to the conclusion that he did not have the illness. Plaintiff brought a claim against
Defendant in the trial court alleging wrongful discharge in retaliation for filing a workers’
compensation claim. The trial court granted summary judgment for Defendant. Plaintiff
appealed to the Alaska Supreme Court.
Held. The court affirmed the trial court’s grant of summary judgment for Defendant and held
that Plaintiff was properly discharged for his excessive absenteeism, not in retaliation for the
filing of his workers’ compensation claim. The court reasoned that the undisputed evidence
showed that Plaintiff missed work on an extraordinary number of occasions before filing his
workers’ compensation claim. Moreover, in arriving at its decision, the court noted that
Defendant “systematically and consistently” used its progressive disciplinary plan to control
absences among its employees. In addition, the evidence demonstrated that none of Plaintiff’s
treatment providers thought that missing work was necessary. Therefore, because Plaintiff’s
absences were unwarranted, his termination was legitimate.
Reust v. Ala. Petroleum Contractors, Inc., 127 P.3d 807 (Alaska 2005) – There is an
actionable public policy tort for retaliation against witnesses in legal proceedings.
Overview. Plaintiff was interviewed by Defendant, for whom he worked intermittently in the
past, for a position as a project manager. According to Plaintiff, he was offered the job.
However, Plaintiff alleged that before beginning his new position he was informed by Defendant
that he was being “let go” because of his involvement in litigation between Defendant and
another former employee; during the prior year, Plaintiff testified against Defendant in a
deposition. Defendant denied ever offering Plaintiff the project manager position. Plaintiff
brought a claim in the trial court alleging wrongful discharge in violation of public policy. The
jury found that Plaintiff had been hired by Defendant and subsequently terminated unlawfully.
Defendant appealed to the Alaska Supreme Court.
Held. The court upheld the jury’s verdict and held that “there is an actionable public policy tort
in Alaska for retaliation against witnesses in legal proceedings.” The court reasoned that the
public policy justification for the tort was rooted in numerous statutes containing witness
protection provisions, including one making it a crime to retaliate against a witness by using
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force, damaging property, or making threats. Moreover, in its reasoning, the court noted that
“[s]ubjecting employers to tort liability for retaliating against employees who testify in legal
proceedings dissuades retaliatory conduct” and “[r]educes the temptation for employees, fearing
adverse responses from their employers, to provide false testimony or disobey a subpoena.”
ARIZONA
Arizona Employment Protection Act, ARIZ. REV. STAT. ANN. § 23-1501, et seq. (2008) –
Public policy exception to the at-will employment doctrine has been codified by the Arizona
Legislature.
Overview. Under Arizona state law, plaintiffs may bring a claim for wrongful termination in
violation of public policy under the Arizona Employment Protection Act (“EPA”). The EPA,
while codifying the at-will employment presumption, allows for application of the public policy
exception where an employer violates a state statute and that statute does not independently
provide for employee remedies. Moreover, pursuant to the EPA, an employer may be held liable
for wrongful termination in violation of public policy if it retaliates against an employee for
engaging in the following actions: (1) refusing to violate Arizona law; (2) whistleblowing;
(3) pursing workers’ compensation claims; (4) exercising voting rights; (5) choosing whether or
not to belong to a labor union; (6) serving in the national guard or armed services; (7) refusing to
purchase goods or supplies from a particular person as a condition of employment; or
(8) exercising the right to leave in connection with being a crime victim.
Commentary. The EPA’s “primary purpose [is] to circumscribe, not broaden, wrongful
termination claims based on alleged violations of public policy.” See Taylor v. Graham County
Chamber of Commerce, 33 P.3d 518, 525 (Ariz. 2001). The statute overruled the common law
public policy exception established by the Arizona Supreme Court in Wagenseller v. Scottsdale
Mem’l Hosp., 710 P.2d 1025 (Ariz. 1985). In that case, Plaintiff, an at-will hospital employee,
was terminated after refusing to expose her buttocks during a performance of the song “Moon
River” while participating in a camping and rafting trip with her supervisor and personnel from
other hospitals. The court held that Plaintiff would have violated Arizona’s indecent exposure
statute by exposing herself and that her termination for not engaging in that activity violated
public policy. The court further held that “an employer may fire for good cause or for no cause,”
but not “for bad cause – that which violates public policy.”
Higgins v. Assmann Elecs., Inc., 173 P.3d 453 (Ariz. 2007) – Supervisors can be held liable
under the Arizona Employment Protection Act.
Overview. Plaintiff had a consensual sexual relationship with her supervisor, which ended.
During a holiday weekend, Plaintiff’s supervisor came to Plaintiff’s home in an attempt to
contact her. After Plaintiff’s supervisor knocked on the door and received no response, he
entered the home uninvited, where he discovered Plaintiff and a male companion wearing only
towels. Plaintiff’s supervisor became enraged and physically assaulted Plaintiff and her
companion and told her that she was fired. Plaintiff’s company cell phone was disconnected,
and she did not return to work. Plaintiff filed a complaint in which she alleged an assault claim
against her former supervisor, as well as a wrongful termination claim against both her former
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supervisor and the company. A jury returned verdicts and awarded damages for Plaintiff on both
counts. With regard to the wrongful termination claim, Defendants filed motions for a new trial.
The trial court ruled that Plaintiff’s supervisor and her former employer were jointly and
severally liable for wrongful termination. Defendants appealed to the Arizona Court of Appeals,
with Plaintiff’s supervisor asserting that he could not be held liable under the EPA because he
was not her “employer.”
Held. The court denied Defendants’ motion for a new trial, and, as a matter of first impression,
held that Plaintiff’s supervisor could be found liable under the EPA. The court reasoned that
Arizona public policy “supports a determination that [Plaintiff’s supervisor] could be held liable
in a case where the company has invested its supervisor with day-to-day control over the
company, including the right to fire, and the supervisor has in fact exercised such control to harm
another.”
CALIFORNIA
Miklosy v. Regents of Univ. of Cal., 188 P.3d 629 (Cal. 2008) – Claim for wrongful
termination in violation of public policy cannot be asserted against supervisors.
Overview. Plaintiff, a computer scientist, was employed by the Regents of the University of
California (“UC”). Plaintiff worked at the Lawrence Livermore Nuclear Laboratory, where he
helped to determine the safety and reliability of the United States’ nuclear weapons stockpile.
Upon identifying numerous safety concerns regarding a particular project, Plaintiff informed
management orally and in writing about the project’s problems. Subsequently, he was fired by
three of UC’s supervisory employees. Plaintiff pursued administrative relief by filing a
whistleblower retaliation complaint with UC. After UC ruled against Plaintiff, he filed a
complaint in the trial court in which he alleged that UC and its supervisory employees
wrongfully discharged Plaintiff in violation of public policy. Defendants’ demurrer was granted
by the trial court, and Plaintiff appealed to the California Court of Appeal. The Court of Appeal
affirmed the trial court’s ruling, holding that Plaintiff’s wrongful termination in violation of
public policy claim was statutorily barred. Plaintiff appealed to the California Supreme Court.
Held. The court affirmed the appellate court’s decision and held that UC and its supervisory
employees were not liable for wrongful termination in violation of public policy. With regard to
UC, the court held that as a public entity, UC could not be held liable for a common law tort. In
addition, the court held that Plaintiff’s supervisors were not liable because “[a]n individual who
is not an employer cannot commit the tort of wrongful discharge in violation of public policy;
rather, he or she can only be the agent by which an employer commits that tort.” The court noted
that “the breach of the employment relationship is an indispensable element of the tort,” and
therefore “there can be no . . . cause of action without the existence of a prior employment
relationship between the parties.”
Commentary. Employers should note that the holding in this case is consistent with the
California Supreme Court’s decision in Jones v. Lodge at Torrey Pines P’ship, 4 Cal. 4th 1158
(2008). In Jones, the court held that supervisors, managers, and other employees cannot be held
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personally liable for retaliation under the California Fair Housing and Employment Act
(“FEHA”), California’s primary antidiscrimination statute.
Ross v. Ragingwire Telecomms., Inc., 174 P.3d 200 (Cal. 2008) – Refusing to hire medical
marijuana user after positive drug test does not violate public policy.
Overview. Plaintiff, a United States Air Force veteran, suffered from strain and muscle spasms
in his back as a result of injuries sustained while in the military. After being unable to obtain
relief from pain through other medications, Plaintiff, under California’s Compassionate Use Act
(“CUA”), began using marijuana on his doctor’s recommendation. Defendant hired Plaintiff as a
lead systems administrator, but required that he take a marijuana test as a condition of being
hired. Plaintiff’s positive test results came in shortly after he began employment, and Plaintiff
was subsequently suspended by Defendant. Although Plaintiff provided Defendant with a copy
of his doctor’s medical recommendation, Defendant terminated Plaintiff’s employment. Plaintiff
brought a claim for wrongful termination in violation of public policy in the trial court, which
sustained demurrer without leave to amend and entered judgment for Defendant. On appeal, the
California Court of Appeal affirmed the trial court’s decision. Plaintiff appealed to the
California Supreme Court.
Held. The court affirmed the appellate court’s decision and held that Plaintiff did not state a
cause of action for wrongful termination in violation of public policy. The court reasoned that
“nothing in . . . the [CUA’s] text or history indicates that voters intended to articulate any policy
concerning marijuana in the employment context, let alone a fundamental public policy requiring
employers to accommodate marijuana use by employees.” Consequently, employers were not
put on notice that they would have to accommodate the use of marijuana. Moreover, the court
noted that Defendant’s refusal to employ Plaintiff did not interfere with Plaintiff’s access to
marijuana.
Commentary. Employers should note that the issue of accommodation of medical marijuana in
the workplace may be revisited. Members of the California State Assembly recently attempted
to overrule Ross by introducing SB 2279. Through the bill, the Assembly sought to amend the
CUA and make it illegal for an employer to discriminate against a medical marijuana user based
on his or her status as a qualified patient or on the basis of a positive drug test for marijuana.
However, a qualified patient would have still been prohibited from medical marijuana use during
work hours or at his or her work site. Although SB 2279 passed both houses of the California
State Legislature, Governor Arnold Schwarzenegger vetoed SB 2279, noting that his concern
“with interference in employment decisions as they relate to marijuana use.” Nevertheless, a
future governor may have a different perspective than the current one regarding this issue.
Casella v. SouthWest Dealer Servs., 157 Cal. App. 4th 1127 (2007) – Terminating employee
for complaining about fraud violates public policy.
Overview. Plaintiff was hired as a sales representative by Defendant, a company that specialized
in selling its aftermarket auto products to car dealerships. While being trained, Plaintiff became
concerned that Defendant was engaging “payment packing,” a fraudulent marketing practice, by
quoting monthly payments to customers that including aftermarket products they did not order.
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After going along with the practice, Plaintiff eventually conveyed his concern to Defendant’s
head trainer. Unsatisfied with the head trainer’s response, Plaintiff discussed his reservations
with Defendant’s president. Sometime thereafter, Defendant terminated Plaintiff’s employment.
Plaintiff brought several claims against Defendant in the trial court, including a claim for
wrongful termination in violation of public policy, on which a jury returned a verdict for
Plaintiff. The California Court of Appeal heard the case on appeal.
Held. The court upheld the jury’s verdict and held that Plaintiff’s termination violated public
policy. The court reasoned that “the record . . . shows that Plaintiff’s wrongful termination in
violation of public policy claim, as presented to the jury, was premised on the theory that he
reasonably suspected [Defendant] was committing or was aiding and abetting in the commission
of fraudulent activities.” The court further reasoned that the fraudulent activities that formed the
basis of Plaintiff’s concern were “sufficiently tethered to a statute” that made it illegal to make
false or fraudulent representations or pretense to defraud another of money. Therefore, even
though a bill that specifically outlawed payment packing was not in effect when Plaintiff was
fired, Defendant still violated public policy when it terminated Plaintiff.
Franklin v. Monadnock Co., 151 Cal. App. 4th 252 (2007) – Plaintiff stated claim for
wrongful termination in violation of public policy where plaintiff was terminated after
complaining about workplace violence.
Overview. Plaintiff alleged that a coworker “threatened the safety of [Plaintiff and three other
coworkers] by stating that he would have them killed.” To “protect the health and safety of
everyone in the facility,” Plaintiff complained to Defendant’s human resources department
regarding the threats. According to Plaintiff, Defendant “allow[ed] the threats of violence and
attempted violence to continue unheeded in the workplace.” After the coworker attempted to
stab Plaintiff with a screwdriver and an unidentified weapon, Plaintiff complained to the police.
Subsequently, Defendant terminated Plaintiff’s employment. Plaintiff brought a claim for
wrongful termination in violation of public policy in which he alleged that he was terminated for
reporting the coworker’s threats of violence to Defendant’s human resources department and to
the police. Defendant’s demurrer was granted by the trial court, which concluded that Plaintiff’s
allegations did not sufficiently support a claim for wrongful termination in violation of public
policy. Defendant appealed to the California Court of Appeal.
Held. The court reversed the trial court’s grant of demurrer for Defendant and held that Plaintiff
stated a claim for wrongful termination in violation of public policy. The court reasoned that
certain California statutes, when read together, establish a fundamental “public policy requiring
employers to provide a safe and secure workplace, including a requirement that an employer take
reasonable steps to address credible threats of violence in the workplace.” Specifically, the court
cited occupational safety statutes within the Labor Code, a provision of the Code of Civil
Procedure that gives employers the ability to seek restraining orders on behalf of employees, and
a section of the Penal Code criminalizing threats of violence.
Carter v. Escondido Union High Sch. Dist., 941 P.2d 1157 (Cal. 2007) – Section of Education
Code outlining circumstances under which school may administer medication may not
form basis for wrongful termination in violation of public policy claim.
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Overview. Plaintiff, a high school teacher and basketball coach, learned from a student that the
school’s football coach suggested that the student consume protein shakes containing creatine in
order to gain weight. After the student began having problems with his kidneys and required
temporary hospitalization, Plaintiff informed the school’s athletic director that the student was
drinking protein shakes at the direction of the football coach. The athletic director told Plaintiff
that he would not take any action unless the student’s parents got involved. Plaintiff responded
by telling the athletic director that he would “be leaving [the school] if [he] could find a job
someplace” else. Plaintiff then applied to another high school within the same school district and
was hired on a probationary basis. The wife of the football coach from the school from which
Plaintiff departed later became interim principal at Plaintiff’s new school. After teaching for two
years at his new school, Plaintiff was informed that his employment would be terminated by the
school district. Plaintiff subsequently brought a claim against the school district for wrongful
termination in violation of public policy. A jury returned a special verdict for Plaintiff and
awarded him over $1 million in damages. The trial court entered judgment for Plaintiff, and the
school district appealed to the California Court of Appeal.
Held. The court reversed the jury’s verdict and held that the school district did not contravene a
well-established public policy in terminating Plaintiff’s employment. In arguing that his
termination violated public policy, Plaintiff relied upon section 49423 of the Education Code.
Section 49423 states that “any pupil who is required to take, during the schoolday, medication
prescribed for him or her by a physician or surgeon, may be assisted by a school nurse or other
designated school personnel if the school district receives” a “written statement from the
physician detailing [the treatment regimen] and a written statement from the parent . . . indicating
the desire that the school district assist the pupil in the matters set forth in the statement of the
physician.” The court held that section 49423 could not be the basis for the school district’s
liability because it did not proscribe any behavior, but instead outlined the circumstances under
which a school may assist a student by helping to administer medication. Moreover, the court
reasoned that the protein shakes consumed by the student were not prescribed by a physician,
making section 49423 inapplicable. Therefore, because the court was “unable to discern from
section 49423 . . . any fundamental and well-established public policy against teachers
recommending weight-gaining substances to students, the statute [could not] form the basis for
[Plaintiff’s] wrongful termination claim.” In addition, the court held that California’s
whistleblower protection statute did not apply to the circumstances here because Plaintiff did not
disclose a violation of a state or federal law or regulation.
HAWAII
United States ex rel. Lockyer v. Haw. Pac. Health, 490 F. Supp. 2d 1062 (D. Haw. 2007) –
Hawaii courts do not recognize a claim for wrongful termination in violation of public
policy where the public policy at issue is contained in a statute with a remedy.
Overview. Plaintiff, a physician who specialized in internal medicine, worked for an outpatient
clinic under an agreement that only allowed termination for cause. The clinic for which Plaintiff
worked had a large room in which chemotherapy was administered called the “chemo suite.”
Plaintiff claimed that he never administered chemotherapy in the chemo suite, while his
employer contended that he did. During the course of Plaintiff’s employment, he and his
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employer had a drawn out disagreement with regard to Plaintiff’s compensation. Eventually,
Plaintiff’s employer terminated his employment due to underperformance and complaints.
While Plaintiff and his employer were engaged in arbitration, Plaintiff discovered
reimbursements from Medicaid and Medicare for his administration of chemotherapy on billing
documents. Plaintiff abandoned arbitration and brought a qui tam complaint in the United States
District Court for Hawaii in which he alleged several claims, including one for retaliation in
violation of a Hawaii public policy to prohibit the submission of false or fraudulent claims for
payment to government assistance programs. Defendants, various health care providers, moved
for summary judgment.
Held. The court granted summary judgment for Defendants with respect to Plaintiff’s claim for
wrongful discharge in violation of public policy. The court reasoned that “Hawaii law
recognizes a ‘public policy exception’ to the at-will employment doctrine, such that an employer
may be subject to tort liability for wrongful termination in violation of public policy.” However,
the court stated that an employee may not assert such a wrongful termination claim where “the
public policy at issue is contained in a statute that provides a remedy for violations of that public
policy. Because Plaintiff and his employer had an agreement under which Plaintiff could only be
dismissed for cause, the court held that he was not an at-will employee. Moreover, the court held
that the statute on which Plaintiff based his claim had a remedial scheme. Consequently,
Plaintiff could not assert a common law tort claim for wrongful termination in violation of public
policy.
