Wrongful Termination: Your Rights and Recourse
Walter Biggins, an industrious chemist for Hazen Paper Company, often took work home and fiddled with solvent formulas in his kitchen sink. By all accounts, Mr. Biggins’ concoctions allowed Hazen Paper Company to reduce its releases of hazardous fumes and increase sales. Biggins, because he had substantially enriched the company’s bottom line, though he deserved a hefty salary increase from $44,000 to $100,000. Thomas and Robert Hazen, cousins who ran the family company, proposed giving Biggins stock in the company instead. As time passed, the shares didn’t materialize, and the relationship between the chemist and the principals of the company deteriorated. The 68-year¬old Biggins was fired shortly before he qualified for a pension, and was replaced by a 35-year-old. Biggins’ attorney, John Egan, felt that the owners of Hazen Paper Company had violated the federal pension- protection statute by dismissing Biggins specifically to deny him retirement money. A suit alleging age discrimination was filed. Six and one-half years after Biggins was fired, the case of Hazen Paper Company u. Biggins was brought before the Supreme Court. Biggins was perplexed by all the commotion. “All I wanted was a damn pay raise,” he said.
Thirty years after becoming the first female partner at Chicago’s Baker and McKenzie, Ingrid L. Beall became the first female partner to sue the firm. According to the complaint filed in court, Ms. Beall’s income had fallen 64 percent in the previous three years because she was denied assignments and shunted aside, in violation of the firm’s partnership agreement. Beall acknowledged that the decision to sue was difficult, but she felt she had no choice. “You can’t be a wimp and walk away from a bad situation,” she said “It’s important for the people behind me.”
According to the Dec. 8, 1992, issue of The Wall Street Journal, age- discrimination inquiries to the American Association of Retired Persons surged by 156 percent from 1990 to 1991, The Equal Employment Opportunity Commission and similar state agencies have been deluged, too. According to the Journal report, nearly 22,800 age- discrimination complaints were filed with the Commission and state agencies in the first half of fiscal 1992, equaling the total number of complaints filed in 1985.
When attorney Don Sessions began practicing law in 1976, he represented both employers and employees in work-related issues. Then, in the mid-80s, Sessions’ practice experienced a noticeable rise in the employee requests for legal assistance. The case that made Sessions want to discontinue corporate representation and concentrate solely on the employee perspective involved a man who was fired a year and a half into a long-term employment contract. According to Sessions, his client had discovered some illegalities in the company’s operation, but when he reported these to his boss, he was told to keep his mouth shut. Soon after that, the man was fired.
The employee’s complaint, which contained sensitive company information. was eventually settled out of court for half a million dollars.
Very few lawyers practice this specialty, says Sessions. “Most people have a tough time finding someone to help them pursue workplace justice,” Sessions observes, “because these suits can be time- consuming and costly.”
For Sessions, this kind of work has become more than a way to earn money. Each story is different and each is loaded with emotion. Many of his clients break clown into tears as they describe their situations. “I have been extremely busy helping people,” says Sessions. “Because each case presents an employee grievance, I often feel like an employee advocate.”
Sessions offer the following ten-point guide as a brief introduction to employee law—but he cautions: “Labor law is extremely complex. constantly changing, and subject to different interpretations. Do not rely on a magazine article or short seminar to determine your best legal avenues.”
1. The right of an employer to fire an employee “at-will” is limited.
The right of an employer to terminate an employee at will, with or without cause, was confirmed by the courts in the late 1800s and reinforced by subsequent statutes and court rulings. This is the main defense employers use against terminated employees. Yet an employer’s right to terminate a worker can be limited by an oral or written contract between the employer and employee. If the person who hired you, or a representative of the company, made promises to you, either in writing or orally, then the company must abide by those promises.
2. Employers cannot terminate employees for discriminatory reasons such as race, color, gender, religious beliefs, pregnancy, age, physical handicap, veteran status, national origin, and marital status.
An action is discriminatory when an employer has practiced a double standard within a given group and the employer’s actions have violated a Constitutionally protected area, such as race, age or religion. (It is not discrimination for an employer or supervisor to say, “I don’t like short people or bald people.”) Some discriminatory and statutory practices are well-publicized and more recognizable.
• Sex discrimination. One of the Sessions’ clients was a female vice president in a company in which the male president of the company— because he wanted to get to know his executives better—played golf with the male vice presidents. Yet he never invited the female vice president (who was an excellent golfer) to join them. He, therefore, denied the female executive an opportunity that was given to the male executives. That, Sessions says, is sex discrimination.
Another one of his clients, a female office manager, was subjected to her employer’s vulgar jokes and gestures, manhandling and indecent photos of himself. Her employer’s actions created tremendous stress for her, so she quit her job. She had been a victim of sexual harassment and discrimination. The determined financial settlement was generous.
