# F I LED J a nua r y17, 1996 C e c i l C ro w s o n , J r . A p p e l l a t e C o u r t C l e r k I N THE C O U RT OF A PPEA L S OF TEN N E S S E E W E S T E R N SE C T I O N AT J ACK S O N B L A KE W

E B ER, ) ) P l a i nti f f / A ppe l l a nt, ) S h e l b y Chan c e r yNo . 103274- 3 R . D . ) VS. ) A ppe a l N o . 02A 01- 9407- C H

- 00173 ) ) J A C K MO S E S , I ndi v i dua l lya n d ) J EFFERS O N PI LOT LI FE I N S . C O . , ) ) D e f e n d a n t s /

A p p e l l ees. ) A PPEA L FROM THE CHA N C ERY C O U RT OF SHELBY C O U N T Y

A T MEMPHI S , TENN E S S E E THE HON ORA BLE D. J . A L I S S A N D R A TOS , C H A N C ELLOR

G A I L O. MA THES Memph i s , Ten n essee A ttorn e yf

o r P l a i nti f

f / A ppe l l a n t R I C H A R D H. A LLEN , J R . A L L E N , SCR UGGS, SO SSAMA N & THOMPS O N , P. C . Memph i s , Ten n essee A ttorn e yf

o r De f e nda nts/

A ppe l l e e s

A FFI RMED

A L AN E . H I G H E R S , J U D G E

HEW I TT P. TOMLI N , J R . , S R . J . ( C o n c u rs )2

W . FRAN K CRA W

FORD , P. J . , W

. S . ( D i ssen t s -see sep a ra t e d i ssen t i n g opi n i on)

P l a i n t i f f

- A ppe l l a n t B l a k e W

e b e r b roug h t s u i t agai n s tthe De f e nda nts - A ppe l l e e s , J a c k Mos e s a nd J e f f e rs on Pi l ot Li f

e I n s u ra n c e C o m p a n y ( " J e f f e rs o nPi l o t " ) , al l egi n g t h a t h e w a s unl a w f u l lydi s c h a rg e d due to hi s re f u salto par t i c i p a t e i nA p p e l l ee J e f f e rs o nPi l o t ' s i l l egalem p l o yment p ract i ces. T h e c h a n c e l l o r di s m i s s e d A ppe l l a nt' s s u i t , s tati n g that hi s cau s e of

a c t i on w a s ba rre d by the a ppl i c a b l e on e y e a r s tatute of lim it a t io n s . W

e b e r ap p eal s the l o w e r

c ourt ' s di s m i s s a l of hi s C o m p l a i nt.

A t the he a ri n g be f

o re the ch a n c e l l o r , the pa rt i e s s t i pul a ted to the f o llo w in g f

act s . A p p e l l a n t w as verb a l ly n o t i f i e d b y App e l l ee J ack Mo ses o nA u g u s t 5 , 1992, t h a t A p p e l l a n t ' s sal es manager co n t ract w i t h J e f f e rs o nP i l ot w oul d be te rm i n a t e d a t th e en d o f A u g u s t , 1992. A ppe l l a n t ther e a f

terre que s ted i n w ri t i n g that J e f f e rs on Pi l ot re c onsi d e r it s de c i s i on to ter m i n a te hi m . A p p e l l a n t ' s sal e s m a n ager co n t ract w i t h J e f f e rs o nP ilo t pro v i d e d , i n per t i n e nt par t : " thi s c ontra c t m a ybe t e rm i n a t e d o nw ri t t e nn o t i c e b ye i t h e r p a rt y . . . . " A p p e l l a n t received w ri tte n noti f

i c a t i on of

hi s ter m i n a t i on afterA u g u s t 31, 1992. A ppe l l a n t f i l e d the pr e s e nt sui t f o r re tal i a tor

ydi s c h a rg e on A u g u s t 31, 1993.

A ppe l l a nt' s Co m p l a i nt a s s e rt s tha t A ppe l l a nt w a s te rm i n a t e d3

b ecau s e he re f

u s e d to com p lyw i th J e f f e rs on P i l ot' s a l l e g e d c o m p a n y pol i c yof

nothi ri n g or

re c o m m e ndi n g f

o r em p l o y m e n t any b l ack f e m a l es. T h i s al l egat i o n , i f

tru e , c ons t i tute s a v i o l a t i on of the T e nne s s e e H u m a n R i g hts A c t ( " A c t " ) , T . C . A . § 4- 21- 401 ( 1991) . A ppe l l a n t seek s re lie f purs u a nt to § 4- 21- 301 ( 1991) of the A c t , w h i c h s t a t e s : I t s h a l l be a di s c ri m i n a tor ypra c t i c e f

o r a pe rs o nor

f o r tw o ( 2 ) o r m o re p e rs o n s : (1 ) to re t a l i a t e o r d i scri m i n a t e i nany mann e r agai n s t a pe rs on b ecau se h e o r sh e h as o p p o sed a p ract i c e d ecl a re d di s c ri m i n a tor ybythi s c h a pte r .