Commentary. The court relied on the Hawaii Supreme Court’s decision in Parnar v. Americana
Hotel, 652 P.2d 625 (Haw. 1982), the state’s seminal case regarding the public policy exception
to the at-will employment doctrine. In Parnar, the court reversed the trial court’s granting of
summary judgment for Defendant where Plaintiff’s employment was terminated to prevent her
from testifying against Defendant in grand jury proceedings. In establishing the public policy
exception, the court noted that “[b]ecause the courts are a proper forum for modification of the
judicially created at-will doctrine, it is appropriate that we correct inequities resulting from harsh
application of the doctrine by recognizing its inapplicability in a narrow class of cases.”
Mroz v. Hoaloha Na Eha, Inc., 410 F. Supp. 2d 919 (D. Haw. 2005) – Allegations of breach
of fiduciary duty against shareholders, officers, and directors may support a wrongful
discharge in violation of public policy claim.
Overview. Plaintiff was a minority shareholder in two corporations for which he was an at-will
employee. According to Plaintiff, a group of the corporations’ shareholders breached their
fiduciary duties to Plaintiff as majority shareholders, officers, and directors by failing to allow
Plaintiff to inspect corporate records, excluding Plaintiff from accessing corporate funds, and
personally using corporate funds. Plaintiff brought a claim for breach of fiduciary duty in the
United States District Court for Hawaii. Moreover, based on the alleged breach of fiduciary
duty, Plaintiff brought a claim for wrongful termination in violation of public policy. Defendants
moved for summary judgment.
Held. The court denied Defendants’ motion for summary judgment and held that Plaintiff
successfully alleged a claim for wrongful termination in violation of public policy. The court
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reasoned that in alleging that the group of shareholders breached their fiduciary duties, Plaintiff
“alleged a violation of public policy sufficient to overcome the at-will employment doctrine.”
Moreover, quoting the Hawaii Supreme Court’s previous decision in Cahill v. Hawaiian
Paradise Park Corp., 543 P.2d 1356 (Haw. 1975), the court reasoned that under Hawaii law,
“officers, directors, and shareholders may be personally liable for the tortious conduct of the
corporation or its agents if ‘there can be found some active or passive participation in such
wrongful conduct by such persons.’”
IDAHO
Mallonee v. State, 84 P.2d 551 (Idaho 2004) – Employee’s refusal to fire other employees
was not a refusal to commit an unlawful act and could not support a claim for wrongful
termination in violation of public policy.
Overview. Plaintiff worked as a transportation manager for Correctional Industries (“CI”),
where he supervised drivers who delivered furniture and were assisted by inmates from a
correctional facility. In violation of protocol and policies governing their employment, two
drivers allowed inmates to engage in such activities as smoking, wearing unauthorized clothing,
and making unauthorized visits to their homes. After both drivers admitted to the violations, but
while an investigation into their activities’ was still pending, Plaintiff’s supervisor ordered
Plaintiff to fire them. Because terminating an employee during an ongoing investigation was
prohibited, Plaintiff refused to discharge the two drivers. However, Plaintiff’s supervisor
persisted, eventually directing Plaintiff to fire the drivers on a particular day. Plaintiff still
refused to terminate the drivers’ employment, which resulted in Plaintiff’s supervisor giving
Plaintiff an opportunity to resign or be fired without cause. Plaintiff did not resign and his
employment was terminated. Subsequently, Plaintiff brought several claims, including one for
wrongful discharge in violation of public policy, in the trial court. The trial court granted
summary judgment for Defendants – Plaintiff’s Supervisor and the State of Idaho – and Plaintiff
appealed to the Idaho Supreme Court.
Held. The court affirmed the trial court and held that Plaintiff’s termination did not violate
public policy. Plaintiff argued that the order to fire the two drivers violated two statutes. Under
I.C. § 18-705, it is unlawful for a person to “willfully [resist, delay, or obstruct] any police
officer, in the discharge, or attempt to discharge . . . any duty of his office.” Moreover, pursuant
to I.C. § 18-1353(1)(a), a person commits an offense if he or she “threatens unlawful harm to any
person with purpose to influence his decision, opinion, recommendation, vote or other exercise
of discretion as a public servant, party official, or voter.” As to § 18-705, the court held that
Plaintiff’s suspicion that his supervisor intended to delay further investigation into the drivers’
activities was speculation. Moreover, with respect to § 18-1353(1)(a), the court held that
Plaintiff did not have the discretion to refuse to follow his supervisor’s order to fire the drivers.
Finally, the court held that because the drivers admitted to violating policies that governed their
employment, there was nothing illegal about Plaintiff’s supervisor’s order to terminate their
employment.
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Edmondson v. Shearer Lumber Prods., 75 P.3d 733 (Idaho 2003) – Employee cannot bring
claim against private sector employer for termination in violation of employee’s
constitutional right to free speech.
Overview. Plaintiff, who was extensively involved in the community in which he lived, was
employed by Defendant at its Elk City lumber mill for more than twenty years. Plaintiff
attended a public meeting held by a group known as Save Elk City. One of Save Elk City’s
leaders, also employed by Defendant, encouraged support for a proposal that the group submitted
to the Federal Lands Task Force Working Group concerning the management of a local national
forest. Although the proposal was submitted on behalf of Save Elk City, it was actually
Defendant’s owner’s project. Defendant learned that Plaintiff was opposed to Save Elk City’s
proposal and made it clear to Plaintiff that any opposition to the proposal would lead to serious
consequences. Eventually, Plaintiff was terminated for opposing Save Elk City’s proposal,
which conflicted with Defendant’s interests. Subsequently, Plaintiff brought a claim in the trial
court against Defendant for wrongful termination in violation of public policy in which he
claimed that his employment was terminated as a result of his exercise of free speech. The trial
court granted summary judgment for Defendant, holding that Plaintiff’s allegations did not fall
within the limited public policy exception to the employment at-will doctrine. Plaintiff appealed
to the Idaho Supreme Court.
Held. The court affirmed the trial court’s grant of summary judgment for Defendant and held
that “an employee does not have a cause of action against a private sector employer who
terminates the employee because of the exercise of the employee’s constitutional right to free
speech.” The court reasoned that under Idaho law, the “the only general exception to the
[employment at-will] doctrine is that an employer may be liable for wrongful discharge when the
motivation for discharge contravenes public policy.” However, the court further reasoned that
the “prevailing view among those courts addressing the issue [of restriction of free speech] in the
private sector is that state or federal constitutional free speech cannot, in the absence of state
action, be the basis of a public policy exception in wrongful discharge claims.” Moreover, the
court reasoned that Defendants’ actions did not violate an Idaho statute that outlaws harassing,
intimidating, and threatening behavior by private employers.
MONTANA
Wrongful Discharge From Employment Act, MONT. CODE ANN § 39-2-902, et seq. (2009) –
Montana’s wrongful discharge from employment act offers the state’s exclusive remedy for
wrongful discharge and codifies the public policy exception to the at-will employment
doctrine.
Overview. Pursuant to the WDEA, “[d]uring a probationary period of employment, the
employment may be terminated at the will of either the employer or the employee on notice to
the other for any reason or for no reason.” If probation is not established from the outset of an
employment relationship, the WDEA sets forth a default probationary period of six months.
Under the WDEA, a discharge is wrongful only if: (1) it is in retaliation for the employee’s
refusal to violate public policy or for reporting a violation of public policy; (2) it is not for good
cause and the employee has completed the employer’s probationary period; or (3) the employer
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violates the express provisions of its own written personnel policy. The WDEA broadly defines
“public policy” as “a policy in effect at the time of the discharge concerning public health,
safety, or welfare established by a constitutional provision, stature, or administrative rule.”
Commentary. The WDEA, passed in 1987, has been referred to as the “Montana experiment”
and is “unique in that, while it purports to preserve the ‘at-will’ concept of employment law, it
also expressly sets out three separate bases for a wrongful discharge action.” See Donald C.
Robinson, The First Decade of Judicial Interpretation of the Montana Wrongful Discharge from
Employment Act (WDEA), 57 Mont. L. Rev. 375, 376 (1996). At the time, Montana was the only
state that statutorily modified the well-established employment at-will doctrine. Id. Since the
WDEA’s passage, “the Montana Supreme Court has been solicitous in protecting the rights of
terminated employees who allege, and make a prima facie showing, that their termination was in
retaliation for the employee’s refusal to violate public policy or for reporting a violation of
public policy.” Id. at 390. For example, the Montana Supreme court has held that discharging
an employee for reporting crimes at his or her place of employment violates public policy where
the employee acts as a “good faith whistleblower.” See Krebs v. Ryan Oldsmobile, 843 P.2d
312, 315-16 (Mont. 1992). Moreover, the Montana Supreme Court has also held that with regard
to employment contracts, there is a covenant of good faith and fair dealing “implied as a matter
of law based on the public policy of [Montana].” See Stark v. Circle K. Corp., 751 P.2d 162, 166
(Mont. 1988).
NEVADA
Bielser v. Prof’l Sys. Corp., 177 Fed. Appx. 655 (9th Cir. 2006) – Employee must report
conduct outside of employer to assert wrongful termination claim based on whistleblowing
activities.
Overview. Plaintiff claimed to have discovered that Defendant, her employer, was fraudulently
and illegally charging one of its clients. Plaintiff disclosed Defendant’s activities to
management, including Defendant’s Chief Executive Officer. Subsequently, Defendant
terminated Plaintiff’s employment. Plaintiff brought a claim for wrongful discharge in the
United States District Court for the District of Nevada, which granted summary judgment for
Defendant. Plaintiff appealed to the Ninth Circuit Court of Appeals.
Held. The court affirmed the District Court’s grant of summary judgment for Defendant. The
court rejected Plaintiff’s assertion that she was discharged for whistleblowing activities, holding
that “precedent is clear . . . that unless an employee reports the employer’s allegedly illegal
activity to authorities outside of the company, he or she cannot claim protected whistleblower
status.” Moreover, the court rejected Plaintiff’s argument that “since an employees’ refusal to
participate in illegal conduct without publicly reporting such conduct is sufficient to establish a
claim for tortious discharge, internal reporting of illegal conduct to one’s employer is also
sufficient to establish a case for tortious discharge based on whistleblowing.” The court
reasoned that claims for termination based on whistleblowing activities and termination for
refusal to participate in illegal conduct are two distinct claims under Nevada law.
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OREGON
Lamson v. Crater Lake Motors, Inc., 173 P.3d 1242 (Or. 2007) – Internal complaints of
unlawful sales practices are not of sufficient public importance to support a claim for
wrongful discharge in violation of public policy.
Overview. Plaintiff, a sales manager, was employed by Defendant, a car dealership. Because its
sales were lagging, Defendant hired an outside sales firm to conduct a five-day sales promotion.
Plaintiff was concerned about the outside firm taking over Defendant’s sales office and
determining prices for customers, as well as the firm’s reputation as being “kind of high
pressure.” During the first two and a half days of the sale, Plaintiff witnessed several activities
that he considered to be illegal and/or unethical. On the third day of the sale, Plaintiff reported
his concerns to Defendant’s general manager, who told Plaintiff that he “should just go home
then.” The following week, Defendant held a meeting to discuss the sales promotion, during
which Plaintiff again expressed his concerns. Approximately two months later, Defendant’s
general manager summoned Plaintiff into his office and criticized Plaintiff’s performance and
attitude. Defendant’s general manager also informed Plaintiff that the outside firm that
conducted the first sale would be conducting another one in two months and asked Plaintiff if he
was going to quit instead of participate. Plaintiff responded by telling Defendant’s general
manager that he needed the job and was not going to quit. Within days, Plaintiff sent a letter to
the Defendant’s owner in which he expressed his concerns regarding the previous and upcoming
sales. About one week later, Plaintiff met with Defendant’s owner, who gave Plaintiff a letter
warning him that his failure to participate in the upcoming sale would result in disciplinary
action. Defendant’s owner also encouraged Plaintiff to participate in the sales promotion to
prevent unlawful and unethical conduct. Plaintiff did not show up for the second sale and was
terminated when he returned to work. Subsequently, Plaintiff brought a claim against Defendant
in the trial court for wrongful discharge, alleging that “did not want to participate in the [second
sale] for the reason that the sales tactics employed by [the outside firm] violated public policy
and Oregon law.” Moreover, Plaintiff further alleged that his “[b]y refusing to participate in [the
second sale, Plaintiff] was fulfilling or desiring to fulfill an important societal obligation.” After
the close of evidence following a jury trial, Defendant moved for a directed verdict. The trial
court denied the motion, concluding that whether Defendant discharged Plaintiff because he
performed an important societal obligation was a jury question. The jury returned a verdict for
Plaintiff, and Defendant appealed to the Oregon Court of Appeals.
Held. The court reversed the jury’s verdict and held that plaintiff did not “establish a legally
cognizable basis for a claim for wrongful discharge.” The court noted that although Oregon
normally adheres to the at-will employment doctrine, “the discharge of an at-will employee may
be deemed wrongful (and therefore actionable) under certain circumstances.” According to the
court, those circumstances include (1) when the discharge is for exercising a job-related right
that reflects an important policy; or (2) when the discharge is for fulfilling some important public
duty. The court further noted that an important public duty must be found in constitutional or
statutory provisions or cases, and those provisions or cases must “encourage specific acts or
otherwise demonstrate that such acts enjoy high social value.” Moreover, the court noted that “it
is not enough that those provisions or cases express a general public policy.” In arriving at its
holding, the court reasoned that it could not conclude that Plaintiff’s “internal complaints of
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unlawful sales practices are of the same importance as the reports of health and safety violations
in earlier case law.” Consequently, Plaintiff’s “internal complaints, standing alone, did not serve
an important societal obligation for purposes of a common-law wrongful discharge claim.” In
addition, the court noted that Plaintiff was encouraged to participate in the second sales
promotion to prevent unlawful and unethical conduct, and therefore his argument that he was
refusing to engage in unethical and unlawful sales tactics was unfounded.
Eusterman v. NW Permanente P.C., 129 P.3d 213 (Or. 2006) – To assert a public duty
wrongful discharge claim, a statute must encourage specific acts or such acts must enjoy
high social value.
Overview. Plaintiff worked as a physician for Defendant, a professional corporation consisting
of medical doctors. Defendant benefited financially from having a low number of “time loss
days,” which were days off from work that Defendant’s physicians approved for injured workers
covered by workers’ compensation insurance. Based on Defendant’s emphasis on restricting
patients’ time loss days, Plaintiff felt pressured to allow workers to return work prior to being
ready. Moreover, Plaintiff was also involved in disputes with other physicians with regard to
diagnoses and treatment plans. Eventually, Defendant terminated Plaintiff’s contract. Plaintiff
asserted numerous claims against Defendant in the trial court, which granted summary judgment
for Defendant because Plaintiff failed to identify any public duty or employment-related right
that could be the basis for a wrongful discharge claim and failed to introduce evidence that
Defendant’s decision was motivated for anything other than concerns about Plaintiff’s
performance. Plaintiff appealed to the Oregon Court of Appeals.
Held. The court upheld the trial court’s grant of summary judgment for Defendant and held that
Plaintiff was not discharged for fulfilling a public duty. The court noted that under Oregon law,
“[t]he tort of wrongful discharge stands as an exception to the usual rule that at-will employees
can be discharged for any reason.” Furthermore, the court noted that Oregon courts recognize
two types of wrongful discharge: (1) discharge for exercising a job-related right that reflects an
important public policy and (2) discharge for fulfilling an important public duty. In addition, the
court noted that an important public duty must be found in constitutional or statutory provisions
or case law, and that statues cannot merely express a general public policy; rather, they must
encourage specific acts or otherwise demonstrate that such acts enjoy high social value. The
court reasoned that the statutes on which Plaintiff relied – pertaining to health insurance,
regulation of physicians, and workers compensation – did not “[encourage] the specific acts
identified by [P]laintiff.” Therefore, “[b]ecause plaintiff . . . failed to show that the acts for which
he was terminated constituted performance of a cognizable ‘important public duty,’ the trial
court did not err in entering summary judgment in favor of [Defendants] on the wrongful
discharge claim.”
Love v. Polk County Fire Dist., 149 P.3d 199 (Or. 2006) – A discharge is wrongful when it
stems from an effort by an employer to keep an employee from making a complaint to the
proper authorities.
Overview. Plaintiff was employed as financial secretary for Defendant, a fire district. Plaintiff
had numerous duties, including data entry of training records. After Defendant hired a new fire
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chief, fire service personnel were require to attend at least 75 percent of the training meetings
offered by the district. Plaintiff believed that the training attendance requirement decreased
safety within the fire district. Defendant’s fire chief lowered the training attendance requirement
to 50 percent, but Plaintiff still believed that the lower standard still had a negative affect on
district safety. In addition to her dissatisfaction with the training attendance requirements,
Plaintiff also believed that the district’s training was insufficient, and was particularly concerned
that the members of the committee responsible for training did not have adequate qualifications.
Plaintiff voiced her concerns to many within the fire district, including Defendant’s fire chief.
Plaintiff’s concerns only increased when, during a driver training exercise, a firefighter died.
Defendant conducted an internal investigation, as did the National Institute for Occupational
Safety and Health (“NIOSH”), a federal institute with authority to investigate and research
workplace safety. As NIOSH made arrangements to conduct its investigation, Plaintiff became
convinced that Defendant’s fire chief and deputy fire chief intended to engage in a cover-up.
Plaintiff’s suspicions regarding a cover-up only increased when Defendant’s fire marshal gave
her the impression that he was backdating the district’s standard operating procedures. Plaintiff
immediately confronted Defendant’s fire marshal regarding the backdating. On the day the
NIOSH investigators were to arrive, Defendant’s fire chief terminated Plaintiff’s employment.
Plaintiff brought a wrongful discharge claim in the trial court, alleging that her employment was
terminated because she “expressed concerns about whether or not the firefighters were receiving
proper training” and because she questioned Defendant’s backdating. Defendant filed a motion
for summary judgment, which was granted by the trial court. Plaintiff appealed to the Oregon
Court of Appeals.
