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A Review of Vermont Employment Law - Part 2 | Kohn Rath & Meyer LLP - JDSupra
A Review of Vermont Employment Law - Part 2
Reviews Vermont employment law
Download PDF A Review of Vermont Employment Termination law-Cautious Correction to the Abuses of the Employment-At-Will Doctrine Part II C, Roger E. Kohn, Esquire Part I of this article appeared in the Feb-was continued employment); Larose v. tract developed to demonstrate that a ruary issue of the Vermont Bar Association Agway, Inc., 147 Vt. 1. 508 A.2d 1364 (1986); promise could exist without there being spe-Journal. Part I discusses the "employment-Sherman v. Rutland Hospital, Inc., 146 Vt. cifc words which constituted the promise. at-will" doctrine, the possibility that Ver-204, 500 A.2d 230 (1985). A more diffcult Accordingly, in the employment termination mont may adopt an implied covenant of issue arises as to whether such continued context, the second use of the promissory good faith and fair dealing in employment employment, without more, constitutes suf-estoppel doctrine is very similar to -and relationships, and the effect of express and f icient reliance for promissory estoppel. In merges into ---the implied contract theory implied oral or written contracts. Part II will Larose v. Agway, Inc., supra, the Vermont previously discussed in this article. discuss other theories of liability, as well as Supreme Court undertaking a policy analysis and providing held: Nothing in plaintiffs complaint, or V. Termination In Violation Of Public a checklist for use by the practitioner. in plaintiffs affidavit submitted in Policy One of the most well-established and IV. Promissory Estoppel opposition to the motion for summary most useful exceptions to the employment-In Foote v. Simmonds Precision Products judgment, or in the stipulation of the at-wilt doctrine is the doctrine that an Co., 3 Vt.L.W. 98 (May 8, 1992), the Verparties suggests that plaintiff was employee who is fred in violation of a clear mont Supreme Court held that the doctrine aware of, or relied upon, the provi-and compelling public policy has been of promissory estoppel may provide a remesions of the personnel manual in unlawfully discharged. This doctrine has dy in an employment-at-will relationship. deciding to enter into or to remain in been established in numerous cases around Foote cites the Restatement (Second) of defendant's employment. the country. Contracts §90(1) (1981) for the elements of 147 Vt. at 4 (emphasis added). Accord-In Jones v. Keogh, 137 Vt. 562, 409 A.2d promissory estoppel: ingly, it would appear that promissory estop-581 (1979), the Vermont Supreme Court A promise which the promisor pel can be established if the plaintiffs attorstated, in dictum, that the courts have been could reasonably expect to induce ney proves that the employee continued to willing to entertain suits by discharged action or forbearance on the part of remain in the employer's employment employees when there is a "clear and comthe promisee or a third person and because of the promises made to the pelling" public policy against the reason for 4 which does induce such action or foremployee. the discharge. The court cited cases involvbearance is binding if injustice can be The doctrine of promissory estoppel is ing dismissal for serving on a jury; dismissal avoided only by enforcement of the applicable in wrongful termination cases in for filing a workers' compensation claim: promise. two ways. First, as represented by the Foote and dismissal for refusal to give perjured Id., 3 Vt.LW. at 100. case, if an employer makes specifc promis-testimony. In Jones, the court refused to fnd The difference between promissory es to an employee, and then does not keep such a clear and compelling policy based estoppel and a contract is that a contract them, the doctrine applies. In Foote, the merely upon allegations of bad faith, malice, requires consideration to support it. where-employee was promised that he would not and retaliation for reliance on contract as promissory estoppel requires reliance by be penalized for utilizing the grievance prorights. the person to whom the promise is made, in cedure set forth in the employee handbook, Payne v. Rosendaal, 147 Vt. 488, 520 A.2d lieu of consideration? but he was subsequently fired when he did 586 (1986), reaffirmed and substantially The question arises whether merely conso. expanded the doctrine. Payne