. . A ppe l l a n t al s o asser t s a cl a i m f

o r re l i e f u n d e r the P ubl i c P rote c t i on A c t , w h i c hp ro v i d es: ( a ) N o em p l o yee s h a l l be di s c h a rg e d or ter m i n a ted s o l e lyfo r r e f u s i n g to par t i c i p a te i n , or f o r re f u s i n g to re m a i ns ile n t a b o u t i l l egal act i v i t i es. (b ) A s u sed i nt h i s sect i o n , " i l l egalact i v i t i es" m ean s act i v i t i e s w h i c ha re i n vi o l a t i on of the c rim in a l o r c iv il c o d e o f t h is st a t e o r the U n i t e d S t a t e s ora n yre g u l a t i on i nte nde d to protec t the p u b l i c h eal t h , saf

e t y o r w e l f a re . T . C . A . § 50- 1 - 304 ( 1991) .

T h e a ppl i c a b l e s tatute of l i m i tati ons fo r

cl a i m s f

i l e d p u rs u a n t t o t h e A c t an d f

o r cl a i m s al l egi n g t h e t o rt o f re tal i a tor

ydi s c h a rg e i s one year. S e e T . C . A . § 4- 21- 311 ( 1991 & S upp. 1994) a nd T. C . A . § 28- 3 - 104 ( 1980 & S upp. 1994) , re s p e c t iv e ly . A ppe l l a nt al l e g e s that hi s e m p l o y m e n t c ontr a c t re qui re d w ri tte n noti f i c a t i on of ter m i n a t i o n i n ord e r f o r ter m i n a t i o nt o b e ef f ect i ve. Th u s , A ppe l l a nt cl a i m s that hi s ter m i n a t i o n w a s not unequi v o c a l , a nd the s t a tute of l i m i tati ons di d not beg i n to run, unti l h e received w ri t t e nnoti c e , w h i c h oc c u rre d s o m e ti m e a f t e r A u g u s t4

31, 1992.

A ppe lle e s a rg u e , on the othe r ha nd, that W

e b e r knew hi s e m p l o yment w as t e rm i n a ted on A u g u s t 5, 1992. I n support of thei r a rg u m e n t , A p p e l l ees ci t e t o W e b e r ' s l e ttera ddre s s e d to Pa t W a l d e n , Regi o n a lV i c e P re s i d e nt of J e f f e rs on Pi l ot, da ted A u g u s t 5, 1992. T h e l e tte r s tate s , " I w oul d l i k e y ou to re c onsi d e r y our de c i s i on to t e rm i n a t e m yS a l es Man ager

co n t ract , b ecau se I f eelt h a t I ha v e m u c h to a dd to th e Me m phi s A gen cy an d J e f f e rs o nPi l o t as a S a l e s Man ager. " Th e A p p e l l ees a l s o c l a i m that i t i s e v i d e nt f ro m A ppe l l a nt' s C o m p l a i nt that A ppe l l a n t kne w the A u g u s t 5, 1992 de c i s i on to t e rm i n a t e h i m w as f i n a l . Th e C o m p l a i n t a l l e g e s that, a f terW e b e r s e nt the l e tterto Mr . W a l d e n , but b e f o r e A u g u s t 31, 1992, " P l a i nti f f a g a i n pre s s e d Defenda n t Mo s e s a s to w hythe te rm i n a t i on w a s oc c u rri n g . Defenda n t Mos e s s a i d , ' b e c a u s e of the w hol e s i tuati on. ' " B a s e d on the s e s t a t e m e nts m a d e byA ppe l l a nt, A ppe l l e e s c onc l ude tha t the s t a tute of l i m i t a t i ons be g a n to run no l a t e r than A u g u s t 5, 1992.

W e pe rc e i v e the onl yi s s u e be f o re thi s C ourt to be w h e ther , ina re t a lia t o rydi s c h a rg e c a s e , the s tatute of l i m i t a t i o n s accru a lp e ri o d b egi n s to run w h e n the em p l o yee i s i n f o rm e d o f

h i s i m m i n e nt ter m i n a t i on, o r w h e n that te rm i n a t i on ac tual lyoc c u rs .