Held. The court reversed the trial court and held that there were “genuine issues of material fact
as to [P]laintiff’s allegations that she was discharged for threatened ‘whistleblowing’ about
defendant’s alleged conduct in response to the NIOSH investigation.” In arriving at its holding,
the court noted that discharge of an at-will employee may be deemed ‘wrongful’(1) when the
discharge is for exercising a job-related right that reflects an important public policy or (2) when
the discharge is for fulfilling some important public duty. The court also noted that an important
public duty must be found in constitutional or statutory provisions or case law. Moreover, the
court noted that cases or provisions relied upon must encourage specific acts or otherwise
demonstrate that such acts enjoy high social value. The court held that Plaintiff’s attempt to base
her wrongful discharge claim on being a whistleblower with respect to Defendant’s training
attendance policy and training quality was inadequate. On the other hand, the court held that
Plaintiff’s complaints regarding Defendant’s cover-up leading up to the NIOSH investigation
were sufficient to support an important public duty claim. The court reasoned that NIOSH was
furthering an important, statutorily-rooted public interest by “investigating the circumstances of a
fatal workplace accident.” The court further reasoned that Plaintiff met her burden by
demonstrating that “(1) her belief that [D]efendant was engaging in a [cover-up] was objectively
reasonable and (2) her discharge was causally related to her complaints about the [cover-up] to”
Defendant’s marshal and others. In sum, “a discharge is wrongful when it stems from an effort
to keep an employee from making a complaint to the proper authorities.”
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WASHINGTON
Wahl v. Dash Point Family Dental Clinic, Inc., 181 P.3d 864 (Wash. 2008) – Washington’s
public policy against gender discrimination can support a wrongful discharge claim where
sexual harassment occurs.
Overview. Plaintiff, formerly unpaid intern, was hired as a paid employee by a dental clinic.
Within months of beginning her employment, one of the clinic’s dentists (“Dentist”) began
making inappropriate and sexually explicit comments to Plaintiff. As time passed, Dentists’
comments increased in frequency and graphicness. Moreover, the clinic’s office manager
(“Office Manager”) also had similar experiences with Dentist, who also propositioned her for
sexual acts. One Monday, Dentist told Plaintiff that he wanted her to watch him masturbate;
Dentist later lured Plaintiff into the clinic’s darkroom where he masturbated while Plaintiff had
her back to him. As the week proceeded, Dentist became increasingly critical of Plaintiff’s
work. The following Monday, Plaintiff left her job. Dentist then directed Office Manager to
write a letter denying that any sexual misconduct occurred between the Office Manager and
Dentist. Moreover, Dentist directed Office Manager to write numerous reprimand letters,
backdate the letters, and place them in Plaintiff’s personnel file. Plaintiff brought a claim for
wrongful discharge in violation of Washington’s public policy against gender discrimination
against Dentist and the clinic. After the conclusion of a bench trial, a judge found for Plaintiff
and awarded her $20,000 in damages. Defendants appealed to the Washington Court of Appeals.
Held. The court upheld the lower court’s verdict and held that Dentist “violated Washington’s
policy against gender discrimination when he sexually harassed [Plaintiff], that this behavior led
to [Plaintiff’s] constructive discharge, and thus, [Plaintiff] was wrongfully discharged in
violation of public policy.” The court articulated the elements Plaintiff was required to prove in
order successfully assert a claim for wrongful discharge in violation of public policy: (1) the
existence of a clear public policy (the “clarity element”); (2) that discouraging the conduct in
which Plaintiff engaged would jeopardize the public policy (the “jeopardy element”); (3) the
public policy-linked conduct caused Plaintiff’s dismissal (the “causation element”); and (4) that
Defendants did not establish an overriding justification for Plaintiff’s dismissal (the “absence of
justification element”). The court reasoned (1) that Washington had a statute that indicated a
“clear mandate of policy against sex discrimination;” (2) that discouraging Plaintiff’s decision to
quit would jeopardize Washington’s public policy against gender discrimination because that
policy “favors rebuffing unwanted sexual advances in the workplace where engaging in sexual
activity negatively impacts productivity, employment stability, and client care;” (3) that “a
rational trier of fact could conclude that [Dentist’s] . . . behavior created working conditions so
intolerable that [Plaintiff] reasonably felt compelled to resign;” and (4) that Dentists alleged
overriding justification for Plaintiff’s dismissal, Plaintiff’s poor performance, was invalid
because he directed Office Manager to write reprimand letters after Plaintiff was dismissed and
backdate them.
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Danny v. Laidlaw Transit Servs., Inc., 193 P.3d 128 (Wash. 2008) – Washington’s clear
public policies regarding protection of domestic violence survivors and their children and
holding domestic violence perpetrators accountable can support a wrongful discharge
claim.
Overview. Plaintiff was employed by Defendant as a scheduling manager. While working for
Defendant, Plaintiff experienced continuous domestic violence at the hands of her husband. In
February 2003, plaintiff left her home after experience significant physical abuse, but could not
take her children with her. In June 2003, Plaintiff informed her manager about her husband’s
abuse. In August 2003, Plaintiff asked for time off in order to move her children away from her
husband. Plaintiff’s manager refused her request at first, but after Plaintiff’s husband beat her
teenage son so badly that he had to be hospitalized, Plaintiff’s manager approved paid time off so
that Plaintiff could move her children to a shelter. During Plaintiff’s paid time off, she assisted
with her husband’s prosecution and obtained necessary social services. Plaintiff returned to
work shortly after September 8, 2003, and nearly one month later, on October 9, 2003,
Defendant demoted Plaintiff. On December 3, 2003, Defendant terminated Plaintiff’s
employment, allegedly for falsification of payroll records. Months later, Plaintiff brought a
claim against Defendant for wrongful termination in violation of public policy. Defendant
sought to dismiss Plaintiff’s claim by filing a motion for judgment on the pleadings. The trial
court stayed its decision and certified a question to be addressed by the Washington Supreme
Court, which the court reformulated as follows: “Has the State of Washington established a clear
mandate of public policy of protecting domestic violence survivors and their families and
holding their abusers accountable?”
Held. The court held that Washington has a clear public policy of protecting domestic violence
survivors and their children and holding domestic violence perpetrators accountable. With
respect to the clarity element of a claim for wrongful termination in violation of public policy,
the court set forth numerous bases establishing that Washington public policy clearly supported
Plaintiff’s actions. Among those bases, the court noted that Washington’s legislature passed
both the Domestic Violence Act and the Domestic Violence Prevention Act, both of which
sought to address domestic violence, its prevention, and its consequences. Moreover, according
to the court, “the legislature has expanded domestic violence protection in Washington and
highlighted the need for community involvement.” Furthermore, the court noted that the
“legislature has been equally adamant in demanding protection for child victims of family
violence such as [Plaintiff’s] . . . son.” In addition legislative initiatives, the court provided
examples of executive, constitutional, and judicial expressions of public policy that supported
Plaintiff’s actions. Having answered the reformulated certified question, the court returned the
case to the trial court.
Gaspar v. Peshastin Hi-Up Growers, 128 P.3d 627 (Wash. 2006) – Washington has a clear
public policy of encouraging cooperation with law enforcement that supports an exception
to at-will employment.
Overview. Plaintiff was employed by Defendant as its general manager. A detective contacted
Plaintiff regarding one of Defendant’s other employees, who illegally purchased postage stamps
at reduced prices from a defective post office vending machine. The employee admitted to
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purchasing the stamps from the broken machine, and eventually paid the post office back by
altering a pre-typed check. Plaintiff reported the employee’s illegal conduct to Defendant’s
board, and on several occasions, Plaintiff met with the detective and a prosecutor regarding the
lawbreaking employee. Within two days of his last meeting with law enforcement officials,
Defendant’s board voted to terminate the employee who engaged in wrongdoing, but dismissed
Plaintiff as well. Thereafter, Plaintiff brought a claim for wrongful termination in violation of
public policy against Defendant in which he alleged that he was discharged as a result of
reporting the employee’s illegal conduct and cooperating with law enforcement. Defendant filed
a motion to dismiss, arguing that Plaintiff failed to state a claim. Plaintiff filed a motion for
reconsideration, which the trial court denied because Plaintiff failed to establish a clearly
mandated public policy that encourages helping law enforcement. The trial court granted
Defendant’s motion, and Plaintiff appealed to the Washington Court of Appeals.
Held. The court reversed the trial court’s granting of summary judgment for Plaintiff. The court
held that Washington has a clear public policy of encouraging cooperation with law enforcement,
and therefore Plaintiff “satisfied his burden of proving the clarity element of his claim for
wrongful discharge in violation of public policy.” The court reasoned that several Washington
statutes evinced a “limited, albeit clear public policy encouraging citizens to cooperate with law
enforcement when requested.” These statutes include one that states that witnesses and victims
of crimes have a civic and moral duty to cooperate fully with law enforcement and prosecutors; a
second statute that gives citizens who aid police the same civil and criminal immunity as the
police; a third statute that makes it a crime to willfully obstruct a police officer from discharging
his or her duties; and a fourth statute that makes it a crime to unreasonably refuse to comply with
an officer’s request to summon aid. The court further reasoned that “recognition of a public
policy to assist law enforcement is fundamental” and cited the Illinois Supreme Court’s assertion
that, “There is no public policy more basic, nothing more implicit in the concept of ordered
liberty, than the enforcement of the State’s criminal code. There is no public policy more
important or more fundamental than the one favoring the effective protection of the lives and
property of citizens.”
Korslund v. Dynacorp Tri-Cities Servs., Inc., 125 P.3d 119 (Wash. 2005) – The Federal
Energy Reorganization Act cannot be the foundation for a wrongful termination in
violation of public policy claim.
Overview. Steven Korslund (“Korslund”) and Virginia Miller (“Miller”) (collectively
“Plaintiffs”) were employed by Defendant at a nuclear facility. Beginning in 1997, Plaintiffs
made numerous complaints – verbally and in writing – regarding a number of issues, including:
health and safety issues, abuse of overtime, abuse of work hours, misuse of government funds,
nepotism, improper gifting of equipment, improper use of government property, and threats and
retaliation against them for reporting. According to Plaintiffs, they were harassed, threatened,
and mistreated by co-workers and managers, and retaliated against for making their complaints.
Plaintiffs claimed that these actions resulted in them suffering physical and emotional injury.
Eventually, Korslund was placed on disability by a psychologist at the nuclear facility, and a
physician placed Miller on medical disability. Plaintiffs discontinued working for Defendant
without quitting or resigning, and each brought a claim for wrongful discharge in violation of
public policy. Defendant moved for summary judgment, which was granted by the trial court.
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Plaintiffs appealed to the Washington Court of Appeals. The appellate court reversed the trial
court’s dismissal of Korslund’s wrongful discharge claim, holding that Korslund did not have to
formally quit or resign to show constructive discharge. However, the appellate court affirmed
dismissal of Miller’s claim. Defendant petitioned the Washington Supreme Court for
discretionary review, which was granted.
Held. The court affirmed the appellate court in addressing the issue of “whether a claim of
wrongful constructive discharge in violation of public policy can be brought where the employee
‘permanently leaves’ the job on medical leave but does not quite or resign,” the court held that
Plaintiffs did not present sufficient evidence to prove that Defendant’s conduct jeopardized
public policy. Regarding the clarity element of a claim for wrongful discharge in violation of
public policy, the court held that the federal Energy Reorganization Act (ERA), which makes it
unlawful for an employer to retaliate against an employee who reports violations of that
legislation, manifested “a clear public policy encouraging and protecting [Plaintiffs’] right to
report without fear of retaliation and reprisal.” However, with regard go the jeopardy element,
the court held that the ERA provides “comprehensive remedies that serve to protect the specific
public policy identified by” [Plaintiffs]. Specifically, the ERA provides an administrative
process for adjudicating whistleblower complaints, reinstatement of the complainant, back pay,
compensatory damages, and attorney and expert fees. Therefore, because Plaintiffs failed to
meet their burden of showing that “other means of promoting the public policy are inadequate,”
as a matter of law Plaintiffs’ wrongful discharge in violation of public policy claims failed.
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COLORADO
Bonidy v. Vail Valley Center for Aesthetic Dentistry, 186 P.3d 80 (2008) – Denial of rest and
lunch breaks where public health, safety, or welfare concerns are proven implicates public
policy supporting a wrongful discharge claim.
Overview. Plaintiff Bonidy was a dental hygienist working for Defendant VVCAD and
Dr. Harding, beginning in 1998. Over the course of time, Harding, the dentist, severely limited
staff breaks, eventually restricting Plaintiff from leaving the office while on break, except to use
the restroom and eliminating rest and lunch breaks unless a patient cancelled. After her husband
complained, Bonidy was fired. Bonidy filed a complaint for wrongful discharge in violation of
public policy based on not receiving rest or lunch breaks in violation of Wage Order 2, sections 7
and 8, promulgated by the Colorado Department of Labor and Employment. Cf. Wage Order
No. 23, 7 Code Colo. Regs. 1103-1 (effective from Apr. 1, 2007 until Jan. 1, 2008, when Wage
Order No. 24 takes effect; sections 7 and 8 of all three wage orders are the same). A jury trial
was held, but ended when the trial court granted Defendant’s motion for a directed verdict,
finding Defendant had violated provisions of the two administrative rules, but dismissing
Plaintiff’s claim of wrongful discharge and exemplary damages.
Plaintiff asserts that the trial court erred in dismissing her wrongful discharge claim by
determining that it was a question of law whether Wage Order 22 constituted a clearly expressed
public policy and by ruling that Wage order 22 did not give rise to a private cause of action.
Held. The court held that the trial court did not err when it held that whether Wage Order 22
constituted a clearly expressed public policy is a question of law and found that Wage order 22
gives rise to a private cause of action. The court also reversed summary judgment on Plaintiff’s
claim for exemplary damages. As to the question of whether the identification of statutory
provisions that express a clear public policy is a question of law or fact, the court relied on
Flores v. Am. Pharm. Servs., Inc., 994 P.2d 455, 457 (Colo.App.1999), which found it is an issue
for judicial determination.
The wage order in effect at the time of these occurrences exempted certain professional
employees, but section 5, and sections 1(D) and 2(D) specifically included dental office
employees. Based on this purposeful inclusion, the court concluded the wage order stated a
clearly expressed public policy. The trial court relied on Plaintiff’s job description and applied
Crawford [Rehab. Servs., Inc. v. Weissman, 938 P.2d 540 (Colo.1997) ], (where the plaintiff was
denied rest breaks), in concluding Bonidy did not have a cause of action. Here, the court
distinguished Crawford in reversing the trial court’s decision, finding the plaintiff in Crawford,
as a typist, did “not allege any public health, safety, or welfare concern, and we discern no
clearly expressed public policy relating to an employee’s basic rights or duties.” Id. at 553
(footnote omitted). In the instant case, Plaintiff was denied both rest breaks and lunch breaks
and her job duties included performing work with patients, including assisting the dentist and
passing sharp objects over patients heads, taking x-rays and preparing cementation mixtures,
thereby implicating public safety. The court found that Bonidy presented evidence sufficient to
take her claim to a jury.
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Slaughter v. John Elway Dodge SouthWest/Autonation, 107 P.3d 1165 (2005) – Not all
statutes relating to public policy concerns will support a wrongful discharge tort claim. A
public policy is not undermined where an employer maintains a previously established
written drug policy and directs an employee to take a drug test.
Overview. Plaintiff Slaughter worked for Defendant John Elway Dodge SouthWest/Autonation
for about 1 year (in which she was promoted and given a raise) when she was informed that her
drug test result had been overlooked when she was hired. The results showed the presence of
marijuana and she was asked to retake the test. When the results came back as inconclusive, she
was again asked to submit to another test, when she refused, she was told she would be
terminated.
Around one month later, Plaintiff filed a motion for a temporary restraining order and served a
copy on her employer’s counsel. The following week her attorney received notice that Plaintiff
had been terminated as of the date the motion was filed. The court did not enter a restraining
order, but scheduled a preliminary injunction hearing. Plaintiff withdrew her motion for a
temporary restraining order and filed a complaint alleging that her termination was in retaliation
for her motion for a temporary restraining order, violating public policy as expressed in the
Freedom of Legislative and Judicial Access Act (Act), § 8-2.5-101, C.R.S.2004 and alleging the
termination was wrongful because it was retaliation for her refusal to submit to the drug test and,
thus, violated public policy against private interference with her right to privacy. Both
complaints were dismissed by the trial court for failure to state a claim for which relief could be
granted.
Held. The court affirmed the dismissal of both claims, concluding that there is no public policy
exception entitling an at-will employee to refuse to comply with an employer’s previously
existing written drug testing policy. The court noted that under Rocky Mountain Hosp. & Med.
Serv. v. Mariani, 916 P.2d 519, 525 (Colo.1996) it was clearly established that it is acceptable
for an employer to have a written drug policy and to terminate an employee as the result of a
drug test showing the presence of marijuana in the employee’s system during working hours.
The court applied the standard established in Martin Marietta Corp. v. Lorenz, 823 P.2d 100
(Colo. 1992), to conclude that an employer with a previously established written drug policy who
directs an employee to take a drug test does not undermine public policy relating to the
employee’s rights as a worker.
Additionally, the court found no basis to conclude that the Freedom of Legislative and Judicial
Access Act § 8-2.5-101 stated a clearly expressed a public policy forbidding an employer from
terminating an employee for filing a motion or a lawsuit against the employer.
Jaynes v. Centura Health Corp., 148 P.3d 241, 244 (Colo.App.2006) – A public policy
exception to the at-will employment rule can be based on sources other than state statutes.
Overview. Plaintiff was employed by Defendant Centura Health Corporation (Centura) as a
nurse. Jayne was suspended for two specific incidents at work. After the first incident, she
claimed to have submitted an occurrence report regarding the patient’s treatment to the hospital’s
Quality Assurance Committee. Plaintiff wrote denials of the incidents and later submitted an
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“action plan” where she asserted that she had been acting as a patient advocate as was her ethical
obligation as a nurse. Plaintiff was then terminated. Plaintiff filed a claim for wrongful
discharge based on retaliation for her actions in furtherance of her ethical duties as a nurse.