held that a tinuing to work for an employer constitutes The second use of promissory estoppel is discharge from employment solely on the consideration on the part of the employee to make the same arguments which were basis of age contravenes a clear and comfor an implied contract and/or reliance sufpreviously mentioned as contract theories pelling public policy, although at the time of ficient to make out a claim for promissory -namely, that a promise was made, and the incident on which the case was based estoppel. With regard to consideration relied upon by the employee, that the there was no statute prohibiting discriminarequired to support an implied contract, employee would be treated fairly, and would tion against an employee on the basis of age there are conflicting decisions from the remain employed as long as the employee (the federal and state statutes had been courts in other jurisdictions, although the properly did his or her work and as long as adopted, but were not in existence when the better reasoned cases recognize that there there was work for the employee to do. One cause of action arose). The Supreme Court is no reason not to consider an individual's problem with the promissory estoppel theoexplicitly rejected the argument that the continued willingness to work for an ry in this context is that it is ofen diffcult to public policy exception must be legislatively employer, thereby foregoing other employ-identify a specifc "promise." Although the defined, and gave extremely broad latitude ment opportunities, as consideration. In author has found no Vermont law specifical-in determining what is a clear and com-Vermont, it appears to have been estably on point, it should be possible to argue pelling public policy. The court held that lished that continuing to work for an that the "promise" required by the doctrine such a policy could be determined from "the employer constitutes consideration for an of promissory estoppel can be established community common sense and common i express or implied contract. See Benoir v. by a course of conduct as well as by specifc conscience." 147 Vt. at 492. There are also Ethan Allen. Inc., 147 Vt. 268, 514 A.2d 716 words. After all, a contract also requires a Vermont Superior Court Decisions dealing (1986) (the only consideration in this case "promise", and the doctrine of implied conwith this 32 doctrine.10 THE VERMONT BAR JOURNAL& LAW DIGEST/APRIL 193 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=e3a99cfb-53ae-4966-8635-4df4d2b738f0The "leading edge" issues involving the reason, is harsh and inflexible. If an employ-5. Was the firing in retaliation for making public policy exception are whether the docee has been employed for thirty years with a claim for workers' compensation benefts? trine applies to a termination for exercising the same company, and a new supervisor is 6. Was the firing in violation of any other one's first amendment rights of freedom of hired who takes a disliking to the employee, statutory speech, and the more general prohibition? issue of detershould the employee really have no reme-7. Was the firing in violation of some non-mining exactly how far the doctrine extends. dy? On the other hand, the author believes statutory public VI. Termination For Exercise of policy? Rights that the employment-at-will doctrine sub-8. Were any torts committed, such Under Workers' Compensation as Law stantially adds to economic growth, and is interference with contractual relations Vermont law prohibits or termination of an part of what has made the United States defamation? individual for exercising his or her rights economy competitive. As a result of due 9. If some other tort cannot be made under the workers' compensation out, statute. 21 process and union rights, it is probably is the case outrageous enough, and are V.S.A. §710. The Attorney General has enunduly diffcult to fre governmental employthere facts to support, the tort of forcement powers, and has been intentional quite vigiees; it is unlikely to be good policy to dupliinfliction of emotional lant in enforcing the statute. distress? Injured employcate this problem in the private sector. 10. Are there facts to support the ees also have certain rights to breach reinstatement Accordingly, the author does not believe of an implied contract or a claim for upon their recovery, and promisattorney's fees can that a requirement should be imposed in all sory estoppel? be recovered in an action to enforce these employment relationships that termination 11. If liability is established, are there rights. 