I n W e b s terv . T e nne s s e e B o a rd of R e g e nts , 902 S . W

. 2d 412 (T e nn. A pp. 1995) , the m i d d l e sect i o nof thi s c ourt cons i d e re d the poi nt at w h i c h the s t a tute of

l i m i tati ons be g i n s to run " w h e n a nem p l o yee i s givenn o t i c e5

o f hi s pe ndi n g di s c h a rg e ( due to al l e g e d di s c ri m i n a t i on b ased o nrace) but c onti nue s to per f o rm non- g r a tui tous s e rv i c e s unti l the fi n a l da yof w o rk purs u a nt to s a i d noti c e . " I d . at 4 1 4 . Th e f a c ts of W

e b s t e r are m a rk e d lys i m i l a r

to the f

act s i nt h e case atb a r . I n W e b s t e r , t h e p l a i n t i ffe m p l o yee, w h o ser ved as t h e D i re c tor of A c c ounti n g a nd Fi n a n c e a t Ten n essee S tate U n i v e rs i ty fro m 1990 until hi s ter m i n a t i on on S e ptem b e r 3 , 1991, a l l e g e d t h a t h e w as d i sch a rged b ecau se o f h i s Afri can - A m e ri can race. I d . a t 413. A l thoug h the de f e nda nts noti f

i e d p l a i nti f

f that hi s e m p l o ymentw oul d be te rm i n a t e d on S e pte m b e r 3, 1991, the de f

e nda nts tol d pl a i nti f

f tha t hi s te rm i n a t i on w oul d not be e f f e c t i v e unti l S e ptem b e r 30, 1991. I d . T h e pl a i nti f f f i l e d hi s ori g i n a l c o m p l a i nt on S e ptem b e r 28, 1992, ove r

one y e a r

a f terpl a i nti f

f w a s noti f

i e d of hi s i m p e ndi n g ter m i n a t i on, but l e s s than one y eara f terthe e f

f e c t iv e da te of ter m i n a t i on. I d . R e ly i n g on the de c i s i o nof the S upre m e C ourt i n D e l a w a re S t a t e C o l l ege v. R i c k s , 449 U . S . 250, 258, the c ourt f ound tha t the s t a tute o f l i m i tati ons i n a n e m p l o y m e nt di s c ri m i n a t i o ns u i t beg i n s to run on the d a t e that the a lle g e d di s c ri m i n a t i on occ u rs ; that i s , the da te the e m p l o yee i s noti f

i e d of hi s i m p e ndi n g ter m i n a t i on. I d . a t 414. Quoti n g f ro m R i c k s , the c ourt sta ted: T h e o n lya l l e g e d di s c ri m i n a t i on occ u rre d -

- a nd the fil i n g lim it a t io n s pe ri ods the re f o re c o m m e n c e d -

- a t the ti m e the tenur e de c i s i on w a s m a d e an d co m m u n i cat e d t o [ p la in t if f] . .

. . Me re c onti nui ty of em p l o y m e nt, w i thoutm o re , is i n s u f f i c i e n t t o pro l ong the l i f e of a c a u s e of

a c t i on f

o r e m p l o y m e n t d i s c ri m i n a t i on. I d . A l though the di s c ri m i n a tor y act R i c k s i n v o l v e d a de n i a l of tenur e , ra therthan a t e rm i n a t i o no f em p l o yment , t h e Sup re m e C o u rt m a d e cl ear6

in C h a rdonv. Fern a n d e z , 454 U . S . 6 ( 1981) , that the ra t i ona l e e m p l o y e d in R i c k s w as al s o ap p l i cab l e t o cases i n v o l v i n g ter m i n a t i on of e m p l o yment . In C h a rdon , t h e r e s pondents w e re nontenur e d a d m i n i s t ra tors inPu e rt o R i c o ' s De p a rt m e nt of E duc a t i on. On J une 18, 1977, e a c h re s pondent w a s noti f i e d by l e tterthat hi s a ppoi ntm e nt w oul d t e rm i n a t e a t a s p e c i f i c da te be t w e e n J une 30 and A u g u s t 8, 1977. N o c o m p l a i n t w a s f

i l e d unti l J une 19, 1978. I n hol d i n g that the a ppl i c a b l e one y e a r

s tatute of

l i m i tati ons ba rre d the r e s pondents ' c a u s e of a c t i on, the C ourt sta ted: I n R i c k s , w e he l d that the prope r f o c u s i s on the ti m e of the d i scri m i n a t o r