• Age discrimination. While it is understandable that companies may need to lower expenses, layoffs based on age and salary alone are not lawful. Sessions’ age-discrimination cases have usually involved employees with careers of 30-plus years, as well as excellent reviews throughout. Employees in their late 50s and early 60s are often in the higher salary bracket. There is little chance, he says, that they will find comparable employment elsewhere.
• Racial discrimination. Another of his clients was a Caucasian engineer who helped an Asian company set up in the United States. The company grew to be a multimillion-dollar enterprise. More Asian employees were hired and promoted, but the engineer who participated in the setup of the company was overlooked and finally terminated. The engineer pursued his rights—and won!
Punitive damages are based on the wrongfulness of the acts committed and the relative wealth of the employer. If the claim is projected to include the anticipated salary through retirement, the damages can be astronomical.
3. Employers cannot retaliate against you for doing what you have a legal right to do.
Remember, society and the courts are interested in your legal rights. Society, Sessions says, doesn’t care whether you and your boss had a blowout overthrowing the Christmas party at the Ritz
Carlton or the local high school gymnasium, but society does care about Constitutionally protected issues, such as unsafe working conditions or your obligation and right to serve on a jury.
• An employer cannot retaliate against an employee who reports illegal activities of the company. For instance, an employee who discovers that his or her employer is under-reporting earnings to the Internal Revenue Service can complain to the employer and/or the IRS without fear of reprisal.
• Employers cannot force employees to act illegally. One of the Sessions’ clients worked for a tour bus company. The owner of the company was telling the drivers that they had to work 100-hour weeks. That is against Department of Motor Vehicle regulations. “Would you want to put your well-being in the hands of a driver who had been working a 100-hour week?” Sessions asked. “The drivers who complained were fired. They have a good case.”
• Employees cannot be forced to work in unsafe conditions. The Occupational Safety and Health Administration (OSHA) has rules and regulations that
govern the workplace and are designed to minimize the risk of injury. For instance, according to Sessions, it is the responsibility of the employer to insist on safety glasses, steel-toed shoes and helmets when needed; to properly ventilate the work area; and to keep cords out of walk-ways or secured within them. An employee cannot be forced to work under risky conditions. Employer-violation cases are often settled quickly out of court because a public lawsuit would broadcast company shortcomings. Out-of-pocket and punitive damages are considered in these cases.
4. An employer cannot breach the contract.
At-will termination, discrimination and retaliation, while claims in themselves, may also constitute a breach of contract. Promises regarding discrimination/retaliation are often made in the company manual. Other times, Sessions says, these promises are implied throughout the working relationship or established by the usual practice of the employer.
For instance, if an employer has a policy of annual reviews or one to three disciplinary warnings before dismissal, then the employer must apply that policy to all employees. Sessions: “My favorite question to ask at seminars is, ‘How many of you have had an employee evaluation recently?’ Most haven’t. The policy for most companies, often mentioned in the company manual, is to give annual performance reviews.”
An employee who is selected for layoff, or terminated because of poor performance, and who has not had a company-mandated review can simply counter that it’s impossible to correct or improve without someone pointing out what’s being done wrong, according to Sessions. And, even if there is at-will language in the employment application, handbook or other employer policies, the at-will stipulation may not excuse the employer for violating promises made about the term of employment. All employment contracts, he says, contain an implied promise of good faith and fair dealing. Fair dealing is expected in the employer/employee relationship. The statute of limitations on a claim of breach of contract is usually longer than the statute for retaliation or discrimination. It is an easier claim to prove because it can be supported by actual written or oral representation or witnesses.
5. The charge of wrongful termination is often accompanied by additional claims.
According to Sessions, as a wrongful termination case is pursued, additional charges may give the employer the incentive to resolve the issues. These claims include
• Invasion of privacy. If there have been improper actions or inquiries that intrude into the employee’s private life, the employer can be liable for invasion of privacy.
• False imprisonment. Often, when an employer is pushing for a settlement agreement, the employee may be pressured into remaining in the room. This is a form of
• Fraudulent inducement to change jobs. If an employee accepts a position and moves to another city encouraged by the promise of a vice presidency, luxury car, lavish expense account and company-provided housing, and these perks do not materialize, the employer may be using fraudulent means. Fraudulent inducement is a serious charge. Many states allow for multiple damages in these cases. Depending on the state, misleading an employee with false promises may even be a crime.
• Libel and slander. Libel is the intentional misrepresentation of an employee in writing. Slander is the intentional misrepresentation of an employee orally. Many states provide multiple levels of damages, and even criminal damages, against employers who make inappropriate statements about an employee’s work performance. Sessions remember one client, an airline repair technician who had complained about safety violations. He was accused of “slowing production” and “having bad relations with the management.” But, when used alone, these true statements misrepresented the situation. These selected statements harmed the employee’s chances of getting another job.