21 V.S.A suf-§643b(e). be only "for cause." ficient damages to make the case What then is the solution? The worth purauthor suing? VII. Tort Theories believes that the best way for the courts to A bibliography appears at the end of Wrongful terminations of this employment ameliorate the problems with the "employarticle, setting forth the most often include various torts upon important Verwhich a ment-at-will" doctrine is to adopt the docmont cases concerning wrongful remedy can be based. Those torts terminawhich are trine that every employment relationship tion, as well as some secondary most commonly involved are sources intentional includes a "covenant of good faith and fair which may be of infliction of emotional distress"; use. intentional dealing". Should the legislature interference with contract"'; and decide to defamalegislate in this area, it would appear to the XI. Summary tion's. author that the seniority of an employee is Except in cases of employment the most important factor in discrimidetermining nation, for which statutory protection VIII. Government is pro-Employment vided, the Vermont law of employment terwhether the employee should have rights If the employee is employed by a town, when he or she is terminated. mination has been in the past, and city, or the state, or by an entity remains which can at present, very much oriented in be considered to be covered by favor of the doctrine X. Practice Pointers the employer. However, the law is in of "state action" (such as a state the university If an employee calls an attorney and comprocess of changing, so that at least or a federally-funded program), in egredue process plains that he or she has been unfairly tired, gious cases a remedy will be rights must be afforded when the provided for all employee the attorney has a diffcult task of determinemployee who has been unjustly is terminated, and the various and arbiprovisions of ing whether the case is viable. The most trarily fred. To represent an employee the Civil Rights Act (42 U.S.C. in §1983 et seq.) important factor is whether the employee this area of the law it is necessary for may apply. A delineation of these an rights is has truly been treated with substantial attorney to be innovative in an beyond the scope of this article. It attempt to is imporunfairness. If the case does not pass this obtain a just result for the tant to note, however, that in client. the event of a threshold test, it is probably not violation of due process, or a worth takviolation of 42 ing on. It must be kept in mind that U.S.C. §1983, a plaintiff can employrecover attorment termination cases are extremely diff-"Because the impact of an enforceable ney's fees -both in federal and promise state court cult. Wrongful termination cases in which is unexpected and unintended in the -pursuant to the provisions of 42 case of U.S.C. the employer has not illegally discriminated promissory estoppel, reliance on the ipsr ormigioserously required. Overlock v. Central Ver-§1988. Plaintiffs must also keep in mind that against the employee, or otherwise violated mont Public Service Corp., 126 Vt. 549. if the provisions of 42 U.S.C. §1983 are a statutory prohibition, are some of 55;, 2:17 the most A.2d 354 alleged in state court, as they (1967). may be, the diffcult cases to pursue, and attorneys must ''See Brown v. Harbour Industries, Inc., defendant may have the right to Chittenremove the beware of taking on a case which will den Superior Court, Docket No. case to federal court, arguably a S495.85 CnC less desirinvolve lengthy litigation for little remunera-(August It. 1986). Taylor v. Williamson. tion. Franklin Superior Court, Docket No. 5434-90 able forum for the plaintif in a wrongful ter-Fc (June 25. mination claim. 28 U.S.C. 1992). §1441. To analyze the viability of the case, the "Thee tort of intentional infliction of attorney should consider the emotional following distress was recognized in Vermont in the IX. Policy Questions -Are Current checklist: case of Sheltra v. Smith. 136 Vt. 472.392 A.2d Developments In The law A Good Idea? 1. Was there a written employment con-431 (1918). In the wrongful termination Having generally outlined the law case of tract? of Cramp v. P & C Food Markets, wrongful termination in Vermont Inc.. 154 Vt. and the 2. Is the employer unionized? 284. 