ya c t , not the poi nt at w h i c h the c o n seq u e n ces o f t h e ac t be c o m e pai n f u l . 449 U . S . , a t 258. T h e f a c t of ter m i n a t i o ni s n o t i t sel f a n ille g a l act . I n R i c k s , t h e al l eged ille g a l a c t w a s ra c i a l di s c ri m i n a t i o ninthe te nure de c i s i on. I d . , a t 259. H e re , re s ponde nts a l l e g e tha t the de c i s i on to t e rm i n a t e w a s m a d e s o l e lyf o r pol i t i c a l re a s ons, v i o l a t i ve o f F irs t A m e n d m e n t ri g h t s . Th e re w e re n o o t h e ral l egat i o n s , e i therin R i c k s o r

i nt h ese cases , o f

i l l egalact s su b seq u e n t t o the da t e on w h i c h the de c i s i ons to te rm i n a t e w e re m a d e . . . .Int h e cases atb a r , resp o n d e n t s w e re n o t i f i e d , w h e n t h e y received thei r

l e tter s , that a f

i n a l de c i s i on had be e n m a d e to t e rm i n a t e th e i r

a ppoi ntm e nts. T h e f a c t that the yw e re a ffo rd e d r eas ona b l e noti c e c a nnot ex tend the pe ri od w i thi n w h i c h sui t m u s t be fi l e d .

T h e A ppe l l a nt i n the pr e s e n t c a s e does not cl a i m that he w a s d i scri m i n a t e d a g a i n s t ; ra ther , he a s s e rts a c a u s e of a c t i o nf

o r re t a lia t o ry d i sch a rge. I t i s w e l l s e ttl e d tha t a ne m p l o yer i nTen n essee may t e rm i n a t e t h e e m p l o y m e n t re l a t i onshi p w i th or w i thout good c a u s e . P a y n e v. Th e W

est e rn& A . Rai l ro a d , 8 1 Ten n . 5 0 7 , 5 1 7 ( 1 8 8 4 ) . Ho w ever , our c ourts ha v e re c o g n i z e d e x c e pti ons to the e m p l o y m e nt a t w i l l doc t ri n e . In C l a nton v. C a i n - S l o a nCo . , 677 S . W . 2d 441 (T e nn. 1984) , the Ten n essee S upre m e C ourt f i rs t re c o g n i z e d a c a u s e of a c t i on f o r7

re t a lia t o rydi s c h a rg e i n ord e r to pre v e n t em p l o yers f ro m c i rc u m v e nti n g thei r obl i g a t i ons underthe w o rk e rs ' c o m p e n s a t i on l a w s . S i n c e C l a nton w a s de c i d e d , tort a c t i ons f o r re t a l i a t o r

y d i sch a rge h ave b eenexp a n d e d t o i n c l ude a v a ri e ty of si tuati ons w h e re a n e m p l o y e r ' s a c t i ons c le a rly v i o l a t e st a t u t o r

y p o l i cy. S ee gen e ra l ly A nde rs on v. S tand a rd Regi s t e r C o . , 857 S . W

. 2d 555, 556(T e nn. 1993) . S p eci f i cal ly , t h e A nde rs o nc ourt reco g n i z e d t h a t " a nem p l o yer can n o t d i sch a rge empl o yee s . . . b ecau s e they re f

u s e to par t i c i p a te i n or be s i l e n t a bouti l l e g a l a c t iv i ty a t the w o rk p l ace. (T . C . A . § 50- 1 - 304 ( 1991) ) . " I d . a t 556. In R e y nol d s v . O z a rk Motor L i n es, In c . , 8 8 7 S . W . 2 d 8 2 2 (T e n n . 1994) , the c ourt f ound the fo l l o w i n g t o b e el e m e n t s o f a cau se o f

act i o nf

o r re t a l i a t o r

y d i sch a rge: " a n e m p l o y m e n t a t -w i l l re l a t i onshi p ; a c l e a r de c l a ra t i on of

publ i c po lic y w h i c hi m pose s duti e s upon the em p l o yee o r em p l o yer ; an d d i sch a rg e of t h e e m p l o y e e fo r

re f u s i n g t o v i o l a t e t h o s e d u t i e s . " I d . a t 825.

