Legal Affairs
Jeff Feuquay
Associate Editor
Violations of Public Policy
Just when you thought "I didn't break any laws" was a pretty fair defense
The background: most public-sector employers retain some vestige of a merit system. As some of the old hands may recall, at its most basic, the theory is that we try to figure out which applicant(s) can be expected to be better employees and then hire him, her or those. Of course, we're all familiar with the ongoing debates on what "better employee" means, so let's dodge that bullet for now. The flip-side of the merit concept (demerit?) is that, absent a reduction-in-force, public-sector employers generally get rid of only those employees who no longer have merit, i.e., we fire people "for cause." This has lead to the expectation, confirmed by many, many courts, that public-sector employees often have a property interest in their positions; that is, to some extent the position is that employee's property and can be taken only for a legitimate reason and only upon giving the employee some degree of due process.
Recognize that the above discussion overstates the status of the public-sector workforce. For, just as most private-sector workforces are employed at will, usually a fair proportion of any public-sector workforce is also in that status. Employment at will, at most know, exists when an employee can be fired for any reason or no reason (except for "wrong" reasons such as age, race, etc.) Often, there is not even a requirement for "good faith and fair dealing." So, theoretically, an at-will employee could be fired for wearing one blue and one black sock (assuming we don't implicate the ADA). At-will employees go by various terms, e.g., unclassified, exempt, temporary, seasonal, senior executive and so on. Laws or rules that state that an employee can be fired "for the good of the service" or that he or she "serves at the pleasure of…" or some like phrase are also good indications that the employee is at-will.
In an effort to limit liability in promotions, transfers, terminations, etc., or simply to make them easier, and concurrent with many jurisdictions making a greater proportion of their positions non-merit, there has been a move to dramatically increase the proportions of their workforces which are employed at will. Unfortunately, lurking in the background is the public policy tort, our topic today. So, the person may be "at-will," apparently lacking those property rights associated with merit positions, but an employer can still commit a tort, a wrong, when an adverse personnel action is taken for reasons prohibited by a jurisdiction's public policy. Courts continue to struggle with what comprises a public policy tort, but a few recent decisions may help our understanding. Notice that the most cases below are at the state level; they examine violations of state public policy, by far and away the most common venue. The implication is that you need to know what your own state views as its public policy.
Yet, one of the most intriguing decisions came from a federal court. Denying a motion to dismiss a § 1981 claim brought by a Hispanic library assistant who alleged that racial and national origin discrimination had been factors in his discharge, a federal district court in Pennsylvania rejected the defense argument that an at-will employment relationship is not a "contractual" relationship within the meaning of § 1981. "The plaintiff points to a valid contractual relationship between the parties," the court wrote, "because Section 1981 protects at-will employees from discriminatory terminations." Marquess v. City of Philadelphia (E.D. Pa. 1998) 77 FEP 449. (Note: For a recent holding to the contrary---an at-will employment relationship is not an adequate contractual relationship to support a § 1981 claim for wrongful termination---see Hawkins v. Pepsico, Inc. (MD NC 1998) 10 F. Supp. 2d 548, 77 FEP 497, purporting to rely primarily on the persuasiveness of certain Second Circuit authority.) In that jurisdiction, at-will employment has suddenly become contractual employment.
The workers' compensation laws of many states have a provision concerning what happens if an employer retaliates against worker for filing a claim. In Pennsylvania, the state supreme court found such a provision implicit in the statute. Answering a question of first impression under Pennsylvania law and reversing dismissal, the state supreme court held that an at-will employee who alleges retaliatory discharge for the filing of a workers' compensation claim has stated a common law cause of action. (According to the court's review of its own decisions, it had never previously recognized a common law public policy claim, though in Geary v. U.S. Steel Corp. (1974) 319 A.2d 174, it had acknowledged the theoretical possibility of doing so given an appropriate set of facts.) Rejecting the employer's argument, the court held that the absence from the Pennsylvania Workers' Compensation Act of any statutory remedy for retaliatory discharge does not negate the existence of a public policy against such conduct. The court insisted that even in the absence of a legislative pronouncement, the courts may in a proper case determine what is against public policy. Agreeing with the reasoning of the Indiana Supreme Court in Frampton v. Central Indiana Gas Co. (1973) 297 N.E.2d 425, the court emphasized that to refuse to recognize a retaliatory discharge claim in the present context would disrupt the "historical balance" represented by the workers' compensation bargain. Shick v. Shirley (Pa. 1998) 552 Pa. 590, 716 A.2d 1231, 14 IER 480.