576 A.2d 441 (194x)). a jury manner in which the contours of verdict based this area of on this tort was upheld. Birkenhead v. Coombs, 3. Was the firing based upon gender, age, 143 Vt. 167, 174-75, 465 A.2d 244 law are changing, it is (1983), a appropriate to step religion, race. color, national back for a moment to consider origin, anceswhether the landlord-tenant case, also discusses try. place of birth. sexual the docorientation, or trine. Cramp and Birkenhead upheld liability recent developments are a good idea. An because the person was handicapped? in cases where the emotional distress attempt to balance competing was not interests is 4. Was the employee employed by a govparticularly extreme. Accordingly, the very much at work. On one tort in hand, the ernmental entity or an entity the actions of Vermont is probably somewhat "employment-at-will" doctrine, broader than whereby an originally envisioned wider the Restatement, which constitute "state action"? If employee can be fired for any so. was reason or no due process followed? and broader than allowed in many sottahteers. The Restatement presumably TIlE 4lKM1IOV'f IiAK11)IIKN:1La LAW circuni-DIGEST; APKt1. 1993 33 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=e3a99cfb-53ae-4966-8635-4df4d2b738f0scribed the doctrine because the Restatement made that a co-employee or the employee's was essentially "inventing" a new employee may be compelled to publish the tort which supervisor defamed the employee to other reason himself or herself to a new employer. had not been previously recognized. Now that persons within the employing entity. Such because new employers usually want to know the doctrine has found widespread acceptcommunications are likely to be conditionally why the previous employment terminated. ance, the approach taken by the See Vermont privileged, but are not likely to be absolutely Blythe, Workplace Defamation: Public Supreme Court (in not requiring Policy, that the emoprivileged. Second, the issue of defamation Compelled Self-Publication, and the Vermont tional distress be particularly extreme) arises frequently when the reasons for the ter-Constitution. 16 Vt.LRev. 341 appears to the author to be (1991). very sensible. mination are communicated to a `?his tort is well-established in future poten-Vermont. Eg, tial employer. The "leading edge" Trepanier v. Getting Organized, Inc., area of 155 Vt. defamation law in the employment 259. 268-70. 583 A.2d 583 (1990); context is Williams v. whether the requirement that defamation be Roger E. Kohn, of Kohn & Rath, Hines-Chittenden Trust Co., 145 Vt. 76, 80, 484 A.2d burg, is in general "published" can be dispensed with, since practice. an 911 (1984); Vermont National Bank v. Dowrick, 144 Vt. 504. 510, 481 AG.i2rodu 3x9 v6. (L1u9s8s4ie);r, 127 Vt. 520, 523. 253 A2d Bibliography 151 (1969); Mitchell v. Aldrich, 122 Vt. 1631 A9., 22d3 ,833 (1960); In Re Kelton Motors, Inc., Vermont Supreme Court Cases 22State v. Sears, Roebuck & Co., 127 B.R. 548. 552 (D.Vt. 1991). Wash-The Restate. 'Foote v. Simmonds Precision Prodington Superior Court, Docket No. ment makes it clear that one who S47Iintentionalucts Co., 3 Vt.L.W.98 (1992) 83WnC (March 27, 1984) ly causes a third person not to perform a con-13State v. Champlain Cable, tract or enter into a prospective Chittenden contract by 'Ainsworth v. Franklin County giving advice acts non-tortiously Cheese only if the Corp., 2 Vt.L.W. 145 (1991) Superior Court, Docket No. advice is truthful and honest. S633-79CnC Restatement 'Graff v. Eaton, 2 Vt.L.W. 347 (1991) (October 7. (Second) of Torts §772. This 1983) doctrine is most CCrump P. P & C Food Markets, Inc., often used in employment Vermont Federal Court Cases termination cases 154 Vt. 284 by claiming that a co-employee or a (1990) supervisor Payne v. Rozendaal, 147 Vt. 488 (1986) "Buckley v. American Intl Adjustment intentionally interfered with plaintiffs employ-Co., Docket No. 91-242 (D.Vt. March ment contract with his or her 27, employer. 6Benoir v. Ethan Allen, Inc., 147 Vt. 1992) `The standard for defamation in an employ. 268 (1986) 2577tede v. Kraft, Inc., Docket ment case was set forth by the No. 86-Vermont 'Larose v. Agway, Inc., 147 Vt. 1 (1986) 313 (D.Vt. June 4, 1987) Supreme Court in Crump v. P & C Food Mar-5Sherman v. Rutland Hospital, kets, Inc., 154 Vt 284, 576 A.2d Inc., 146 441 (1990). In Vt. 204 (1985) Other Materials Lent v. Huntoon. 143 Vt. 539. 