T h e e l e m e nts of a r e tal i a tor ydi s c h a rg e c l a i m a re pre s e nt i n the case a t bar . A s thi s c ourt sta ted i n R a ndol ph v. Dom i n i on Ba n k , 826S. W . 2 d 477 (T e nn. A pp. 1991 ) , " a c ontr a c t f o re m p l o y m e nt f

o ra n i nde f

i n i t e t e rm i s a co n t ract at w i l l . . . " W e b e r ' s empl o ymentco n t ract , as reveal e d inthe r e c o rd , w a s f o r a n i nde f

i n i te pe ri od and pe rm i tted hi m to " b e t e rm i n a t e d on w ri tte n no t i ce b y ei t h e rp a rt y . " Th e al l egat i o n s o f A ppe l l a nt' s C o m p l a i nt, i f tru e , c onsti tute a v i o l a t i on of a c l e a r

s tatutory p o l i cy. S e e T .C .A . § 4

- 2 1

- 4 0 1 , § 5 0

- 1

- 3 0 4 . Fi n a l ly , t h e C o m p l a i n t al l eges that A p p e l l a nt w a s ter m i n a ted for re f u s i n g to par t i c i p a te i n the A ppe l l ees ' d i s c ri m i n a tor

yem p l o y m e n t p ract i ces. T h e c ru x of thi s s u i t , h o w ever, i s not w h e t h e r

t h e re i s a c a u s e o f a c t i o n , b u t w h e nt h e c a u s e o f a c t i o n8

accru e d . A l though W

e b s t e ri n v o l ved al l egat i o n s o f e m p l o y m e n t d i s c ri m i n a t i on, an d t h e p resen t case ass e rt s a c l a im f o r re t a lia t o ry d i sch a rge, w e f

i nd that the ra t i ona l e uti l i z e d i n W e b s t e r i s e qua l ly a p p l i cab l e to the c a s e a t b a r . B o t hA p p e l l a n t a n d t h e p l a i n t i ff i n W e b s t e r a l l eged w rong f

u ldi s c h a rg e ; the form e r on the ba s i s of ra c i a l d i s c ri m i n a t i on, the l a tterf o r re t a lia t io ni n vi o l a t i on of c l e a r s tate pol i c y . A s the W

e b s t e r c ourt sta ted, a n e m p l o y e e w ho bel i e v e s he i s be i n g t e rm i n a t e d b ecau se o f h i s race su f

f e rs t h e al l eged d i scri m i n a t i o non the d a t e the di s c ri m i n a tor ya c t occ u rs ; that i s , w h e n the e m p l o y e e i s i n f o rm e d of

the i m p e ndi n g ter m i n a t i on. T h e e m p l o y e e ' s c a u s e of a c t i on, f o r purpose s of

the s tatute of

l i m i tati ons, a c c ru e s on that da y . W e b s t e r, 902 S . W

. 2 d at 414. S i m i l a rly , i n a s u i t al l e g i n g re tal i a tor ydi s c h a rg e , the e m p l o yee s u f

f e rs the a l l e g e d r e t a l i a t i on on the da t e he i s i n f o rm e d of

the upc o m i n g t e rm i n a t i o n . Th e exi s t e n ce o f a n e m p l o y m e nt contr a c t i n the p re s e n t c a s e , re qui ri n g w ri tte n noti c e of ter m i n a t i on, does not aff e c t our a n a lysi s . Th e p a rt i es st i p u l a t e d tha t A ppe l l a nt w a s v e rb a l lynoti f i e d by A ppe l l e e J ack Mo ses o nA u g u s t 5, 1992, t h a t A p p e l l a n t ' s sal es manager c ontr a c t w i th J e f

f e rs on P i l ot w oul d be te rm i n a ted on A u g u s t 31, 1992. Regard l ess of

the f a c t that A ppe l l a nt di d not re c e i v e w ri tten noti c e of hi s ter m i n a t i o nunti l a f t e r t h a t date , the r e tal i a tor ya c t occ u rre d w h e n A ppe l l e e Mos e s i n f o rm e d A ppe l l a nt of hi s i m p e ndi n g ter m i n a t i on.

F o r t h ese reaso n s , w e h o l d that A ppe l l a nt' s c a u s e of act i o naccru e d n o l a t e r

tha n A u g u s t 5, 1992; the da t e A p p e l l a nt w a s tol d of the9

i m p e ndi n g te rm i n a t i on, a nd not on A u g u s t 31, the da t e A ppe l l a nt' s t e rm i n a t i o nb ecame eff ect i ve.

A c c o rd i n g ly , w e af f i rm the de c i s i on of the c h a n c e l l o r . C o s t s a re t a x e d to the A ppe l l a nt.

H I G HERS, J . TOMLI N , S R . J . ( C o n c u rs )

C R A W FORD , P. J . , W

. S . ( D i ssen t s ) ( S e e s e p a ra te Di s s e nti n g O p i n i on)