Termination

• Employment-at-will

– Payne v. Western and Atlantic RA Company (1884)

– The Court confirmed the right of an employer to hire or fire any individual for good cause, bad cause, or no cause at all

Restrictions on Employment-at-Will

• Civil Rights protections

• Employment contracts, union or individual

• Market forces

• Whistleblower statutes

• Threats of wrongful discharge suits

Civil Rights Restrictions

• Murphy v. American Home Products Corp (1983)

– Age discrimination used to challenge at-will termination

Violation of Public Policy

• Employees may not be fired for exercising rights protected by law

– Worker comp claims– Refusing to commit perjury – Absence for jury duty– Voting as stockholder

Requires “clear and legal mandate” re public policy

Whistleblowing

Palmateer v. International Harvester (1981)– Employee was wrongfully discharged after

reporting coworkers involved in crime

Sheets v Teddy’s Frosted Foods (1980)– Employee was wrongfully discharged for

insisting company comply with federal Food, Drug and Cosmetic Act

Expressed or Implied Promise of Employment

• Touissant v Blue Cross and Blue Shield of Michigan (1980)– Employees had been wrongfully fired for no

apparent reason, though the employer said “You can have your job as long as you do your job.”

– Employer also had written policy requiring good cause, warnings, and a disciplinary hearing before discharge

Good Faith and Fair Dealing

• Fortune v. National Cash Register Company (1977)

– NCR had fired long-term employee who was “at will”, but the employer sought to avoid paying large commission through the discharge, demonstrating bad faith

Only 11 states recognize covenant-of-good-faith exception to employment at will

Tortious Conduct

• Tortious conduct – violation of a duty owed to others – variation on bad faith

• Monge v. Beebe Rubber Company (1974)

– Female employee was “abusively discharged” for refusing to date supervisor

– Now that problem would be handled under Civil Rights sexual harassment protection

Layoffs

• Firefighters Local Union 1784 v. Stotts (1984)

– Supreme Court Ruled a layoff illegal when more senior white employees were laid off while less senior black employees were retained – seniority is a legitimate basis for discharge

• Worker Adjustment and Retraining Notification Act– Complicated law affecting employees in facilities to be

shut down

Broad practice implications

• Have written policy manual, reviewed by employee

• Use positive employee relations approach• Know the legal context of your business

operations• “Golden Rule” – do to others as you would

have them do to you• Keep an excellent employment attorney on

retainer