470 A2d 1162 'Brower v. Holmes Transp., Inc., 140 -" (1983), the Court undertook a thorough Vt. 114 (1981) Charge to the Jury in State v. review of the law of defamation. Town of Defamation is Milton, Chittenden Superior used most frequently in Court, employment termina. 70Jones v. Keogh, 137 Vt. 562 (1979) 1t Docket No. S1149-87CnC tion cases in two ways. First, an (February 26, argument is Sheltra v. Smith, 136 Vt. 472 (1978) 1991) 11Lambert v. Equinox House, Inc., 126 27Charge to the Jury in Robbins v. Har-Vt. 229 4 (1967) bour Industries, Inc., Chittenden Vermont Superior Court Superior Cases Court, Docket No. S921-84CnC, orenv gerrosuendds of federal pre-emption, 150 "State v. Town of Milton, Chittenden Vt. 604 (1988) Superior Court. Docket No. S1149-"'Workplace Defamation: Public Poli-87CnC (January 7.1991) cy, Compelled Self-Publication. and the "Taylor v. Williamson, Franklin Supe-Vermont Constitution," by David rior Court, Docket No. S434-90 Fc J. (2J5u,1n9e92) Blythe, 16 Vt.L.Rev. 341 (192991"V) ermont Employment Law," `,State v. University of Vermont, Profes-Chit-sional Education Systems, Inc. (1986) tenden Superior Court, Docket No. S749-87CnC (November seminar materials) 5,1987) "Materials for the Vermont Bar Asso-"Satink v. National Life Ins., Washing-ciation Continuing Legal Education Proton Superior Court, Docket No. S462-gram: Litigatng Employee Terminations 86WnC (November 3, 1987) in Vermont -February 19, 1988. "State v. RS.D Leasing, Inc., Chitten-31"The Ex-Parte Explosion: When Do den Superior Court, Docket No. S882-Communications with Corporate Employ-86CnC (January 22, 1987) ees Result in Ethical Misconduct?" by 'RBissonnette v. Wheeler, Chittenden Lawrence Weiss and Adam A. Reeves, Superior Court. Docket No. S(D8e8c1e-m8b6eCr n22C, 1986) reprinted in materials for Vermont Bar Association Practice and Procedure 19Brown v. Harbour Industries, Com-Inc., mittee Seminar -Discovery in Vermont -Chittenden Superior Court, Docket No. September 25, 1992 S495.85CnC (August 11, 1986) :12"'Lockwood a State, Washington 82 AmJur.2d "Wrongful Discharge" rioSr uCpoeu.rt, Docket No. S290-85WnC For two important cases (April 4, 1986) dacmoangcesrn fionrg emotional distress, 2'Graff v. Eaton, Washington see Superior Nichols v. Central Vermont Railway Court, Docket No. S169-85WnC Co., 0 (October 94 Vt. 14 (1919), and Russell v. 28, Insurance 1985) Company of North America, Civil Acton No. 82-264 (D.Vt. 1985). THF. VERMONT BAR JOURNAL & LAW DIGEST/APRIL 1993 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=e3a99cfb-53ae-4966-8635-4df4d2b738f0Postscript Subsequent to the foregoing article, the Vermont Supreme Court decided Taylor v. National Life Insurance Co. (No. 92-389, December 17, 1993). Taylor reviewed Vermont termination law, and then held "that personnel manual provisions inconsistent with an at-will relationship may be used as evidence that the contract of employment requires good cause for termination despite the fact that the manual was not part of the initial employment agreement." Accordingly, the Vermont Supreme Court held that an employee manual could constitute a unilateral contract binding against the employer. To the extent that Larose v. Agwpy. Inc., 147 Vermont 1, 508 A.2d 1364 (1986) was inconsistent with this holding, Larose was overruled. Taylor also held that economic circumstances that necessitate employer layoffs constitute good cause for termination. Accordingly, termination for this reason would not be a breach of contract absent a "clear and specific" promise to the contrary in an employment manual or in an oral agreement. The court agreed that a plaintiff could challenge the procedure followed in his discharge, even though economic necessity represents good cause for termination, but the court found that Taylor had not presented sufficient evidence to go to a jury on that issue. t Taylor represents an important case, particularly in its holding that an employment manual is binding upon the employer, even if not bargained for upon commencement of the employment. This, coupled with the doctrine that every contract includes a covenant of good faith and fair dealing, as discussed more fully in the foregoing article, provides some new protection for Vermont employees. B51/323posts KOHN & RATH A,. 'YENS AT LAW BOX 340 .q1? ESBURG. VERMONT 05461 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=e3a99cfb-53ae-4966-8635-4df4d2b738f0
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