Defendant’s motion for summary judgment on Plaintiff’s claims of termination in violation of
public policy and breach of implied contract was granted and Plaintiff appealed.
Held. The court held that both claims were disposed of properly by summary judgment.
Colorado law presumes employment to be at-will unless a contract provides otherwise. Cont’l
Air Lines, Inc. v. Keenan, 731 P.2d 708 (Colo. 1987). Common law exceptions to this
presumption include the two issues in this case: public policy and implied contract or promissory
estoppel. Crawford Rehab. Servs., Inc. v. Weissman, 938 P.2d 540 (Colo. 1997).
Here, the court clarifies that public policy need not emanate exclusively from a statute. Rules of
Professional Conduct binding all members of a profession that could result in professional
discipline if not followed can also form the basis of a public policy exception. Rocky Mountain
Hospital & Medical Service v. Mariani, 916 P.2d 519, 524 & 526 (Colo. 1996). In the instant
case, the court found that the sources of professional conduct relied upon by Plaintiff did not
meet the standards set forth in Mariani, as the organizations she cites are purely private and not
all nurses are subject to their rules.
In Martin Marietta Corp. v. Lorenz, 823 P.2d 100 (Colo. 1992), the court set out four elements
of a public policy wrongful discharge case:
the employer directed the employee to perform an illegal act or prohibited the employee
from performing a public duty or exercising an important job-related right or privilege;
2. the action directed by the employer would violate a specific statute relating to the public
health, safety, or welfare, or would undermine a clearly expressed public policy relating
to the employee’s basic responsibility as a citizen or the employee’s rights or privileges
as a worker;
3. the employee was terminated as a result of refusing to perform the act directed by the
employer; and
4. the employer was aware, or reasonably should have been aware, that the employee’s
refusal to comply with the order was based on the employee’s reasonable belief that the
action ordered by the employer was illegal, contrary to clearly expressed statutory policy
relating to the employee’s duty as a citizen, or violative of the employee’s legal rights or
privileges as a worker.
1.
Plaintiff also contended that her discharge was violative of public policy because it falls under
the Colorado Quality Management statute § 25-3-109, C.R.S. 2005. Again the court disagrees,
finding as a matter of law that the statute does not support a wrongful discharge claim based on
public policy. In their analysis of this assertion, the court applied the elements set fourth in
Lorenz and found Plaintiff has failed to meet the prima facie case for wrongful discharge.
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KANSAS
Gonzalez-Centento v. North Central Kansas Regional Juvenile Detention Facility, 278 Kan.
427101 P.3d 1170 (2004) – An employee may assert a claim of wrongful discharge against
an employer other than the employer against whom a worker’s compensation claim has
been filed.
Overview. Plaintiff Gonzales-Cento worked two jobs. After he filed for worker’s compensation
claim against one employer, his other employer, Defendant North Central Kansas Regional
Juvenile Detention Facility, terminated him. Plaintiff filed a claim for retaliatory discharge
against Defendant. The trial court overruled Defendant’s motion requesting judgment on the
pleadings and later denied defendant’s motion for summary judgment.
Held. The court affirmed the trial court’s ruling, which recognized a retaliatory discharge claim
based upon these circumstances. Kansas recognizes that termination based on filing a worker’s
compensation claim is grounds for a retaliatory discharge claim. The question here is whether a
retaliatory discharge claim can be brought against an employer other than the employer against
whom the worker’s compensation claim has been filed is a matter of first impression and as such,
required the court to look to other jurisdictions for direction.
The court found that this question had been answered in the affirmative by the majority of courts
that have considered the issue. See e.g., Darnell v. Impact Industries, Inc., 105 Ill.2d 158, 85 Ill.
Dec. 336, 473 N.E.2d 935 (1984) (where the majority, in recognizing her cause of action, agreed
with the argument “that the evil resulting from the discharge of an employee for having filed a
workers’ compensation claim against a prior employer is as great as if the discharge had been
effected by the prior employer.” 105 Ill.2d at 161, 85 Ill.Dec. 336, 473 N.E.2d 935, Nelson Steel
Corp. v. McDaniel, 898 S.W.2d 66 (Ky.1995)898 S.W.2d at 68-69 (where the Kentucky court
majority concluded that the public policy expressed in the statutory provision does not embrace
economic discharge), Goins v. Ford Motor Co., 131 Mich.App. 185, 347 N.W.2d 184 (1983),
(where the Michigan Court of Appeals held that Goins stated a cognizable claim against Ford,
his current employer, for retaliatory discharge because he filed a workers compensation claim
against his former employer, General Motors), Phillips v. Butterball Farms, 448 Mich. 239, 531
N.W.2d 144 (1995), (where the Michigan Supreme Court agreed with the Goins panel and held
that an action for retaliatory discharge for filing a worker’s compensation claim sounds in
tort . . . because the employer’s duty not to retaliate stems from public policy rather than an
implied promise by the employer).
The court was persuaded by the reasoning of the courts in other jurisdictions which found that
public policy was implicated in similar circumstances, and recognized a cause of action for
retaliatory discharge where a worker is terminated by an employer other than the employer
against which he has made a worker’s compensation claim.
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Hysten v. Burlington N. Santa Fe. Ry. Co., 277 Kan. 551, 85 P.3d 1183, 1189-91 (Kan.2004),
as modified by, 277 Kan. 551, 108 P.3d 437, 444-45 (Kan.2004) – A Federal Employers
Liability Act claim invokes the same public policy considerations as a claim under the
state’s Worker’s Compensation Law and can be the basis for a wrongful discharge tort
action. The Kansas Alternative Remedies Doctrine does not preclude an employee covered
by the Railway Labor Act from pursuing a Kansas Tort Action against an employer when
the employee was terminated in retaliation for his exercise of rights under FELA.
Overview. Plaintiff Hysten was terminated as a railroad employee by Defendant Burlington
Northern Santa Fe Railway Company, but was reinstated. After his reinstatement, he brought
this action against Defendant, claiming it retaliated against him because he filed a Federal
Employer’s Liability Act (FELA) claim, asserting that such retaliation constituted a public policy
tort under Kansas Law. The action was removed from state court to federal court. The United
States District Court for the District of Kansas, 196 F. Supp.2d 1162, granted railroad’s motion
to dismiss for failure to state a claim under Kansas law. Employee appealed. The United States
Court of Appeals for the Tenth Circuit then presented two certified questions to the Kansas
Supreme Court:
1. Independent of the Kansas alternative remedies doctrine, does Kansas law, including but not
limited to Flenker v. Willamette Industries, Inc., 266 Kan. 198, 967 P.2d 295 (1998); Palmer v.
Brown, 242 Kan. 893, 752 P.2d 685 (1988); Riddle v. Wal-Mart Stores, Inc., 27 Kan.App.2d 79,
998 P.2d 114 (2000); and Murphy v. City of Topeka, 6 Kan.App.2d 488, 630 P.2d 186 (1981),
recognize an action in tort based on an employer’s discharge of an employee in retaliation for the
employee’s exercise of rights under the Federal Employers Liability Act (FELA), 45 U.S.C. § 51
et seq. (2000)? In other words, will the Kansas Supreme Court extend the public policy
exception to the at-will employment doctrine to authorize a state tort action retaliation for filing a
FELA claim?
2. If the answer to (1) is yes, under the Kansas doctrine of alternative remedies-as articulated in
Flenker, 266 Kan. 198, 967 P.2d 295; Coleman v. Safeway Stores, Inc., 242 Kan. 804, 752 P.2d
645 (1988); or elsewhere-do the remedies available in the Railway Labor Act (RLA), 45 U.S.C.
§ 151 et seq., (2000) preclude an action in tort based on an employer’s discharge of an employee
in retaliation for the employee’s exercise of rights under FELA? In other words, are an
employee’s rights adequately protected by the RLA, the statute that governs the employment
relationships in the railway industry?
Held. The court answered question one in the affirmative, reasoning that a FELA claim invoked
the same public policy considerations as a claim under the state’s Worker’s Compensation law,
which the court has previously held can be the basis for a wrongful discharge tort. The court
found that, regardless of whether FELA or the Kansas Workers Compensation Act was the basis
of a worker’s attempt at recovery, the underlying public policy would be undermined if the
worker could be fired for the exercise of his or her statutory right. Such a situation effectively
releases an employer from the obligation of the statute. See Murphy v. City of Topeka-Shawnee,
6 Kan.App.2d 488, 495-96, 630 P.2d 186 (1981). The court stated that it will not always be the
case where a state and federal law both clearly serve a clearly expressed public policy of the state
of Kansas, but that here, it is the case. Still, this does not mean a tort cause of action exists
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automatically where a federal statute is at issue, if an adequate alternative remedy exists, a state
tort cause of action is not called for.
The court answered question two in the negative, holding that the Kansas alternative remedies
doctrine does not preclude an employee covered by the Railway Labor Act from pursuing a
Kansas tort action against an employer when the employee was terminated in retaliation for his
exercise of rights under the Federal Employers Liability Act. The court found that the Plaintiff’s
remedy under the FELA is not an adequate alternative remedy compared to that afforded by a
retaliatory discharge action under Kansas tort law.
Heckman v. Zurich Holding Company of America, 242 F.R.D 606 (D. Kan 2007) – An
attorney employed as in-house counsel can maintain a public policy whistleblower
retaliatory discharge claim.
Overview. Plaintiff Heckman, an attorney, was employed as in-house counsel by Defendant
Zurich Holding Company (Zurich). Plaintiff alleged that she was terminated because she
reported illegal activity being engaged in by Zurich. Heckman brought a claim against
Defendant and claimed retaliatory discharge and defamation. The instant case is a result of
Defendant’s motions for judgment on the pleadings and for a protective order. Defendant’s
theory is that Plaintiff should not be allowed to assert a retaliatory discharge claim because
proving such a claim will require the disclosure of confidential information gained during her
employment. Defendant also argued that allowing an in-house counsel to assert a retaliatory
discharge complaint is inappropriate because no public policy concern is implicated.
Held. The court finds that Plaintiff may proceed with her claim for retaliatory discharge,
overruling Defendant’s motion, and may reveal confidential information only to the extent
necessary under the Kansas Rules of Professional Conduct, Rule 1.6(b)(3). This question has not
come before Kansas courts, but the court cited numerous cases from other jurisdictions and
determined that the majority of courts that have dealt with this issue have found a retaliatory
discharge claim will stand as long as confidentiality concerns are addressed. To bolster its case,
Defendant relies on Crandon v. State, 257 Kan. 727, 897 P.2d 92 (1995), where the court found
“closeness and trust” are vital to the relationship between an employer and in-house counsel.
The court found their argument unconvincing, stating they found nothing in that case that would
preclude a retaliatory discharge claim by an in-house attorney.
As to the public policy question, the court again found that the majority of other jurisdictions
faced with this question found in favor of allowing a retaliatory discharge claim where an inhouse attorney engaged in whistleblowing activity. Because the court believed Kansas courts
would find in favor of a whistleblower claim for Plaintiff, the court overruled Defendant’s
motion for judgment on the pleadings.
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Taylor v. Home Depot USA Inc., 506 F. Supp.2d 504 (D. Kan. 2007) – Reporting violations
of internal company policy does not support a whistleblowing retaliatory discharge claim
based in public policy.
Overview. Plaintiff Taylor was employed by Defendant Home Depot, USA, Inc. (Home Depot)
and intended to spend her career there. Taylor claimed that she was terminated in retaliation for
her participation in an internal investigation relating to certain members of management, (where
she provided information relating to her position as a scheduler) and for refusing to perform
personal errands for her manager. Home Depot contended that Plaintiff was terminated because
she committed a serious violation of work rules by favoring her husband and others in her role as
scheduler, a violation of the company’s Code of Conduct. Relating to the retaliatory discharge
claim, Defendant contended that Taylor was not a whistleblower because she never actually
reported any alleged illegal actions by her employer, but rather provided information at the
request of an internal investigator and was unable to prove anyone involved in her termination
had any knowledge of her involvement in the internal investigation. Defendant admitted that
Plaintiff did report a violation of store policy.
Held. The court found that, as a matter of law, Plaintiff’s claim of retaliatory discharge failed
and granted summary judgment to Defendant. Plaintiff was unable to prove the prima facie case
of a public policy whistleblowing retaliatory discharge claim because she failed to show a public
health, safety or general welfare issue rules or laws had been violated. Palmer v. Brown, 242
Kan. 893, 752 P.2d 685 at 689. Reporting internal failures to follow an employer’s policies does
not implicate such laws or rules.
Estate of Pingree v. Triple T Foods, Inc., 430 F. Supp.2d 1226 (D. Kan. 2006) – Termination
based on the exercise of voting rights as a board member is not protected public policy
conduct implicating a public policy exception to the at-will employment doctrine.
Overview. This suit was brought by Gary Pingree’s estate, which consist of his wife and two
daughters. Decedent Pingree was a board member and the Chief Financial Officer of Triple T
Foods, Inc., TTF and had a contentious business relationship with Chris Terlip, one of the two
stockholders in the company. After siding with Kurt Terlip, the other partner in TTF, and voting
to sell the company, Pingree was left out in the cold when the stockholders agreed he would be
terminated and that their company would never hire him again. Pingree was terminated, but Kurt
Terlip promised to keep him on as a consultant and to continue to maintain his health and life
insurance policies. Among other claims, Plaintiff asserted a claim of retaliatory discharge
against Pingree’s former employer claiming that he was terminated for his good faith vote
regarding the sale of TTF. TTF argued that there is no public policy exception inhibiting
shareholder’s ability to terminate company directors based on how they vote.
Held. The court granted summary judgment on Plaintiff’s retaliatory discharge claim, finding
there is no public policy basis to plaintiff’s retaliatory discharge claim. In Kansas, there are only
two accepted public policy exceptions to at-will employment: 1.) when an employee is
terminated for exercising rights under the workers compensation laws and 2.) when an employee
is discharged for a good faith report or threat to report a serious infraction of rules, regulations,
or law pertaining to the public health, safety, and the general welfare by a co-worker or employer
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(whistleblowing).” Riddle v. Wal-Mart Stores, Inc., 27 Kan.App.2d 79, 85, 998 P.2d 114, 119
(2000). The Kansas Supreme Court also has recognized a public policy exception where an
employee is terminated for exercising rights under the Federal Employers Liability Act
(“FELA”), 45 U.S.C. § 51et seq. See Hysten v. Burlington N. Santa Fe Ry. Co., 277 Kan. 551,
85 P.3d 1183 (2004), as modified, 277 Kan. 551, 108 P.3d 437 (2004).
To prevail on its retaliatory discharge claim, Pingree’s estate must show that its claim falls under
a previously recognized exception to at-will employment or that the conduct is protected by
Kansas public policy on which their retaliatory discharge claims are based and that they have no
alternative state or federal remedy. See Harris v. Bd. of Pub. Util. of Kan. City, Kan.,
757 F. Supp. 1185, 1194 (D.Kan.1991). Plaintiff cites no authority which recognizes their claims
as an exception to the employment at-will doctrine. Additionally, Plaintiff can seek redress
under state law for breach of contract, which provides an adequate remedy. See Lines v. City of
Ottawa, Kan., No. 02-2248-KHV, 2003 WL 21402582, at *10 (D.Kan. June 16, 2003) (no state
law retaliatory discharge claim had adequate remedy under KAAD); Polson v. Davis,
635 F. Supp. 1130, 1149-50 (D.Kan.1986) (no public policy exception for sex discrimination and
retaliation because of existing alternative remedy), aff’d, 895 F.2d 705 (10th Cir.1990).
Litton v. Maverick Paper Co., 354 F. Supp.2d 1209 (2005) – Sexual harassment does not
implicate a public policy concern on which a retaliatory discharge claim can be based
because adequate remedies to sexual harassment in the workplace exist.
Overview. Plaintiffs Litton, et al. brought a claim for wrongful discharge against Defendant
Maverick Paper Company asserting federal discrimination claims and state wrongful termination
and retaliatory discharge claims, among others. Sherri and Ronald Litton were both employed
by Maverick. S. Litton was terminated after complaining of exposure to pornographic material
on work computers and on company property, including company vehicles. Her termination was
couched in terms of a company-wide restructuring program, but she was the only employee laid
off. Her termination was because of her sex and in retaliation for her reporting pornography at
work. At the time of her dismissal, under the shareholder’s agreement, her shares of stock
should have been redeemed, but the Maverick breached that agreement. R. Litton was also
demoted for reporting the pornography on a certain employee’s computer. This demotion caused
him to lose benefits and income. Upon his demotion, he too was entitled under the shareholder’s
agreement to redemption of his stock. When R. Litton informed Maverick’s new Chief
Operating Officer that he was going to file a discrimination complaint with the EEOC, his
personal service contract was terminated.
Held. The court dismissed Plaintiffs’ state retaliatory discharge claim, but left their Title VII
retaliatory discharge claim intact. Plaintiffs’ claim of retaliatory discharge in violation of public
policy was based on the theory that the state of Kansas has a recognized public policy in favor of
eliminating sexual discrimination in the work environment. However, Kansas recognizes only
two public policy exceptions to the employment at-will doctrine 1.) Where an employee is
terminated for the exercise of worker’s compensation (and FELA) rights (See Hysten v.
Burlington N. Santa Fe Ry. Co., 277 Kan. 551, 85 P.3d 1183 (2004), as modified, No. 90,730,
2004 WL 3142558 (June 1, 2004).) and 2.) where an employee is terminated for whistleblowing
activity. Riddle v. Wal-Mart Stores, Inc., 27 Kan.App.2d 79, 85, 998 P.2d 114, 119 (2000).
