I. The Employment Contract
A. The Doctrine of Employment at Will
1. A general or indefinite hiring is determinable at the will of either party.
2. Actually is a presumption, but acts as an absolute rule because of the difficulty in rebuttal.
B. Wrongful Termination: Contract Theories
1. Employment Manuals
a. When a company with a substantial number of employees circulates an employment manual, courts should construe the terms of the manual in accordance with employee expectations (Woolley)
b. While most states agree with this rule, they usually allow noticeable disclaimers to override the potential contract
2. Implied In Fact Contracts
a. Factors to determine whether there is such a contract
i. The personnel policies or practices of the employer
(a). A disclaimer in one document does not act as a disclaimer in all related documents (Guz)
ii. The employee’s longevity of service
(a). Long, successful employment history is not enough on its own (Guz)
iii. Actions or communication by the employer which reflect assurances of continued employment
iv. Industry practices
b. Permitting proof of, and reliance on, implied-in-fact contracts doesn’t nullify the at-will rule (Foley- at least for CA)
c. Job security is never found to be absolute even if the contract is for lifetime employment
3. Implied Covenant of Good Faith and Fair Dealing
a. These covenants are implied as a matter of law
b. When commissions are owed to an employee, the decision to terminate should be made in good faith (Fortune)
c. Most courts have limited Fortune to apply to the right to recover payment of the commission, but not to retain employment
C. Wrongful Termination: Tort Theories
1. Bad-Faith Breach
a. Breach of the implied covenant will provide the basis for an action in tort
b. Requirements before application
i. Superior bargaining position of one of the parties
ii. The weaker party entered the contract primarily to secure an essential service or function, financial security or peace of mind.
iii. The weaker party places its trust and confidence in the larger entity
iv. The defendant acts in a way that intends to frustrate the weaker party’s enjoyment of the contract rights.
II. Protection of the Public Interest
A. Performance of Public Obligations
1. The public’s need for competent jurors outweighs any employer prerogative to discharge an employee for serving on a jury (Nees)
2. The cause of action in such cases sounds in tort, not contract.
B. Assignment in Contravention of Public Policy
1. An employer’s authority over its employee doesn’t include the right to demand that an employee commit a criminal act to further its interests, and the employer may not coerce compliance through disciplinary actions (Tameny)
2. Public Policy is a balance between fairness and employer perogative
C. Refusal to Violate Ethical Obligations
1. In certain circumstances, a professional code of ethics may contain an expression of public policy
2. An employee only has a cause of action for wrongful discharge when the discharge is contrary to a clear mandate of public policy (Pierce)
1. Whistleblowers are often troublemakers within the company and may cause enough problems to justify the dismissal
2. Generally, internal whistleblowers are treated less favorably than external ones
3. A matter must strike at the heart of a citizen’s social rights, duties, and responsibilities before the tort of retaliatory discharge will be allowed.
4. Information usually found in whistleblower statutes (pp. 727-28)
a. Scope of coverage
b. There is typically no limitation on the class of protected employees.
c. Most laws protect erroneous whistleblowing as long as the plaintiff reasonably believed illegality had occurred
d. Usually, a whistleblower must exhaust internal remedies before going public.
e. Remedies generally include damages, attorney’s fees, and in some cases, reinstatement
5. Other places to find whistleblower protection (pp. 728-35)
a. Sarbanes-Oxley Act
c. False Claims Act
III. Regulation of Race and Other Status Discrimination
1. Background on Title VII
a. Aimed mostly at black males, despite other references
b. Passed in response to segregation laws and the Civil Rights movement
c. § 703(a)(1)-(2) provides the focus of the course (p.56)
a. EEOC is the initial processor of complaints
b. EEOC has no enforcement power and the courts were left as the enforcers
3. Key Issues
a. What is discrimination?
b. How do you prove it
first establish that the wrongdoing was of such severity that the employee in fact would have been terminated on those grounds alone if the employer had known at the time of discharge (McKennon)
3. Title VII doesn’t restrict plaintiff’s right to sue only on charges in which the EEOC has made a finding of reasonable cause
4. Mixed Motive Cases
a. Price Waterhouse
i. If P proves that an unlawful reason was a motivating factor for the decision, then the burden of persuasion shifts to D to show that the other offered reason was so serious that it justified the decision on its on.
ii. Proof of unlawful motive requires “direct and substantial” evidence (comes from O’Conner concurrence).
(a). This requirement was eliminated in Costa, although Costa mostly applies to jury instructions
b. 1991 amendment to the Civil Rights Act (42 USC § 2000e- 2(m)).
i. The amendment created a violation of the act instead of merely shifting the burden of persuasion.
ii. If the employer could prove an alternate reason for the firing, it was not absolved of liability, but it limited the remedies available to P to declaratory relief, certain types of injunctive relief, and atty’s fees and costs. (42 USC § 2000e-5(g)(2)(B).
C. Proving Systematic Disparate Treatment
1. Statute refers to these types of cases as “pattern and practice” cases.
2. These suits almost always involve statistics bc they are nearly impossible to prove otherwise.
a. Thus they are usually only brought in class action claims.
3. Once a discriminatory pattern or practice is shown, the burden of persuasion shifts to the er to show a valid reason why the adverse decision was made for each employee. (Cases often settle once the discriminatory pattern is shown)