Opinion ID: 1997619
Heading Depth: 2
Heading Rank: 2

Heading: Recognized Exceptions to Employment At-Will

Text: With respect to the termination of at-will employment, the Court in Merrill held that the duty of good faith may be breached by termination in some circumstances ... or some other public policy implicated by such a termination.... Id. at 102. Merrill made clear the limited range of situations in which the duty may be breached, citing cases which illustrate the limitation. [11] These cases, taken together with the facts of Merrill, support the proposition that the Covenant limits at-will employment only in very narrowly defined categories. [12] See Wagenseller v. Scottsdale Mem. Hosp., 147 Ariz. 370, 710 P.2d 1025, 1031 (1985) (The trend has been to modify the at-will rule by creating exceptions to its operation). The Supreme Judicial Court of Massachusetts, in the well-known case of Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251 (1977), held that a rational jury could find that the employer had breached the Covenant by terminating a commissioned salesman after he had secured a large sale but before he became entitled to the commission at closing, simply to avoid paying him the commission. In Magnan v. Anaconda Indus., Inc., 193 Conn. 558, 479 A.2d 781, 788 (1984), the Supreme Court of Connecticut held that a plaintiff could survive summary judgment on his claim that the employer fired him in retaliation for refusing to sign an untrue statement, noting that breach of the Covenant cannot be predicated simply upon the absence of good cause for a discharge. In Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 (1974), the New Hampshire Supreme Court held that an employer breached the Covenant when it terminated an employee for refusing the sexual demands of her employer. Monge has been cited to stand for a public policy exception to at-will employment. Wagenseller, 710 P.2d at 1032. The public policy exception, whether conceived of independently as a tort or as arising from the Covenant, generally requires a clear mandate of public policy. As Chancellor Allen has described this category: [E]mployees who seek protection from firing on the basis that their actions were protected by a public policy, must assert a public interest recognized by some legislative, administrative or judicial authority, and the employee must occupy a position with responsibility for that particular interest. Shearin v. E.F. Hutton Group, Inc., Del.Ch., 652 A.2d 578, 587-89 (1994) (lawyer employee fired for refusing to violate her ethical duties may have a cause of action). [13] Pressman's claim cannot fit within the public policy category since he does not identify an explicit and recognizable public policy. He alleges that DuPont fired him in retaliation for questioning the propriety of Pensak's business practices. This fact, standing alone, does not rise to the level of a legally cognizable public policy exception. As one treatise states: Employees who uncover and blow the whistle on questionable internal financial and business practices [absent illegality] have won no support from the courts. Holloway & Leech, Employment Termination: Rights and Remedies at 180, (2d ed. 1993) (citing cases). Another category of exceptions to the Doctrine created by the Covenant is exemplified by Merrill. In these cases, the employer is liable for misrepresenting some important fact, most often the employer's present intentions, and the employee relies thereon either to accept a new position or remain in a present one. In Shebar v. Sanyo Bus. Sys. Corp., 218 N.J.Super. 111, 526 A.2d 1144 (1987), aff'd, 111 N.J. 276, 544 A.2d 377 (1988), the defendant-employer convinced an executive not to resign in favor of a competitor's offer. Four months later, the executive was summarily fired. The court held that the executive stated a claim for fraud. Id.; see also Wildes v. Pens Unlimited Co., Me. Supr., 389 A.2d 837 (1978) (claim stated for fraud where company hired employee from another job knowing that position would be eliminated within days). This category is not applicable to the facts of this case. Another exception applies when an employer uses its superior bargaining power [to] ... depriv[e] the employee of `compensation that is clearly identifiable and is related to the employee's past service.' Magnan, 479 A.2d at 788 (quoting Cort v. Bristol-Myers Co., 385 Mass. 300, 431 N.E.2d 908, 910 (1982)); see, e.g. Fortune v. National Cash Register, 373 Mass. 96, 364 N.E.2d 1251 (1977); Zimmer v. Wells Management Corp., S.D.N.Y., 348 F.Supp. 540 (1972); Metcalf v. Intermountain Gas Co., 116 Idaho 622, 778 P.2d 744 (1989). The Arizona Supreme Court has described this line of cases as protecting an employee from a discharge based on an employer's desire to avoid the payment of benefits already earned by the employee, such as the sales commission in Fortune.... Wagenseller, 710 P.2d at 1040. [14] Pressman's claim also does not fall in this category. In its verdict for DuPont on the implied-in-fact contract claim, the jury necessarily found that Pressman did not have a promise of secure employment. He has not identified another benefit to which he was entitled, such as earned commissions.