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Plaintiff’s claims fall into neither category and Plaintiffs do not cite any authority recognizing
their theory as a protected conduct supporting a retaliatory discharge claim. Plaintiffs also fail to
show they lack and adequate alternative remedy. See Harris v. Bd. of Pub. Util. of Kansas City,
Kan., 757 F. Supp. 1185, 1194 (D.Kan.1991). Plaintiffs have a remedy under Title VII and the
Kansas Acts Against Discrimination, K.S.A. § 44-101 et seq.
Hughes v. Keath, 328 F. Supp.2d 1161 (D. Kan. 2004) – Termination Based On The
Exercise Of The Right Not To Incriminate Oneself Is Not Protected Public Policy Conduct
Implicating A Public Policy Exception To The At-Will Employment Doctrine.
Overview. Plaintiff Hughes was terminated from his position as a deputy sheriff. His employer,
Defendants Keath, the County Sheriff, and Theising, the County Attorney, assert he was
terminated because he committed perjury in the course of an investigation. Hughes filed a
grievance with the Board of County Commissioners and requested information so he could
pursue an EEO grievance. Plaintiff claimed wrongful termination, defamation, and other claims.
Defendant seeks to have the wrongful termination dismissed based on the fact that Hughes has
failed to allege facts sufficient to challenge the presumption that he was an at-will employee.
Plaintiff asserts that his termination violated public policy because it done in retaliation for
Plaintiff’s exercise of his rights and privileges, here, the right to refuse to incriminate himself.
Held. Plaintiff does not assert that he was terminated for either of the public policy exceptions
permitted by Kansas law, thus the court found Plaintiff did not have a cognizable wrongful
termination claim. Kansas has limited the actions for retaliatory discharge in violation of public
policy to situations where an employee is terminated for exercising his rights under the worker’s
compensation laws or where an employee is terminated for reporting or asserting he will report
serious lapses by the employer of rules, laws, or regulations relating to public health, safety and
general welfare (whistleblowing). See Riddle v. Wal-Mart Stores, Inc., 27 Kan.App.2d 79, 85,
998 P.2d 114, 119 (2000). Hughes’ claim does not fall into either of the permitted categories and
he fails to prove that his claim is based on some other conduct protected by Kansas public policy.
Plaintiff has an alternative remedy the defamation claim for any damage to his reputation in a
state defamation claim. Hughes is prohibited from implicating the Board of Commissioners in
his wrongful termination claim because the Sheriff has the authority to hire, promote and
terminate his deputies under the authority given him by the legislature.
NEW MEXICO
Weise v. Washington Tru Solutions, L.L.C., 144 N.M. 867, 192 P.3d 1244 (2008) – An
employee whose employment relationship is governed by a collective bargaining agreement
cannot bring a wrongful discharge cause of action, even where termination based on
whistleblowing is alleged.
Overview. Plaintiff Weise was an active member and shop steward of the Paper, AlliedIndustrial, Chemical & Energy Workers (PACE) whose employment terms were governed by a
collective bargaining agreement. Plaintiff filed two grievances with the union, claiming
retaliation on the part of his employer relating to his union membership and unjust discipline
after he was suspended. While the second grievance was pending, he was terminated by his
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employer, Washington Tru Solutions. Plaintiff filed a complaint in state court alleging
retaliation for whistle blowing (Plaintiff had made complaints regarding safety violation and
unsafe practices at WTS), defamation and IIED. Plaintiff later amended his complaint to include
a claim of wrongful discharge based on his claim that his safety complaints were
“whistleblowing” and that they lead to his being disciplined and ultimately to retaliatory
discharge. Both parties filed motions for summary judgment. Plaintiff’s motion was denied and
Defendant’s motion was granted. Plaintiff appealed to the Court of Appeals of New Mexico.
Held. The Court of Appeals of New Mexico affirmed the lower court’s summary judgment in
favor of WTS, finding that the IIED and defamation claims were preempted by the NLRA. The
court did not have to determine whether the retaliatory discharge was also preempted under the
NLRA because Weise was a member of a union whose employment terms were governed by a
Collective Bargaining Agreement and New Mexico employment law does not permit a
retaliatory discharge claim under these circumstances.
The employment at-will doctrine allows an employer to discharge employees at-will unless there
is an express contract limiting its right to do so. See Silva v. Am. Fed’n of State, County & Mun.
Employees, 2001-NMSC-038, ¶ 10, 131 N.M. 364, 37 P.3d 81. New Mexico recognizes a
“whistleblowing” exception to the at-will doctrine, which allows an at-will employee who claims
he has been terminated for reporting unsafe working conditions a cause of action for retaliatory
discharge against his employer. See id. ¶¶ 10-11; Gutierrez v. Sundancer Indian Jewelry, Inc.,
117 N.M. 41, 48-50, 868 P.2d 1266, 1273-75 (Ct.App.1993). The right to bring a retaliatory
discharge claim is limited to at-will employees. Silva, 2001-NMSC-038, ¶¶ 12, 21, 131 N.M.
364, 37 P.3d 81; Vigil v. Pub. Serv. Co. of N.M., 2004-NMCA-085, ¶¶ 5-7, 136 N.M. 70, 94 P.3d
813 (holding that the defendant was entitled to summary judgment on the plaintiff’s retaliatory
discharge claim because the plaintiff was not employed at-will and therefore could not bring a
claim for retaliatory discharge).
Despite Plaintiff’s claim that he was terminated because he reported public safety concerns, he is
barred from bringing a retaliatory discharge claim. Plaintiff is not an at-will employee, his
employment relationship is dictated by the collective bargaining agreement and he is protected
from wrongful discharge by this contract.
OKLAHOMA
Eapen v. McMillan, 196 P.3d 995 (2008) – There is no clear public policy mandate to impose
liability on an individual for a Burk tort discharge.
Overview. Defendant McMillan was Plaintiff Eapen’s supervisor. Plaintiff asserts McMillan
made racial slurs and discriminatory references to Eapen, an East Indian, gave him a lesser
transfer bonus, and interfered with promotions, culminating in Plaintiff’s termination for
complaining about the discrimination he was being subjected to. Eapen filed a petition alleging
race and national origin discrimination under a public policy wrongful discharge tort theory
against Defendant, in violation of 25 O.S.2001 §§ 1101, et seq., a Burk-tort, and a claim for
tortious interference. McMillan filed a motion to dismiss, which the trial court granted with
prejudice and without leave to amend. Eapen appealed.
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In his motion to dismiss, Defendant claims Eapen failed to exhaust administrative remedies and
was out of time to do so. McMillan claims he was not Plaintiff’s employer, and contended only
an employer can breach a public policy tort. Defendant also argued Eapen was judicially
estopped from claiming McMillan was his manager at Dell for purposes of Plaintiff’s federal
case and while claiming he was the employer for the state cause of action. McMillan also
contends an adequate statutory remedy prevented Eapen from also bringing a Burk tort action.
McMillan asserts Eapen’s public policy Burk tort claim cannot extend to include individual
liability under Burk. According to McMillan, the public policy tort can only be asserted against
the employer, which in this case was Dell.
Eapen argues that Oklahoma’s Anti-Discrimination Act expressly provides for individual
liability 25 O.S.2001 § 1301 and added the “agent of such a person,” language in the Oklahoma
Anti-Discrimination Act (OADA) with the Oklahoma Supreme Court’s pronouncement in
Saint v. Data Exch., Inc., 2006 OK 59, 145 P.3d 1037, for the proposition that all persons
covered under the OADA must have uniform remedial measures available to them. Plaintiff
asserts that race and national origin plaintiffs may sue individuals under the OADA.
Held. The court disagrees and finds no “clear mandate” of public policy in imposing individual
liability for tort discharge under § 1301 and Saint, finding that nothing exists in Burk or its
progeny to enlarge the concept of “employer” so far.
Vasek v. Board of County Commissioners of Noble County, 186 P.3d 928 (2008) – OOHSSA
states public policy supporting a wrongful discharge case for whistleblowing.
Overview. Plaintiff Vasek was employed as a deputy court clerk by Defendant, and worked for
the Noble County Court Clerk, Mills. Recurrent floods caused damage to the court clerk’s office.
After one such flood in 2000, two anonymous complaints were made to the Department of Labor
(DOL) in which concern was expressed about mold and a sewer smell at the courthouse. These
calls prompted an unannounced inspection. Plaintiff was fired approximately nine months after
the DOL complaint. No explanation for her termination was stated, but Plaintiff found that the
county had opposed her unemployment benefits, claiming the termination was for
“insubordination and habitual tardiness.” Defendant asserts Plaintiff left her post on one
occasion and was habitually tardy. Plaintiff’s employment file shows 5 warnings for tardiness
from 1988 to 1996.
Plaintiff brought this action for wrongful termination claiming that she was really terminated for
making a complaint to the DOL concerning mold at the courthouse and asserts that, as a
whistleblower terminated in violation of public policy, she had a wrongful discharge claim under
Burk v. K-Mart Corp., 1989 OK 22, 770 P.2d 24. Employer moved for summary judgment and
the trial court granted the motion, holding that Plaintiff’s claim was legally and factually
insufficient to overcome summary judgment, categorizing Plaintiff’s position as “statutory” and
finding that Burk did not apply to her. That court further reasoned that the two sources of public
policy asserted by Plaintiff, the Oklahoma Occupational Health and Safety Standards Act, Okla.
Stat. tit. 40, §§ 401-435 (2001 & Supp.2007), and the Oklahoma Personnel Act, Okla. Stat. tit.
74, §§ 840-1.1 through 840-7.1 (2001 & Supp.2007), did not apply to her and therefore could not
provide a statement of Oklahoma policy for her Burk claim.
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The Court of Civil Appeals affirmed on Employer’s argument, finding that section 1983
provided an adequate statutory remedy for Plaintiff and therefore, Burk was not applicable to her
case.
Held. The court reversed and remanded the trial court’s decision and vacated the Court of Civil
Appeals’ opinion. The court found that the trial court erred in granting summary judgment as a
matter of law in finding that the claim presented no disputed issue of fact. The matter must be
remanded for trial of the issue of whether retaliation was a significant factor in Plaintiff’s
discharge.
The court found Plaintiff’s acts in the instant case clearly implicated public policy. The court
found that the Oklahoma Occupational Health and Safety Standards Act (OOHSSA), Okla. Stat.
tit. 40, §§ 401-435 (2001 & Supp.2007), contains public policy language that applies to the kind
of conduct that forms the basis of Plaintiff’s Burk claim, but that it provides no statutory remedy
for an employer’s violation of the provision.
The court also noted that the whistleblower provision of OOHSSA mirrors the “Whistleblower
Act” which provides internal and external whistleblower protection to classified and unclassified
state employees. Okla. Stat. tit. 74, § 840-2.5 (Supp.2007). That protection extends to the
reporting of “a substantial and specific danger to public health or safety.” Id. § 840-2.5(B)(2).
The OOHSSA whistleblower provision extends protection similar to the Whistleblower’s Act to
those employed by the state’s political subdivisions, including county employees like Plaintiff.
Darrow v. Integris Health, Inc., 176 P.3d 1204 (2008) – Whistleblowing to protect public
interests rather than private interests implicates Oklahoma public policy.
Overview. Plaintiff Darrow brought suit against his employer, Defendant Integris Health, Inc.,
claiming he was subject to a retaliatory termination and wrongfully discharged in breach of the
public policy of the State of Oklahoma. Plaintiff’s duties included billing for Medicare
reimbursement. In the course of his duties he became aware of irregularities with regard to the
circumstances surrounding one of Defendant’s customers. Plaintiff investigated and reported
these issues to the Quality Assurance Supervisor. Darrow was terminated five days later for
alleged HIPAA violation during the course of his review of the patients chart.
Plaintiff filed an amended petition asserting that his termination was in retaliation for reporting
the irregularities with the patient’s records. The trial court dismissed Plaintiff’s amended
petition for failure to state a claim upon which relief may be granted. The Court of Civil
Appeals affirmed the lower court’s ruling.
Held. The Court of Civil Appeals erred in affirming the trial judge’s decision granting
Defendant’s motion to dismiss the action for failure to state a claim upon which relief can be
granted. In his certiorari petition, plaintiff alleges that his reports to Integris management about
possible falsification of submitted to Medicare, Medicare fraud and concerns about patient safety
invoke Oklahoma public policy considerations and are therefore remedial under Burk. Plaintiff
bases his claim on federal statutes, state statues and state judicial decisions.
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Here, Plaintiff relies in part on federal statutes to support his Burk tort claim (Burk v. K-Mart
Corp.,), citing Tyler v. Original Chili Bowl, Inc., 1997 OK CIV APP 3, 934 P.2d 1106 (where
the Court of Civil Appeals stated that a discharge alleged to result from reporting violations of
the federal Food, Drug, and Cosmetic Act, 21 U.S.C.A. § 301 et seq. did fall within the
parameters set forth by Burk). Plaintiff compares his actions to whistleblowing and distinguishes
Hayes v. Eateries, Inc., 1995 OK 108, 905 P.2d 778, (where an employee discharged for
reporting embezzlement by a coworker was found to lack standing for a Burk claim because the
court found he had acted not in furtherance of the general public, but out of loyalty to his
employer).
In the instant case, which involves Oklahoma state statutes relating to home health care standards
and corporate fraud, the court finds that it is irrelevant that the Medicare statute is a federal law.
The court states that Oklahoma criminal law is implicated and recourse must be provided for
those who claim to be discharged because they reported a violation. The court determined that
plaintiff’s claim fell within the scope of this kind of protected activity, that it had public impact
and is therefore actionable within the Burk framework.
The court does limit its holding, however, stating that it should not be read to imply that any
report of illegal or unsafe activity by an employer will sustain a Burk claim; such a claim is
implicated in the instant case because of the pervasive public interest in violation of public
health, safety, and welfare.
Shero v. Grand Savings Bank, 161 P.3d 298 (2007) – The public policy basis for a retaliatory
discharge claim must touch on the employment relationship.
Overview. Plaintiff Shero was employed by Defendant Grand Savings Bank and was terminated
for refusing to discontinue his participation in a lawsuit against one of the Bank’s customers.
Plaintiff filed a claim for wrongful discharge based on his assertion that under the Open Records
Act, 51 O.S.2001, § 24A.1 et seq. his termination was in violation the public policy of
Oklahoma. Defendant moved to dismiss the claim and the trial court granted their request.
Plaintiff appealed.
Held. The court affirmed the trial court’s decision, finding that the public policy exception to the
Burk tort was not invoked by the Open Records Act, holding that, because the Open Records Act
is silent regarding any aspect of the employment relationship, it does not contain a clear mandate
of public policy and as such Defendant did not violate any public policy by firing Plaintiff for his
refusal to dismiss his claims against a third party pursuant to the Open Records Act.
The Open Records Act expressly enunciates the public policy regarding people’s right to know
and be fully informed about their government, but it is silent as to any public policy against
conditioning continued employment on the abandonment of claims made under the act to the
Act. It is the second public policy statement which must be deducible from the Act in order for a
plaintiff to state a claim under the limited Burk tort public policy exception to the
employment at-will doctrine. See Pearson v. Hope Lumber & Supply Co., 1991 OK 112, 820
P.2d 443, 445.
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The Bank’s decision to terminate Shero upon his refusal to give up his claims against his
employer’s customer was a private business decision that does not implicate public policy
concerns. See Hayes v. Eateries, Inc., 1995 OK 108, 905 P.2d 778, 786-88 (holding an
employee’s reporting and investigating of criminal activity committed against the employer by
employee’s supervisor is not imbued with the necessary clear and compelling public policy
sufficient to state a Burk tort claim).
Morehouse v. State, 150 P.3d 395 (2006) – Even an unclassified employee has a remedy
under OPA for age discrimination, precluding an action for retaliatory discharge.
Overview. Plaintiff was an at-will (unclassified) employee of Defendant Oklahoma City
Community College (OCCC). He was discharged and filed suit for wrongful termination based
on age discrimination. OCCC moved for a dismissal on the grounds that plaintiff failed to state a
claim because Plaintiff had a remedy available under Oklahoma Personnel Act (OPA), 74
O.S.2001, §§ 840-1.1et seq. The availability of a statutory remedy precludes the assertion of a
Burk tort. Clinton v. State ex rel. Logan County Election Bd., 2001 OK 52, ¶ 10, 29 P.3d 543,
546. The trial court dismissed Morehouse’s action.
Held. The court affirmed the lower court’s dismissal of his Burk tort claim, finding Plaintiff
failed to prove that he fulfilled the elements of a Burk tort claim because an adequate statutory
remedy is available to him under OPA.
The court discussed McCrady v. Oklahoma Department of Public Safety, 122 P.3d 473 (2005),
which established that the OPA provides a remedy which precludes a Burk tort for “classified”
employees. Plaintiff argues that OPA does not apply to him due to his status as “unclassified,”
but OPA provides that unclassified employees are not covered by the Act “unless otherwise
provided.” 74 O.S.2001, § 840-5.1. (footnote omitted). There are provisions for OPA
application to unclassified employees in matters involving age discrimination. 74 O.S.2001,
§ 954.(footnote omitted). In addition, an Attorney General Opinion concludes that the antidiscrimination and whistle blower provisions of the OPA apply to the unclassified employee.
1999 OK AG 44.
Saint v. Data Exchange, Inc., 2006 OK 59, 145 P.3d 1037 (2006) – Age discrimination is a
public policy basis for a wrongful discharge tort cause of action.
Overview. The United States District Court for the Northern District of Oklahoma certified this
question: Is there either an implied statutory remedy or a common-law Burk tort remedy for state
age discrimination claims arising under the operation of the Oklahoma Constitution, Art. 5 § 46
and the provisions of the Oklahoma Anti-discrimination Act, 25 O.S. §§ 1101, et seq. and
§ 1901?