Public policy claims often seem able to bypass the procedural requirements found in specific statutes. For example, an Ohio Court of Appeals reversed the dismissal of a common law public policy claim based on a school counselor's allegation that she had been denied a promotion in retaliation for reporting an incident of child abuse by a school principal. The court held, first, that it was not fatal to the plaintiff's common law claim that she had failed to comply with the procedural prerequisites for asserting a claim under Ohio's Whistleblower Statute, (R.C. 4113.52), since her common law claim had an independent public policy basis in an Ohio statute, (R.C. 2151,421(A)(1)(a)), requiring certain professionals to report suspicions of child abuse. "A plaintiff asserting a claim for wrongful discharge must abide by the requirements of R.C. 4113.52," the court wrote, "only if she is asserting either a statutory claim or a common-law claim based on the public policy embodied by that statute." In addition, the court held that recognizing a common-law public policy claim for wrongful denial of promotion is a "logical and necessary" extension of the law of wrongful discharge. "We hold," the court wrote, "that a cause of action for wrongful denial of a promotion in violation of public policy may be brought in tort under Ohio common law." Powers v. Springfield City Schools (Ohio App. 1998) 14 IER 172.
Statutory violations remain a common basis for asserting a public policy tort. Reversing summary judgment, a North Carolina Court of Appeals held that a public policy wrongful discharge claim was adequately stated by the allegation that the plaintiff had been discharged for failing a drug test that was carried out in non-compliance with the drug testing requirements set forth in N.C. Gen. Stat. §95-232. (The laboratory used by the employer to conduct the test did not qualify as an "approved" laboratory under the statute.) Explaining that North Carolina's version of the public policy exception is not limited to situations involving either an employee's refusal to violate the law or his or her engaging in legally protected activity, the court held that the doctrine was properly invoked in the present case by the allegation that the plaintiff's discharge had violated the public policy of ensuring reliable drug testing. The legislature did not specify that the drug testing statute's own remedy, (an action against the employer by the commissioner of labor), was intended to be exclusive, the court added, and there exists no preemptive federal legislation. Garner v. Rentenbach Constructors (N.C. App. 1998) 129 N.C. App. 624, 501 S.E.2d 83, 14 IER 51.
While the North Carolina case examined a statutory violation, in some states, e.g. plaintiff attorney heaven, California, mere administrative regulations may be enough to define public policy. A case from the private sector is illustrative. Affirming a reversal of summary judgment, the California Supreme Court held that a wrongful discharge claim was adequately stated by the allegation that the plaintiff, an aircraft parts inspector with 23 years of tenure, had been discharged for repeatedly complaining that his employer was shipping defective parts and altering inspection records. Disagreeing with the trial court, the Supreme Court held that the claim was sufficiently "tethered" to statutory expressions of public policy concerning air travel safety in light of administrative regulations issued by the Federal Aviation Administration. "We continue to believe," the court wrote, "that aside from constitutional policy, the Legislature, and not the courts, is vested with the responsibility to declare the public policy of the state...Recognizing this important distinction, however, does not allow us to ignore the fact that statutorily authorized regulations that effectuate the Legislature's purpose to ensure commercial airline safety are 'tethered to' statutory provisions...Contrary to the dissenting opinions, when courts discover public policy in regulations enacted under statutory authority, they are not 'mistaking their own predilections for public policy,' but rather are recognizing a public policy that the legislature has formulated and the executive branch has implemented." Green v. Ralee Engineering Co. (1998) 19 Cal. 4th 66, 960 P.2d 1046, 78 Cal. Rptr. 2d 16, 14 IER 449.
Remember the North Carolina court's reference to exclusive remedies and federal preemption -- this is a common theme. If a statute says that it is the exclusive remedy for a particular wrong or if there exists a federal statute governing the specific area, state court's are reluctant to find a public policy tort available. In Collier v. Insignia Commercial Group, 1999 OK 49, ___P.2d___, the federal court for the Western District of Oklahoma asked the Oklahoma Supreme Court to determine whether a plaintiff could pursue a public policy tort claim for quid pro quo sexual harassment and retaliatory constructive discharge in light of the remedies available under federal and state anti-discrimination laws. The state court defined the conditions under which a plaintiff could state a public policy tort claim: 1) the employer violated public policy goals that are clearly stated in existing state law; and 2) there is no adequate, statutorily expressed remedy for the violation. Here, the court found that Oklahoma's Anti-discrimination Act foes not provide an adequate remedy for victims of quid pro quo sexual harassment because it does not allow a civil cause of action against the employer, only an administrative remedy. Since an employee subjected to discrimination on the basis of disability was allowed by that statute to bring a private civil action, the lesser remedy for sexual harassment was inadequate and a public policy claim was allowable.
So, it's not enough that you've made everyone exempt, unclassified, non-merit and removed all property rights, you still have to treat them consistent with the existing public policies of your jurisdiction. And, while attorneys have a maxim that not every wrong has a corresponding a cause of action, it appears that not having an adequate statutory remedy can lead to a new cause of action. Be good to one another or … see you in court.
Jeff may be reached at P.O. Box 706, Perry, OK 73077-0706; Phone: (580) 336-4908; Fax (580) 336-5366; Net: jeff@feuquay.com. If there is a topic that you would like to see addressed in this column please let him know.
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