Opinion ID: 901608
Heading Depth: 1
Heading Rank: 3

Heading: At-will Employment and the Public Policy Exception

Text: [¶ 18.] In South Dakota, employment without a specified term is on an at-will basis for which employment can be terminated with or without cause by notice of either party. SDCL 60-4-4. This Court has recognized exceptions to this doctrine where an at-will termination is contrary to public policy. See Johnson v. Kreiser's, Inc., 433 N.W.2d 225, 227 (S.D.1988) (holding that an employee who was discharged in retaliation for refusal to commit an unlawful act could state a cause of action for wrongful termination); Niesent v. Homestake Min. Co. of California, 505 N.W.2d 781, 784 (S.D.1993) (holding that the public policy exception to the at-will employment doctrine includes a cause of action for wrongful termination where the discharge is in retaliation for filing a workers' compensation claim). [¶ 19.] In Dahl v. Combined Ins. Co., 2001 SD 12, 621 N.W.2d 163, we acknowledged that whistleblowing, or the reporting of criminal or unlawful activity to superiors or outside agencies, plays an invaluable role in society. Id. ¶ 12, 621 N.W.2d at 167. While noting that other courts have recognized that employees should not be deterred, but rather encouraged to report unlawful workplace activity if acting in good faith with probable cause, id. (citing Palmateer v. International Harvester Co., 85 Ill.2d 124, 52 Ill.Dec. 13, 421 N.E.2d 876, 880 (1981); Wagner v. City of Globe, 150 Ariz. 82, 722 P.2d 250, 257 (1986)), we held that only whistleblowing which promotes the public good is protected by the public policy exception. Id. ¶ 12, 621 N.W.2d at 167. First Century concedes, and for purposes of this analysis we will assume, that Anderson acted not out of any self-serving motivation, but rather in good faith as a whistleblower acting out of concern for the credit union and its members. Though criminal charges were never filed against Handel, [8] ultimately the First Century board of directors commissioned a second audit to review the suspect accounts and two federal agencies conducted on-site investigations when apprised of Anderson's allegations. Thus, we will also assume for this analysis that Anderson had sufficient reason to believe Handel was conducting criminal or wrongful activity.