Saint, a 58 year old woman was terminated. In defense of a motion to dismiss her state claim,
Plaintiff argues that under the Oklahoma Anti-discrimination Act, 25 O.S. §§ 1101, et seq. there
exists a unified class of persons who are the victims of discrimination, be it because of handicap,
race, gender or age discrimination, who require equal remedies under Art. 5 § 46. Plaintiff
asserts that the remedy under the ADEA, 29 U.S.C. §§ 621 et seq., is not adequate for victims of
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age discrimination because it grants less relief than provided for disabled victims discrimination
under 25 O.S. 1901., and that, therefore, the ADEA does not provide a Constitutionally adequate
remedy for victims of discrimination.
Held. The court holds that age-discrimination victims are part of the broad employment
discrimination class, and must be afforded the same rights as the other members of the class.
The court found that that there is a wrongful discharge, Burk tort, (Burk v. K-Mart Corp.,
1989 OK 22, 770 P.2d 24) remedy for those who allege employment age discrimination. The
court explains that this question has been dealt with in reference to those discriminated against
based on race and sexual harassment and was also answered in the affirmative. See Collier v.
Insignia Financial Group, 1999 OK 49, 981 P.2d 321, and Tate v. Browning-Ferris, Inc., 1992
OK 72, 833 P.2d 1218.
Boyles v. AG Equipment Co., 506 F. Supp.2d 809 (N.D. OK. 2007) – Under Saint v. Data
Exchange, Incorporated, a Burk tort claim can be raised along with an ADEA claim.
Overview. Plaintiff Boyles, a 59-year-old white male, alleges he was terminated based on his
age. Plaintiff worked for Defendant AG Equipment Co. (AG) for about sixty days. Plaintiff was
hired by the shop superintendent, but the owner of the company commented to Plaintiff that he
was too old to work in the area he had been hired into and there was some confusion as to his
role in the company. At the end of his probationary period, Boyles was terminated. Plaintiff
claimed he was terminated in violation of the Age Discrimination in Employment Act (ADEA)
and in violation of Oklahoma public policy. In a separate action; the Equal Employment
Opportunity Commission (EEOC) seeks damages for Plaintiff and injunctive relief (prohibiting
AG from committing further acts of age discrimination). The two cases have been consolidated.
Defendant moved for summary judgment on the ADEA claim and the wrongful discharge claim.
Held. The court denied AG’s motion for summary judgment on both claims based on the recent
case of Saint v. Data Exchange, Incorporated, 145 P.3d 1037 (Okla.2006), which held “Agediscrimination victims are part of the employment discrimination class, and as such must be
afforded the same rights as the other members of the class. Therefore we find that there is a Burk
tort remedy for those who allege employment age discrimination.” Saint, 145 P.3d 1037 at 1039.
Plaintiff’s claim for wrongful termination is based on AG’s violation of the public policy of
Oklahoma under the Oklahoma Anti-discrimination Act, OKLA. STAT. tit. 25, § 101. A claim
for wrongful termination in violation of public policy is known under Oklahoma law as a Burk
tort (Burk v. K-Mart Corporation, 770 P.2d 24 (Okla.1989). Oklahoma Supreme Court decisions
in List v. Anchor Paint Manufacturing Company, 910 P.2d 1011 (Okla.1996) and Clinton v. State
of Oklahoma ex rel. Logan County Election Board, 29 P.3d 543 (Okla.2001), have settled the
law among Oklahoma federal district courts that a Burk tort is not available in employment
discrimination cases due to the existence of adequate federal remedies. See, e.g., Bolin v. Okla.
Conference of the United Methodist Church, 397 F. Supp.2d 1293, 1299 (N.D.Okla.2005) (Title
VII); Hale v. MCI, Inc., No. CIV-04-1297, 2006 WL 223829, at * 2 (W.D.Okla. Jan. 25, 2006)
(ADEA).
Plaintiff argues that a recent Oklahoma Supreme Court case, Saint v. Data Exchange,
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Incorporated, 145 P.3d 1037 (Okla.2006), changes this rule and holds that a Burk tort is now
available in an age discrimination case. The Oklahoma Supreme Court answered a certified
question from the Northern District of Oklahoma, which asked whether there is “a common-law
Burk tort remedy for state age discrimination claims arising under the operation of the Oklahoma
Constitution ... and the ... Oklahoma Anti-discrimination Act.” Id. The Oklahoma Supreme
Court answered in the affirmative:
The court stated it will follow the decisions in Oklahoma federal district courts, interpreting
Saint to hold that a Burk tort claim may be brought along with an ADEA claim. See Seeber v.
Williams Companies, No. 04-CV-451-CVE, 2006 WL 2524249 (N.D.Okla. Aug.28, 2006) and
Rutty v. Equi-Management Svcs., Ltd., No. CIV-05-1272-F (W.D.Okla. Jan. 9, 2007).
Bolin v. Oklahoma Conference of the United Methodist Church, 307 F. Supp. 2d 1293 (N.D.
OK. 2005) – Where an adequate federal statutory remedy exists, no wrongful termination
claim can be maintained.
Overview. Plaintiff Bolin worked for Defendant Oklahoma Conference of the United Methodist
Church as an administrative assistant who believed her supervisor was sexually harassing her.
She filed claims intentional infliction of emotional distress, unlawful termination in violation of
Oklahoma public policy, sexual harassment and retaliation in violation of Title VII of the Civil
Rights Act of 1964, and slander. Defendant moved for summary judgment.
Held. The court granted Defendant’s request for summary judgment, finding Plaintiff has a
federal statutory remedy under Title VII which adequately protects the public policy Oklahoma
has against gender discrimination. See 42 U.S.C. § 2000 et seq.
Plaintiff’s wrongful termination claim is based upon defendant’s alleged violation of the
Oklahoma Anti-Discrimination Act (OADA). The OADA provides no private right of action to
persons alleging employment discrimination based on gender. See Tate v. Browning-Ferris, Inc.,
833 P.2d 1218, 1229 (Okla.1992). Even so, Plaintiff contends that the OADA states a clear
public policy goal which allowing her to assert a Burk tort claim. See Burk v. K-Mart Corp.,
770 P.2d 24, 28 (Okla.1989), (where the Oklahoma Supreme Court found a public policy
exception to the employment at-will doctrine in cases where an employee is exposed to adverse
treatment contravening important Oklahoma public policy goals.)
In Collier v. Insignia Fin. Group, 981 P.2d 321 (Okla.1999), the Oklahoma Supreme Court
considered whether a Burk public policy tort claim for gender discrimination could be advanced
in light of the remedies available under state anti-discrimination laws and held that the
administrative remedy provided by the OADA was inadequate to fully vindicate the rights of
gender discrimination victims. Id. at 326. The Oklahoma Supreme Court determined that
victims of quid pro quo sexual harassment could assert a state law tort claim under Burk.
The Oklahoma Supreme Court examined the issue of whether an adequate federal remedy
disallowed a state law tort claim under Burk for gender discrimination in Clinton v. Oklahoma,
ex rel., Logan County Election Board, 29 P.3d 543 (Okla.2001). In Clinton, the plaintiff tried to
amend her complaint and add a public policy tort claim for gender discrimination based on the
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OADA. Id. at 544. The Oklahoma Supreme Court determined that the plaintiff was not eligible
to bring a Burk tort claim because an adequate federal statutory remedy was available to her as
there was an effective federal statutory remedy available to protect both the plaintiff and
Oklahoma’s public policy goals. Id. at 546. Viewing this holding along with List v. Anchor
Paint Mfg. Company, 910 P.2d 1011 (Okla.1996), and Marshall v. OK Rental & Leasing, Inc.,
939 P.2d 1116 (Okla.1997), the court found that the remedy provided by Title VII fulfilled the
adequacy requirements of the Oklahoma Supreme Court. The court held that Title VII provides
an adequate remedy for Bolin’s alleged discrimination, and that as a matter of law she may not
assert a public policy tort for the alleged gender discrimination.
UTAH
Touchard v. La-Z-Boy Inc., 148 P.3d 945 (2006) – Retaliatory discharge for filing a
Workers’ Compensation claim violates a clear and substantial public policy, but public
policy is not implicated where mere harassment or discriminatory treatment results from
filing a Worker’s Compensation claim or to employees retaliated against for opposing an
employer’s treatment of other employees entitled to claim workers’ compensation benefits.
Overview. Plaintiff Touchard worked for Defendant La-Z-Boy. She complained repeatedly
about the treatment being received by employees who applied for workers compensation benefits
and about other issues she felt existed relating to the handling of workers’ compensation claims
and other issues. Plaintiff was fired while out on maternity leave and filed a lawsuit claiming
wrongful discharge. The Supreme Court of Utah accepted the following questions of
certification from the United States District Court for the District of Utah.
1.
Whether the termination of an employee in retaliation for the exercise of rights under the
Utah Workers’ Compensation Act ... implicates a ‘clear and substantial public policy’ of
the State of Utah that would provide a basis for a claim of wrongful termination in
violation of public policy.” If we conclude that it does, the federal court then asks
whether the cause of action applies when:
a. “the employee is not fired but resigns under circumstances that constitute a
‘constructive discharge’”;
b. “the employee who has filed for benefits under the [Workers’ Compensation Act]
is neither fired nor constructively discharged, but experiences other
discriminatory treatment or harassment from an employer”; or
c. “the employee has not filed for benefits under the [Workers’ Compensation Act]
but is retaliated against for opposing an employer’s treatment of other injured
employees who are entitled to file for benefits under the [Act].”
Held. The court had not yet examined the issue of whether retaliatory discharge for filing a
workers’ compensation claim is covered by one of the public policy categories’, noting it was
mentioned as an example of a violation of category iii) in the prima facie case of wrongful
discharge (the exercise of a legal right or a privilege), however this alone does not mean that a
clear and substantial public policy has been established for the purposes of the exception to the
at-will rule. Hansen v. America Online, Inc., 2004 UT 62, ¶ 10, 96 P.3d 950.
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The court held that retaliatory discharge for filing a workers’ compensation claim violates the
clear and substantial public policy of this state; thus, an employee who has been fired or
constructively discharged in retaliation for claiming workers’ compensation benefits has a
wrongful discharge cause of action. The court declined to extend this cause of action to an
employee who has only been subjected to harassment or discrimination or to employees
retaliated against for opposing an employer’s treatment of other employees entitled to claim
workers’ compensation benefits. The court finds that the public is the intended beneficiary of the
legislation relating to workers’ compensation claims, not only the employer and employee
involved, implicating a clear and substantial public policy. The court further conducts a
balancing test to compare the public policy against the employer’s (La-Z-Boy) interests. The
court found that allowing employers to fire employees who make workers’ compensation claims
can have no social advantage.
The court declined to extend the wrongful discharge cause of action to retaliatory harassment or
discrimination because the elements of the tort of wrongful discharge are, by definition, not
satisfied. The first element states that the employee must have been terminated by his
employer Ryan v. Dan’s Food Stores, Inc., 972 P.2d 395, 404 (Utah 1998) (emphasis added)
(footnotes omitted). Further, the court declines to create a new cause of action for retaliatory
harassment or discrimination.
A wrongful discharge cause of action does not extend to an employee who opposes her
employer’s treatment of other employees who are entitled to worker’s compensation benefits.
The court found that since the employees on whose behalf she was complaining did not have a
cause of action, neither did Plaintiff.
Hansen v. America Online, Inc., 96 P.3d 950 (2004) – Where an employee’s exercise of a
legal right or privilege implicates public policy, the interests of the employer in maintaining
his business objectives must be balanced against the interest of the employee’s ability to
access his statutory and constitutional rights.
Overview. Former employees Hansen, Melling and Carlson were terminated after violating the
company’s posted Workplace Violence Prevention Policy, which prohibited weapons in the
workplace, including the parking area reserved exclusively for AOL’s use. Plaintiffs met in the
reserved parking lot outside of their work hours before going shooting at a target range. Each
employee had a firearm in his car and, when they transferred the weapons, a security camera
caught the activity. The employees were fired four days later for violating the company weapons
policy. Plaintiffs filed a lawsuit for wrongful termination, claiming their possession of firearms
in the company’s parking lot was protected by a clear and substantial public policy. Both
Plaintiffs and defendant filed motions for summary judgment. AOL’s motion was granted and
Plaintiffs appealed.
In Utah, employment law presumes an at-will employment relationship. This general rule is
fully integrated in Utah common law. See Fox, 931 P.2d at 859; Brehany v. Nordstrom, Inc.,
812 P.2d 49, 53-54 (Utah 1991); Berube v. Fashion Ctr., Ltd., 771 P.2d 1033, 1044 (Utah 1989);
Bihlmaier v. Carson, 603 P.2d 790, 792 (Utah 1979). Public policy exception law is still
developing. The court has resisted applying the exception broadly and has determined four
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categories of public policy that it will consider under the exception: 1.) refusing to commit an
illegal or wrongful act 2.) performing a public obligation 3.i) exercising a legal right or privilege
or 4.) reporting to a public authority criminal activity of the employer. Ryan v. Dan’s Food
Stores, Inc., 972 P.2d 395, 408 (Utah 1998) (citations omitted).
Held. The Supreme Court of Utah affirmed the lower court’s grant of summary judgment to
Defendant. Here the issue falls under category three, the exercise of a legal right or privilege.
Where this is the case, the interests of the employer in maintaining its business objectives and the
interests of the employee in his ability to access his statutory and constitutional rights in the
workplace must be balanced, as both employer and employee have recourse appealing to the
standards of public policy in their cause. The court looked to statutory exceptions to the right to
bear arms as well as to the history of the Uniform Firearms Law, Utah Code Ann. §§ 63-98-101,
-102 (2004), holding that the right to keep and bear arms is not a clear and substantial public
policy that supersedes an employer’s right to restrict weapons in the workplace by contract.
WYOMING
Hoflund v. Airport Golf Club, 105 P.3d 1079 (2005) – Where a separate administrative
remedy exists, a wrongful discharge action in tort will have no basis.
Overview. Plaintiff Hoflund was employed intermittently as a bartender and manager for
defendant Airport Golf Club (AGC). Hoflund reported sexually harassing behavior by a
coworker and as a result of the investigation AGC implemented a written sexual harassment
policy which included a clause to prevent retaliation against anyone reporting such harassment.
After repeated issues with balancing her cash drawer, a meeting to discuss them resulted in her
termination. Hoflund filed a complaint, in part asserting a retaliatory discharge claim and AGC
moved for summary judgment. The court granted summary judgment finding that Hoflund had
not provided any bargained for consideration regarding the sexual harassment policy and
therefore, her employment remained at-will. Plaintiff appealed the grant of summary judgment.
Held. The Supreme Court of Wyoming upheld the lower court’s summary judgment decision on
all claims, finding that, with regard to the retaliatory discharge claim that Hoflund cannot bring a
claim for retaliatory discharge before exhausting all available administrative remedies, the court
has consistently held that the exhaustion of available administrative remedies must occur before
judicial relief may be available. In Wyoming, judicial action is withheld until the administrative
process has run its course. Bender v. Greer, 996 P.2d 671, 673 (Wyo.2000); Routh v. State
ex rel. Workers’ Compensation Division, 952 P.2d 1108, 1115 (Wyo.1998), cert. denied,
525 U.S. 814, 119 S. Ct. 49, 142 L.Ed.2d 38 (1998) both citing Wagoner, 924 P.2d at 91). In the
instant case, Plaintiff has a potential remedy under FEPA, The Wyoming Fair Employment
Practices Act of 1965, § 27-9-101 et seq., W.S.1977 (June 1983 Replacement), and 42 U.S.C.
§ 2000e et seq. (1982) which provide Hoflund with a remedy for discharge based on sex
discrimination. The court does not agree with Plaintiff’s contention that sexual harassment is not
covered under FEPA.
In Allen v. Safeway Stores, Inc., 699 P.2d 277 (Wyo.1985), the court held that if another remedy
for violation of a social policy which resulted in the discharge of an employee exists, no separate
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tort action will lie. The court has stated that where a tort action is based on a violation of public
policy, the action is appropriate where allowing a discharge under those circumstances would
allow a valuable social policy to go unvindicated. If another remedy for violation of the social
policy that lead to the employee’s termination, there is no need for a separate tort action based on
public policy. Viestenz v. Fleming Companies, Inc., 681 F.2d 699 (10th Cir.1982), cert. denied,
459 U.S. 972, 103 S. Ct. 303, 74 L.Ed.2d 284; Mahoney v. Crocker National Bank, 571 F. Supp.
287, (D.C.Cal.1983).
The court does not reach the question of whether public policy issue was implicated here because
it found Plaintiff failed to exhaust the administrative remedies available to her before bringing
suit.
CIRCUIT COURT OF APPEALS
Hysten v. Burlington Northern Santa Fe Railway Company, 530 F.3d 1260 (10th Cir. 2008) –
A public policy retaliatory discharge claim exists and is sufficient to overcome a Rule
50(b) motion when an employee is discharged in anticipation of filing a FELA claim.
Overview. This case was decided applying Kansas law. Plaintiff Hysten was employed as a
mechanic by Defendant Burlington Northern Santa Fe Railway Company (Burlington Northern)
when he injured his back. He was unsure whether the injuries occurred at work, but eventually
he did claim they were work related. His report of the injury as work related triggered Hysten’s
rights under Employers’ Liability Acts, § 1 et seq., 45 U.S.C.A. § 51 et seq. (FELA). The
railroad started an investigation and held a hearing, which lead to Plaintiff’s termination.
Hysten’s union appealed the termination under the collective bargaining agreement and Railroad
Labor Act (“RLA”), 45 U.S.C.A. §§ 151-188 and Plaintiff was reinstated with seniority, but
without back pay to “give him, as a long time employee, one last chance. Shortly after returning
to work, Plaintiff filed a retaliatory discharge action against Burlington Northern. The case was
removed to federal court where it was dismissed because the federal court did not believe Kansas
courts would extend the retaliatory discharge public policy exception to at-will employment to
an action under FELA. See Hysten v. Burlington N. Santa Fe Ry. Co., 196 F. Supp.2d 1162,
1170 (D.Kan.2002).
