Opinion ID: 1182150
Heading Depth: 1
Heading Rank: 2

Heading: scope of exception: violations of federal law and laws of other states

Text: We turn first to the question of whether the public policy exception as recognized in this state includes violations of federal law and the laws of other states in addition to violations of Utah law. In Adler v. American Standard Corp., 538 F.Supp. 572 (D.Md.1982), a discharged employee alleged, among other things, that he was terminated from his employment after he threatened to expose violations of federal tax laws. He claimed that the tendency of the firing was to prevent disclosure of illegalities in contravention of federal policy. In response, the employer argued that in an action raising a state's public policy exception, an employee could not rely on federal law as the source of the public policy contravened. In concluding that federal law can be incorporated as the public policy of a state, the court stated: It is in no way offensive to state sovereignty to engraft federal public policy within the civil law. If [the employer's] arguments were to be adopted, this Court would accept the proposition that the [state], as a matter of public policy of its own, should not be concerned with serious violations of federal law.... This Court cannot agree that the [state] should close its eyes and, as a matter of policy, not be concerned with violations of federal law. Id. at 578-79. A number of state courts likewise have recognized that certain federal laws may properly form the basis for a wrongful termination action under a state's public policy exception. See Tameny v. Atlantic Richfield Co., 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330 (1980) (state action based on violation of federal price fixing laws); Boyle v. Vista Eyewear, Inc., 700 S.W.2d 859 (Mo.Ct.App.1985) (state action based on violation of federal Food and Drug Administration regulations); Sabine Pilot Service, Inc. v. Hauck, 687 S.W.2d 733 (Tex.1985) (state action based on violation of federal water pollution laws). We are not prepared to hold, however, that a violation of any federal or other state's law automatically provides the basis for a wrongful termination action based on the Utah public policy exception. Many ancient, anachronistic, and unenforced criminal sanctions remain on the books of local, state, and national governments. Violations of such laws would not necessarily violate Utah public policy. To provide the basis for an action under the public policy exception, a violation of a state or federal law must contravene the clear and substantial public policy of the state of Utah. Although many state and federal laws will reflect Utah public policy, and may, in fact, provide a source of Utah public policy, a plaintiff must establish the connection between the law violated and the public policies of Utah. That has been done here. In the present case, it is alleged that the employer discharged the employee because he would not falsify tax and customs documents. Such falsification involves serious misconduct and is in all likelihood a felony. See 18 U.S.C. § 542 (1988); Mo.Rev.Stat. § 150.260 (1986). To hold that one's continued employment could be made contingent upon his commission of a felonious act at the instance of his employer would be to encourage criminal conduct upon the part of both the employee and employer and would serve to contaminate the honest administration of public affairs. Petermann, 344 P.2d at 27. Based on the information available to us, it appears that the Utah public policy at issue is both clear and substantial. Persons who are terminated from their employment because they refuse to engage in illegal activities that implicate clear and substantial Utah public policy considerations should be protected regardless of whether the applicable law is that of Utah, the federal government, or another state. [3] The effect on the employee of having to choose between keeping his job or following the law that governs him is the same regardless of the origin of the law. Accordingly, we hold that an attempt to coerce an employee to violate the state tax law and federal customs statute at issue contravenes the clear and substantial public policies of the state of Utah. Thus, a discharge resulting from an employee's refusal to violate such laws is actionable under the public policy limitation. [4]