The fact is, an employer can commit libel and slander without even uttering a word. “Let’s say an employee, who is innocent, has been accused of taking money from the register
and is subsequently fired,” Sessions says. “While pursuing other jobs, the employee will be haunted by that accusation of stealing. As an applicant and interviewee, the employee will anticipate the dreaded question: ‘Why did you leave your last position?’
“A truthful applicant will answer, ‘They accused me of stealing…but it’s really not true.’ But, by saying this, the employee defames him- or herself. If an employer gives you a reason for termination, it must be valid. Otherwise, the employer becomes an accomplice, assisting the employee In defaming him- or herself.”
6. Find out what your ex-employer is saying about you.
It’s always a good idea to find out what kind of reference your former employer is giving you. Sessions recommends private investigation services which specialize in reference documentation. The investigator contacts his client’s former employer and asks the same questions that any prospective
employer would ask. The responses to questions such as “What kind of employee was he or she?” and “Why did he/she leave the company?” are transcribed and verified under penalty of perjury.
Any response can actually benefit the former employee. If the company representative says terrible things about the person or comments on why the employee left, that could be grounds for a slander suit. If the former employer speaks of the person in glowing terms and it differs from what was said at the exit interview, that will work in favor of the employee. If the reference gives a neutral response, then the employee can sleep well at night knowing his former employer Isn’t sabotaging his or her job search effort.
7. Do you have a good case?
Attorneys evaluate a case by weighing three factors, according to Sessions: One, can a case of liability against the employer be established? Two, what are the damages? Three, can an award be collected against this employer? It would be senseless, for instance, to bring even a good claim against an employer who has declared bankruptcy.
8. What are your options? Sessions suggest the following:
• Do nothing. Court cases can be time-consuming, costly and stressful. Some people decide to waive their rights and get on with life.
• Employer internal grievance procedure. A company-established grievance procedure may help you remedy the situation.
• Informal negotiation. It can’t hurt to negotiate a settlement yourself. If you discover that you are not being taken seriously, you can always hire an attorney.
• Union procedures. Members of a union must follow established union procedures with breach-of-contract claims. It is not mandatory to follow union procedures with other claims.
• Governmental agencies. Federal and state agencies have been established to handle claims of discrimination. While representation is free, it often takes months to get the case started and years to settle. Recovery is often limited because these agencies will focus on discrimination alone and not include related claims.
• Small-claims court. A small-claims lawsuit can be quick and very inexpensive, but the limit on recovery in many states is $5,000. If the employee wins, the employer can appeal in superior court where lawyers represent the litigants. Since an attorney can be very expensive and the recovery still limited to $5,000, even winning could mean losing!
• Attorney negotiation. A specialist in employment law immediately recognizes employer violations and knows which buttons to push. An employer has a good incentive to avoid the bad press and potential liability that accompanies litigation, so most cases can be settled out of court.
• Lawsuit. With a lawsuit, liability and damages must be proved. It takes time and money to pursue.
• Workers’ compensation. An employee who is unable to work because of a work-related injury and who has a doctor-authorized leave is eligible for workers’ compensation.
• Unemployment compensation. An employee who is laid off or terminated for reasons other than intentional misconduct qualifies for unemployment compensation. However, a discharged employee cannot apply for workers’ compensation and unemployment compensation at the same time.
9. Take action now! File now!
There is a time limit for filing a wrongful termination claim and related claims, Sessions says. Very often, the deadline is one year from the wrongful act—which may be sooner than the termination date. For some union, government-employee claims and claims to a government agency, the deadline is 30 days or less. Some claims based on federal law must be filed within 90 days, while other claims are allowed for two to four years.
10. Protect yourself on the job.
If you are now working in an uncomfortable situation and if you sense you may be wrongfully terminated, Sessions says to take these steps to protect yourself:
• Keep the company employee handbook at home. Read it.
• Maintain a log of discriminatory incidents.
• Keep the phone numbers and addresses of friends from work at home.
• File written complaints with your employer and keep copies of the complaints at home.
• Keep copies of your employee file and important work documents at home.
For further information on wrongful termination, purchase one of the recently published books on the topic. Your local Bar Association can recommend an employment specialist or the local Yellow Pages can offer a list of attorney specialists who understand employment law.
Orange County Wrongful Termination News
A clip from PBS/DPTV show Due Process. Host Henry Baskin and guests Megan Bonanni (Pitt, McGehee, Palmer, River & Golden [plaintiff]) and Margaret Carroll Alli (Ogletree, Deakins, Nash, Smoak & Stewart, PLLC [defense]) discuss the issue.