Plaintiff appealed and, at that time, the court submitted two certified questions to the Kansas
Supreme Court. In response, the Kansas Supreme Court held that Kansas recognizes a common
law tort of retaliatory discharge for the exercise of rights under FELA and that the remedies
available to aggrieved employees under the RLA are not adequate alternative remedies
precluding a retaliatory discharge claim in tort. See Hysten v. Burlington N. Santa Fe. Ry. Co.,
277 Kan. 551, 85 P.3d 1183, 1189-91 (Kan.2004), as modified by, 277 Kan. 551, 108 P.3d 437,
444-45 (Kan.2004).
Based on the Kansas Supreme Court’s response, the court reversed the district court’s order
dismissing the case. On remand, Burlington Northern moved for summary judgment arguing
preemption of Hysten’s retaliatory discharge claim, which the court denied. Plaintiff prevailed
and the jury awarded him back pay and compensatory and punitive damages.
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The lower court denied Defendant’s motion for a judgment as a matter of law under Fed.R.Civ.P.
50(b). Defendant appealed the jury verdict.
Held. The court affirmed the jury’s decision, finding that evidence of retaliatory intent was
introduced in addition to the evidence of close temporal proximity and concluded that Plaintiff
put forth circumstantial evidence sufficient to allow a reasonable jury to discount Burlington
Northern’s explanations for Plaintiff’s termination. Because a reasonable jury could find that
Defendant’s actions were partially prompted by a desire to retaliate, the court found the district
court did not err in denying Burlington Northern’s Rule 50(b) motion.
Kansas courts apply a burden shifting framework in analyzing retaliatory discharge cases.
Plaintiff can establish a prima facie case by demonstrating that: (1) a claim was filed under
FELA, or an injury sustained for which he a future FELA claim may be asserted; (2) the
employer knew of the plaintiff’s FELA claim or work-related injury for upon which the
employee might base a FELA claim; (3) the employer discharged Plaintiff; and (4) there is a
causal connection between the protected activity or injury and the termination. See Foster v.
Alliedsignal Inc., 293 F.3d 1187, 1193 (10th Cir.2002) (retaliatory discharge for filing workers’
compensation claim); Sanjuan v. IBP, Inc. (Sanjuan I), 160 F.3d 1291, 1298 (10th Cir.1998)
(same). If Plaintiff is able to establish a prima facie case, then Defendant then has the
opportunity to assert his non-retaliatory explanation for the termination, if successful, Plaintiff
then has to show he was terminated in retaliation for exercising his rights under FELA. See
Bausman v. Interstate Brands Corp., 252 F.3d 1111, 1116 (10th Cir. 2001).
The court noted that it believes the holding in Gonzales-Cento relating to the possibility that a
worker’s compensation claim will be fired can be extrapolated to terminations in situations
where there is an intent or possibility a FELA claim will be as under Gonzalez-Centeno. See
Gonzalez-Centeno v. N. Cent. Kan. Reg’l Juvenile Det. Facility, 278 Kan. 427, 101 P.3d 1170,
1173 (Kan.2004) (“workers compensation public policy exception has been extended to include
the possibility that a worker’s compensation claim will be filed”; Chrisman v. Philips Indus.,
Inc., 242 Kan. 772, 751 P.2d 140, 142 (Kan.1988) (extending tort of retaliatory discharge to
situation where employee is terminated for intending to file workers’ compensation claim).
Sikkenga v. Regence BlueCross BlueShield of Utah, 472 F.3d 702 (10th Cir. 2006) – A clear
and substantial public policy concern can be found in reports made under the Fair Claims
Act.
Overview. This case was decided applying Utah law. Plaintiff Sikkenga worked for Defendant
Regence BlueCross BlueShield. Regence is the Medicare carrier for the state of Utah.
Plaintiff’s job duties included reviewing claims submitted by medical service providers.
Sikkenga complained internally that a lab owned by the University of Utah Medical Center
(ARUP) was submitting false claims for Medicare reimbursement and that Regence was not
taking appropriate action to put an end to the alleged fraud. Plaintiff filed this action against
both Regence and several management employees at Regence, and ARUP as a qui tam relator
under the False Claims Act (FCA) 31 U.S.C. § 3729(a). Plaintiff also brought an FCA
whistleblower claim as an individual and several state causes of action.
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Held. The court reversed the lower court’s dismissal of Sikkenga’s wrongful termination claim,
finding that because the lower court had erred in holding that Regence was immune under
42 U.S.C. § 1395u(e) and that Sikkenga failed to allege a clear and substantial public policy
concern. The court reversed the dismissal of the wrongful termination claim. The court found
that a violation of the FCA represented an allegation of a violation of public policy sufficient to
stand as an element of the prima facie case for wrongful termination.
In Rackley v. Fairview Care Ctrs., Inc., 23 P.3d 1022 (Utah 2001), the court found that, under
Utah law, a clear and substantial public policy must be articulated in order for the public policy
exception to the at-will employment doctrine to be implicated. “The public policy exception to
the employment at-will presumption is much narrower than traditional notions of public policy,”
and is to be narrowly construed. Id. at 1026-27. A clear statement of public policy is derived
from one of the following sources: (1) legislative enactments, (2) constitutional standards, or
(3) judicial decisions. A public policy is only considered to be substantial where its importance
extends to the public, rather than only to the parties involved. Id. at 1027. A question of law
exists as to whether a clear and substantial public policy exists that supports an employee’s
wrongful termination claim. Id. at 1026.
Here, the court found Plaintiff did allege a public policy concern adequate to withstand dismissal
of her claim.
Bastible v. Weyerhauser Company, 437 F.3d 999 (10th Cir. 2006) – The right to bear arms is
not unlimited and does not implicate a public policy exception to the at-will employment
doctrine.
Overview. This case was decided applying Oklahoma law. Defendant Weyerhauser Company
(Weyco) had concerns that substance abuse was occurring on its property and instituted a search
of certain areas of the mill. This search was conducted using drug sniffing dogs. Plaintiffs were
former employees of Weyco, terminated when firearms were discovered in their vehicles which
were parked in the company’s employee parking lot as a result of this search. The possession of
firearms on company property was in direct contravention of the company’s posted policy
relating to firearms. Plaintiffs brought three separate actions in state court which were removed
to federal district court on diversity grounds. Plaintiffs alleged their termination violated
Oklahoma constitutional and statutory authority establishing their right to carry firearms, that the
search violated their Fourth Amendment rights, and state law claims for false imprisonment,
intentional and tortious interference with business relations, invasion of privacy and negligence.
The district court granted summary judgment in favor of Weyco on each claim.
Held. The court affirms the district court’s grant of summary judgment finding that both the
Oklahoma Constitution (Okla. Const. art. 2, § 26) and the Oklahoma courts acknowledge that the
right to bear arms is not limitless and may be regulated. See State ex rel. Okla. State Bureau of
Investigation v. Warren, 975 P.2d 900, 902 (Okla.1998) (where the court found there is no
unqualified common law or constitutional entitlement to carry a weapon at all times). Oklahoma
courts have not addressed the exact issue of whether clear and compelling public policy
involving the right to bear arms, abrogating an employer’s right to terminate an at-will employee
who exercises his right to bear arms exists, but the court feels that Oklahoma state courts would
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not approve of such a policy.
This court agrees with the district court’s reasoning, that, based on the finding of the Oklahoma
Supreme Court in State ex rel. Okla. State Bureau of Investigation v. Warren, 975 P.2d 900
(Okla.1998), (where the court held “there is no absolute common-law or constitutional right to
carry loaded weapons at all times and in all circumstances.”). Id. at 902. The court notes the
Oklahoma legislature has also expressed the necessity of regulating firearms. See Okla Stat.
Ann. Tit. 21, 1289.2 (2002) (stating “[t]he Legislature finds as a matter of public policy and fact
that it is necessary for the safe and lawful use of firearms to curb and prevent crime wherein
weapons are used by enacting legislation having the purpose of controlling the use of firearms,
and of prevention of their use, without unnecessarily denying their lawful use in defense of life,
home and property ... including their use and transportation for lawful purposes.”)
Oklahoma law recognizes a public policy exception to the generally unrestricted ability of an
employer to terminate an at-will employee. See Burk v. K-Mart Corp., 770 P.2d 24, 29
(Okla.1989). The Oklahoma Supreme Court has cautioned that this tort remedy applies only to a
narrow class of cases and must be used circumspectly. Clinton v. State ex rel. Logan County
Election Bd., 29 P.3d 543, 545 (Okla.2001). Here, the court here declines to extend the public
policy exception to at-will employment doctrine to cover a wrongful discharge action that an
employer regulates an employee’s right to carry weapons on its property.
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Eleventh Circuit
ALABAMA
Givens v. Helig-Meyers Co., Inc., 738 So. 2d 1282 (Ala. 1999) – There is no common law
public policy exception to the employment at-will doctrine in Alabama.
Overview. Plaintiff worked for Defendant, a furniture sales company. Plaintiff alleged that
Defendant terminated his employment after he missed work in order to appear as a witness
before a grand jury. Plaintiff brought a claim in the trial court alleging that Defendant violated
section 12-16-8.1 of the Alabama Code (“section 12-16-8.1”), which states: “No employer in this
state may discharge any employee solely because he serves on any jury empanelled under any
state or federal statute; provided, however, that the employee reports for work on his next
regularly scheduled hour after being dismissed from any jury.” Defendant moved to dismiss
Plaintiff’s claim, and the trial court granted Defendant’s motion. Plaintiff appealed to the
Alabama Court of Civil Appeals.
Held. The court affirmed the trial court’s decision. Because Plaintiff appeared as a witness
before a grand jury, rather than served on the grand jury, the court reasoned that section
12-16-8.1 did not apply. Moreover, the court reasoned that the “the legislature has created two
exceptions to the general rule that employment is at will: (1) the statute at issue in this case . . .
prohibits an employer from terminating an employee because of his or her service on a jury; and
(2) [section 25-5-11.1 of the Alabama Code] prohibits an employer from terminating an
employee solely because the employee filed a workers’ compensation claim.” Furthermore, the
court noted that the Alabama Supreme Court has refused to recognize any other exceptions to the
employment at-will doctrine. Therefore, the court could not “create an exception to the
employee at-will doctrine” for an “employee because he is called to appear as a witness before a
grand jury.”
FLORIDA
Bruley v. Vill. Green Mgmt. Co., 2008 U.S. Dist. LEXIS 99139, 4-6 (M.D. Fl. 2008) – Florida
courts do not recognize any public policy exceptions to termination of at-will employment;
an exception must be predicated on a statutory cause of action.
In 2005, Village Green Management Company (“Village Green”) hired Colin Bruley as a leasing
agent for one of its Michigan properties. In the early hours of June 12, 2007, while lying on his
couch, Bruley heard an argument elsewhere in the complex. Around 2:00 a.m., Bruley heard “a
desperate cry and a desperate need for help,” as someone yelled “I’ve been shot,” as if “fighting
for their life or pleading for their life.” Alarmed, Bruley grabbed his shotgun and one shell and
loaded and cocked the gun. He left his apartment and walked quickly to the commotion where
the victim, Tonetta Lee, lay bleeding from her leg. Bruley handed his shotgun to a neighbor and
tended to Lee. After speaking with police, Bruley returned to his unit. Later that afternoon,
Bruley met with management representatives and was fired. According to Village Green, Bruley
was fired for failing to follow policies specified in the Associate Handbook, chiefly: (1) failure
to contact authorities, (2) failure to inform any Village Green representative or emergency
contact of the incident, and (3) having a firearm on the property.
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Bruley filed a complaint against Village Green, among others, alleging he was wrongfully
discharged from employment, in violation of public policy, specifically protection of his right to
bear arms in self defense. Village Green moved for summary judgment.
Held. The court granted Villa Green’s motion for summary judgment on the grounds that Bruley
(1) was in an at-will employment relationship, (2) Florida provided no action for the common
law tort of wrongful termination, and (3) because Bruley’s wrongful discharge claims had to be
predicated on a statutory cause of action since Florida did not recognize a public policy
exception to termination of at-will employment. While acknowledging that some jurisdictions
recognize exceptions, the court noted that Florida law provides no action for the common law
tort of wrongful termination. Moreover, the court stated that Florida law does not provide an
exception even where termination is founded on an employee’s exercise of constitutional rights.
Thus, to bring a non-contract claim for wrongful discharge in Florida, the court explained, an
employee must rely on statutory causes of action created by the Legislature. According to the
court, Florida courts have refused to create a public policy exception because “[t]he
determination of what constitutes public policy, or which of competing public policies should be
given precedence, is a function of the legislature.” Thus, “if the rule of non-liability for
termination of at-will employment is to be tempered, it should be accomplished through a
principled statutory scheme, adopted after opportunity for public ventilation, rather than in
consequence of judicial resolution of the partisan arguments of individual adversarial litigants.”
Rudnick v. Sears, Roebuck & Co., 358 F. Supp. 2d 1201 (S.D. Fl. 2005) – Under Florida law,
an at-will relationship can satisfy the first element of a claim for tortious interference with
a business relationship, which requires the existence of a business relationship under which
the claimant has rights.
Overview. On January 10, 2004, Arthur Rudnick’s employment with Sears, Roebuck and Co.
(“Sears”) as a Sales Associate was terminated. Rudnick had been employed with Sears for over
thirty years and was 61 years of age on the date of his discharge. Defendant Penny Parker was
the Store General Manager of the Boca Raton facility. Rudnick alleged Defendant Parker had
animosity and malice toward him because he was an older employee and because he questioned
her offensive discriminatory conduct. Specifically, Rudnick alleged that Defendant Parker
engaged in a campaign to sabotage his employment by subjecting him to ridicule, harassing
conduct, and false accusations on account of his age. Rudnick also claimed that Defendant
Parker made false negative accusations about his job performance to Defendant Sears in order to
terminate his employment with Sears.
Rudnick filed suit against Sears and Parker alleging: (1) age discrimination against Sears under
the Florida Civil Rights Act (“FCRA”); (2) retaliatory discrimination against Sears under the
FCRA; and (3) and tortious interference with advantageous employment/business relationship
against Defendant Parker. With respect to the final claim, Defendant Sears argued that Rudnick
fraudulently joined Defendant Parker by including a claim against her for tortious interference
with a business relationship and that the claim could not be sustained under state law because the
first element required the existence of a business relationship under which the claimant has
rights. Defendant Sears argued that as an at-will employee, Rudnick could not satisfy this
element.
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Held. The district court disagreed and found that Rudnick had alleged the elements necessary to
state a claim for tortious interference. The court first noted that pursuant to Florida law, a
plaintiff must establish five elements to state a claim for tortious interference with an
advantageous business relationship: (1) the existence of a business relationship under which the
claimant has rights; (2) the defendant’s knowledge of the relationship; (3) an intentional and
unjustified interference with the relationship; (4) by a third party; and (5) damage to the claimant
cause by the interference. Regarding the first element, the district court held that under Florida
law an at-will relationship satisfies the first element of a claim for tortious interference with a
business relationship. Citing Florida case law, the court noted other cases where Florida courts
have held that the mere fact that a contract is terminable at will is not a defense to an action for
tortious interference and a Florida Supreme Court case which found elements of tortious
interference with business relationship present where no enforceable contract existed. These
cases also explained that terminable-at-will employment agreements possess the essential
attributes of contracts. In Florida, the essential elements of a contract are offer, acceptance, and
consideration. Thus, where a plaintiff is offered employment, accepts that offer, and gives
adequate consideration in the form of his labor, an enforceable contract is formed and that
contract then constitutes the existence of a business relationship under which the claimant has
rights.
There is no common law public policy exception to the employment at-will doctrine, but
several Florida statutes prohibit discharge for policy reasons.
Under Florida law, ordinarily, at-will employment is “terminable at any time by either party.”
Baiton v. Carnival Cruise Lines, Inc., 661 So. 2d 313 (Fla. Dist. Ct. App. 3d Dist. 1995). Florida
does not have a common law public policy exception to the employment at-will doctrine. See
Charles J. Muhl, The employment-at-will doctrine: three major exceptions, MONTHLY LABOR
REVIEW, January 2001, at 3. However, three Florida statutes prohibit discharge for public policy
reasons.
Florida’s Whistleblower Protection Act (“WPA”), enacted in 1986, prohibits an employer from
retaliating against an employee for disclosing or threatening to disclose to, or providing
information in an investigation to, any appropriate governmental agency, regarding an activity,
policy, or practice of the employer that violates the law. FLA. STAT. ANN. § 448.102 (2009).
Moreover, an employee who objects to, or refuses to participate in, any activity, policy, or
practice of the employer that is illegal is protected by the WPA. Id.
Furthermore, a Florida employer may not retaliate against an employer who serves on a jury by
firing, or threatening to fire, such an employee. FLA. STAT. ANN. § 40.271 (2009).
Finally, a Florida employee “who testifies in a judicial proceeding in response to a subpoena may
not be dismissed from employment because of the nature of the person’s testimony or because of
absences from employment resulting from compliance with the subpoena.” FLA. STAT. ANN.
§ 92.57 (2009).
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GEORGIA
Borden v. Johnson, 395 S.E.2d 628 (Ga. Ct. App. 1990) – There is no common law public
policy exception to the at-will employment doctrine under Georgia law.
Overview. Plaintiff, an at-will employee, was discharged by Defendant. Subsequently, Plaintiff
brought claims against Defendant in the trial court, including a claim for wrongful discharge in
violation of public policy, which was based on an allegation that she was terminated because of
her pregnancy. Defendant moved for summary judgment, which was granted by the trial court.
Plaintiff appealed to the Georgia Court of Appeals.
Held. The court affirmed the trial court’s grant of summary judgment. The court reasoned that
an at-will employee “cannot bring an action against his employer for wrongful discharge from
employment.” Moreover, because the at-will doctrine is statutory in Georgia, the court reasoned
that the state’s courts “have consistently held that they will not usurp the legislative function and,
under the rubric that they are propounders of ‘public policy,’ undertake to create exceptions to
the legal proposition that there can be no recovery in tort for the alleged ‘wrongful’ termination
of the employment of an at-will employee.” Therefore, Plaintiff could not successfully assert a
claim for wrongful discharge in violation of public policy based on allegedly being terminated
because of her pregnancy.
CIRCUIT COURT OF APPEALS
Dycio v. Peach State Labs, Inc., 228 Fed. Appx. 970 (11th Cir. 2007) – Oral promises are
unenforceable by at-will employees and cannot be the basis for a tort claim.
Overview. Pursuant to an oral contract, I. Michael Dycio agreed to sell Peach State Labs
products. After Dycio made such sales from 1996 through 2003, Peach State Labs notified him
that he would no longer be compensated for those sales. Dycio filed a complaint against Peach
State Labs alleging breach of contract, fraud, and unjust enrichment in connection with the oral
contract. The court granted Peach State Labs’ motion for summary judgment. Dycio appealed
the ruling from the District Court for the Northern District of Georgia.
Held. The Court of Appeals for the Eleventh Circuit affirmed the decision of the district court.
Addressing the fraud and unjust enrichment claims, the Dycio court agreed with the district
court’s holding that oral promises were unenforceable by at-will employees and affirmed the
notion that such agreements could not be the basis for a fraud or other tort claim. The Dycio
court also affirmed the proposition that oral agreements only created an at-will employment
relationship.
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District of Columbia Circuit
Background.
In Washington, D.C., the at-will standard is alive and well. The District’s whistleblower statute
protects only D.C. government employees. DC ST § 1-615.11. The law protects District
employees who report “waste, fraud, abuse of authority, violations of law or threats to public
health or safety.”
In the private sector, employment remains strictly at-will, with only a narrow public policy
exception which was carved out by the U.S. Court of Appeals for the D.C. Circuit in 1991.
Adams v. George W. Cochran & Co., Inc., 597 A.2d 28 (D.C. 1991).
Since 1991, the public policy exception has changed little, with D.C. courts recognizing that the
exception is to be narrowly construed. Below are some of the most recent D.C. cases in which
the public policy exception has been addressed by the courts. As demonstrated, few cases
alleging common law wrongful discharge, based on the Adams exception, survive motions to
dismiss or summary judgment motions.
This District of Columbia trend in support of at-will employment has been making national
headlines throughout the past year, as its public school Chancellor, Michelle Rhee, has pushed to
revamp the school system to loosen restrictions on her ability to fire non-performing employees.
One major change Rhee successfully initiated in 2008 was a law to reclassify certain office
employees’ jobs as at-will.1 As a result of the reclassification, Rhee terminated nearly 1,000
underperforming workers. Also in 2008, Rhee negotiated an agreement with the teachers’ union,
which permitted her to reassign teachers from 23 schools she closed based solely on their
performance, rather than seniority. Next on Rhee’s agenda is to persuade D.C. teachers to adopt
a pay scale which would increase their earnings to as much as $131,000 a year if they waive their
seniority rights.2
The District of Columbia Court of Appeals first recognized the so-called “public policy
exception” to the doctrine of employment at-will in 1991. Adams v. George W. Cochran & Co.,
597 A.2d 28, 30 (D.C. 1991). In Adams, the plaintiff alleged that he was terminated from
employment for refusing to drive a truck that lacked a required inspection sticker. Id. at 29. The
court, recognizing a “very narrow exception” to at-will employment, ruled that an employee may
bring a cause of action 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. Id. at 34.
In 1999, the U.S. Court of Appeals for the District of Columbia Circuit recognized the Adams,
exception, stating that “a cause of action for wrongful discharge would lie only where the
employee refuses to violate a specific law and the employer puts to the employee the choice of
breaking the law or losing his job.” Liberatore v. Melville Corp, 268 F.3d 1326, 1329 (D.C.Cir.
1
D.C. Code § 1-608.01a.
District Administration, “Washington’s Bold Reformer; A Young School Chancellor Takes D.C. by Storm;”
Professional Media Group, Volume 44, Issue 10, September 1, 2008.
2
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1999). The D.C. Court of Appeals called this requirement a “Hobson choice,” of either doing an
illegal act or being fired. Mandsager v. Jaquith, 706 A.2d 39, 42 (D.C. 1998).
The Adams exception was expanded slightly by the U.S. Court of Appeals for the District of
Columbia, sitting en banc, in Carl v. Children’s Hosp., 702 A.2d 159 (D.C. 1997). In the Carl
decision, the plaintiff, a nurse, was terminated allegedly because she advocated for patients’
rights and against her hospital employer’s interests before the D.C. city council and in court as a
witness. Her claim was predicated on a D.C. statute which made it a crime to injure any witness
for testifying before the City Council. She did not claim that the hospital had violated the statute
or that it created a private right of action. Instead, the plaintiff alleged that her termination was
actionable as a public policy exception to the at-will doctrine. The plurality agreed, finding that
the complaint fell within public policy “solidly based” or “firmly anchored” in the statute in
question, with the caveat that:
Future requests to recognize such exceptions…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
termination.
Id. at 164 (internal citations omitted.)
Thus, the at-will doctrine has withstood numerous challenges in the past decade, with 2008 being
no exception.
Ware v. Nicklin Assoc, Inc., 2008 WL 4445633 (D.D.C. 2008) – Wrongful discharge claim
does not require allegation that plaintiff refused to participate in fraud.
Overview. Ware was hired by Nicklin as a part-time secretary in July 2003 and was promoted
two times in the next year. She alleged that John Nicklin, a Vice President, commonly referred
to African-Americans in a derogatory manner and made racial slurs and references. On March 9,
2005, Ware filed a charge of discrimination with the EEOC. She alleged that management was
aware of her charge and was aware that Ware had knowledge of fraudulent billing and invoicing
scheme at the company. The following month, Ware was absent from work for medical reasons
for a day and a half and was terminated upon her return, allegedly for failing to provide an
explanation of her absence from a medical provider. Ware filed suit in federal district court,
alleging discrimination and retaliation in violation of Title VII and the District of Columbia
Human Rights Act and wrongful termination. Nicklin moved to dismiss pursuant to FRCP
12(b)(6).
Held. Motion to dismiss wrongful termination claim denied. Nicklin contended that Ware failed
to state a claim for wrongful discharge because she merely alleged that she had “knowledge” of
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fraudulent billing, but did not allege that she was asked to participate, refused to participate or
that she was threatened with discipline if she failed to participate in the alleged fraud. Finding
that the court must grant all inferences in favor of Ware at the pleading stage, the allegation that
Ware was terminated as a result of her knowledge of the billing scheme was sufficient.
Kakeh v. United Planning Organization, Inc., 537 F. Supp.2d 65 (D.D.C. 2008) and Krakat v.
Brooks Range Contract Serv., Inc., 570 F. Supp.2d 90 (D.D.C. 2008) – Wrongful discharge
claim requires employee face “Hobson Choice” between violating law or termination.
Overview. In both of these cases, the court held that the plaintiffs had failed to demonstrate that
they were faced with a “Hobson Choice” of either violating the law or being terminated by their
employers. Thus, the court granted summary judgment to the employers.
Kakeh v. United Planning Organization, Inc., 537 F. Supp.2d 65 (D.D.C. 2008). United
Planning Organization (“UPO”) is a private, nonprofit corporation which receives funding from
the District and the federal government. The Plaintiff, Kakeh, was hired as UPO’s Controller in
1998, as an at-will employee. In October 2003, Kakeh accused two of his superiors of
harassment and retaliation, when his job duties allegedly were changed. The allegations were
investigated by UPO formally and were found to be baseless. In early 2004, the Department of
Human Services conducted a routine review of UPO’s finances, discovered some irregularities,
and concluded that UPO did not meet “Federal grant standards.” In March 2004, Kakeh claims
that he was ordered by his supervisor to make changes to UPO’s financial statements to conceal
evidence of fraud, waste and abuse. It is undisputed, however, that the financial statements
ultimately were completed without Kakeh’s assistance. Shortly thereafter, Kakeh filed a
discrimination charge with the District of Columbia Office of Human Rights. In April 2004,
UPO began a reduction-in-force, in which it claims it followed its policy in making termination
decisions based on seniority. As a result, Kakeh and one other employee in his department were
terminated. Kakeh filed suit in federal district court, alleging violations of the District of
Columbia Whistleblower Protection Act, common law wrongful discharge, and retaliation in
violation of the District of Columbia Human Rights Act and the False Claims Act. UPO moved
for summary judgment on all counts.
Held. Summary judgment was granted on Kakeh’s common law wrongful termination count, but
denied on all other counts. In regard to the wrongful termination claim, the court recognized that
under District of Columbia law, employment is strictly at-will. Pursuant to Adams v. George W.
Cochran & Co., 597 A.2d 28, 30 (D.C. 1991) however, there is a “very narrow” exception to the
at-will standard “when the sole reason for the discharge is the employee’s refusal to violate the
law, as expressed in a statute or municipal regulation.” Kakeh’s claim failed because he was not
“presented the “Hobson choice of committing an illegal act or losing his job.” In addition, the
Adams exception does not apply where, as here, “the very statute creating the relied-upon public
policy already contains a specific and significant remedy for the party aggrieved by its
violation.” Because Kakeh’s other counts relied upon the Whistleblower Protection Act and the
False Claims Act which provide their own remedies, he could not employ the Adams exception
to the at-will rule.
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Krakat v. Brooks Range Contract Serv., Inc., 570 F. Supp.2d 90 (D.D.C. 2008). The plaintiffs,
Robert and Donald Krakat, were at-will employees of Brooks Range, which provided
management services for the Armed Forces’ Retirement Home. The Krakats alleged that in
December 2005, they reported “numerous improprieties” in the manner in which the Home was
run to Brooks Range and later to officials responsible for overseeing Brooks Range’s contract.
The Krakats subsequently were terminated for alleged performance issues. The Krakats filed
suit, alleging wrongful termination, defamation, slander and libel. Brooks Range moved for
summary judgment.
Held. Motion for summary judgment granted. The Krakats could not assert the Adams
exception because the “complaint does not assert that either Krakat was actually instructed to
violate the law or face termination. Nor have plaintiffs produced any evidence to show that they
were put to the Hobson choice of either doing an illegal act or being fired…” (citations omitted).
Ervin v. Howard University, 562 F. Supp.2d 58 (D.D.C. 2008) – Professional conduct
standards cannot form basis for broadening public policy exception to at-will employment.
Overview. Dr. Michelle Grant Ervin was hired by Howard University Hospital (“HUH”) in 1993
to head its Emergency Medicine Department. In 2003, the Accreditation Council for Graduate
Medical Education sent a notice to HUH, stating that accreditation of the Emergency Medicine
Department residency program was being terminated. The letter identified eight deficiencies
with the program, three of which were Ervin’s direct responsibility. Ervin was asked to resign,
but she refused. Instead, Ervin filed suit, claiming that, over the years, she was subjected to
gender discrimination and harassment. Additionally, Ervin claimed wrongful discharge in
violation of public policy, claiming that she was terminated for alleged complaints about health
and safety violations at HUH and citing D.C. Code sections outlining the circumstances under
which a health care professional’s license may be revoked. HUH moved for summary judgment
on all discrimination, harassment, retaliation and wrongful discharge counts.
Held. Summary judgment granted to HUH on the wrongful discharge claim. The court
recognized that the D.C. Court of Appeals expanded the Adams exception in 1997 in Carl v.
Children’s Hosp., 702 A.2d 159 (D.C. 1997) to include claims in which the employer’s
termination decision does not specifically violate any statute, but where the termination violates
the public policy expressed in the statute. However, the court found that broad professional
conduct standards such as the ones cited by Ervin—"a licensed physician shall not willfully or
carelessly disregard the health, welfare, or safety of a patient," "a licensed physician shall
conform to the prevailing standards of acceptable medical practice," "a health professional shall
not make or cause to be made a false or misleading communication about the health professional
or health professional's services"— do not provide an adequate basis for the public policy
exception to the at-will doctrine.
Elemary v. Philipp Holzmann A.G., 533 F. Supp.2d 116 (D.D.C. 2008) – Availability of other
statutory relief precludes wrongful discharge claim.
Overview. Defendants Bill L. Harbert and Billy Harbert, father and son, were construction
magnates who allegedly engaged in a bid-rigging process to fraudulently obtain federal grants in
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a building project in Egypt. The plaintiff, Dr. Hoda Elemary, had acted as the Harbert’s
representative and was instrumental in helping them obtain the grant, allegedly unaware of their
intent to engage in bid-rigging. When the Harberts were accused of bid-rigging, Elemary
represented them before the Saudi Royal Board of Grievances and the U.S. Department of
Justice (“DOJ”). Elemary’s agreement with the Harberts gave Elemary 5% of any funds she
saved the Harberts in a settlement with the DOJ. At that time, the DOJ’s settlement demand was
$56 million. Elemary alleged that she obtained a written offer from the DOJ to settle for
$15 million, but Billy Harbert rejected the offer. In the meantime, Elemary claimed that she
discovered evidence implicating the Harberts in the bid-rigging scheme, which the Harberts
attempted to coerce her to conceal from the DOJ. Elemary refused to withhold evidence and was
terminated. Nine days later, Elemary suffered a broken shoulder after being attacked by a
stranger, whom Elemary claimed was hired by the Harberts. Elemary filed suit alleging tortious
interference, breach of contract, quantum meruit, wrongful termination, fraud and civil RICO
claims. The Harberts moved to dismiss some of the claims, pursuant to FRCP 12(b)(6).
Held. Motion to dismiss wrongful termination claim granted. Following Kassem v. Washington
Hospital (above), the court stated that where the statute embodying the public policy relied upon
by the plaintiff already provides a remedy, a plaintiff may not maintain a separate wrongful
discharge cause of action. Here, the plaintiff alleged that she was terminated for refusing to
conceal documents to the DOJ, and identified the False Claims Act as the statute containing the
public policy at issue. The False Claims Act, however, contains a private right of action for
retaliation.
Davis v. Gables Residential/H.G. Smithy, 525 F. Supp.2d 87 (D.D.C. 2007) – Wrongful
discharge claim requires proof that termination was “solely” due to failure to violate law.
Overview. William Davis was employed by Gables as the assistant chief engineer at a housing
complex. He was terminated in July 2003 and filed suit for retaliation and wrongful discharge.
Gables moved for summary judgment. During Davis’s deposition, Davis identified five reasons
for his termination: (1) a discrimination charge he filed against a predecessor company in 1999;
(2) a loud disagreement he had with his direct supervisor; (3) internal complaints he made about
exposure to hazardous materials; (4) calls he made to OSHA regarding hazardous material
exposure; and (5) complaints he made to the Wage and Hour Division of the Department of
Labor. Davis also testified that the property manager was uncomfortable working with him after
an intimate relationship between the two of them ended badly.
Held. Motion for summary judgment granted. Under the Adams exception to the at-will rule, a
plaintiff must prove by a preponderance of the evidence that the sole reason for the discharge
was his refusal to violate the law. The court found that it was clear that not even Davis
considered his complaints “to be the sole, or even substantial, reason for his termination.”
CIRCUIT COURT OF APPEALS
Byrd v. VOCA Corp., 2008 WL 5411343 (D.C. Cir. 2008) – Union workers’ common law
wrongful discharge claims may be preempted by Labor Management Relations Act.
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Overview. Appellants were employed by VOCA in various group homes for developmentally
disabled individuals. They were members of a union, which had a collective bargaining
agreement (“CBA”) with VOCA. Each of the appellants complained to their supervisors about
the conditions in the group homes where they worked. Two of the appellants also complained to
members of the Council of the District of Columbia and to the Mayor’s office. Soon afterward,
the appellants were terminated. Each elected not to pursue arbitration and instead filed suit
alleging common law wrongful termination. The trial court granted VOCA’s motion for
summary judgment, holding that the appellants’ claims were “inextricably bound up” in the CBA
and were therefore preempted by the National Labor Relations Act (“NLRA”).
Held. Affirmed in part and remanded in part. The NLRA preempts common law wrongful
discharge claims where interpretation of the CBA is required. Thus, the court affirmed summary
judgment against the appellant whose claim clearly required interpretation of the CBA, but
remanded other the appellants’ claims for a determination of whether interpretation of the CBA
was required.
Commentary. The court also discussed whether non at-will employees, such as the appellants,
may bring common law wrongful discharge claims under the public policy exception to the atwill standard. Noting that the jurisdiction has never recognized the claim for non at-will
employees, the court questioned whether the exception should be expanded to include employees
whose rights are protected by contract and enforceable in grievance and arbitration proceedings.
However, because the trial court dismissed the action on federal preemption grounds only, the
Court of Appeals declined to resolve the issue, which remains open in this jurisdiction.
Kassem v. Washington Hosp. Center, 513 F.3d 251 (D.C. Cir. 2008) – Common law wrongful
termination tort not available where another statute provides a remedy.
Overview. Fady Kassem was employed by Washington Hospital Center (“the hospital”) as a
nuclear medical technologist. Kassem alleges that he reported numerous violations of Nuclear
Regulatory Commission (“NRC”) regulations. As a consequence, Kassem claimed that the
hospital fabricated allegations that Kassem injected a co-worker with radioactive dye and then
pressured Kassem into admitting that he made the injection. When Kassem refused, he was
terminated. Kassem brought an action against the hospital for wrongful discharge and
intentional infliction of emotional distress. The hospital moved to dismiss both counts pursuant
to FRCP 12(b)(6).
Held. Motion to dismiss wrongful discharge claim granted; motion to dismiss IIED claim
denied. Citing Nolting v. Nat’l Capital Group, Inc., 621 A.2d 1387, 1390 (D.C. 1993), the court
found that the public policy exception to at-will employment is not available “where the very
statute creating the relied-upon public policy contains a specific and significant remedy for the
party aggrieved by its violation.” In this case, Kassem’s wrongful discharge claim was premised
upon various sections of the Energy Reorganization Act (“ERA”), which provides that an
employer may not discharge an employee for refusing to engage in any practice made unlawful
by the ERA and contains a mechanism for filing a complaint with the U.S. Department of Labor.
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