§ 6.1.5 ARIZONA PUBLIC POLICY CASES.

JurisdictionArizona

§ 6.1.5 Arizona Public Policy Cases. The public policy exception is a judicially-recognized exception to the employment-at-will doctrine.50 The exception originally enabled an employee to recover from an employer when a statute expressly prohibited the termination of an employee for the reason alleged.51 It was subsequently expanded to protect employees from discharges that violated more general statutory expressions of public policy.52 The Arizona courts ultimately interpreted the exception even more broadly to permit terminated employees to assert tort claims for wrongful discharge when their terminations violated the public policy expressed in "constitutional, statutory, and common law."53

However, the Arizona courts were initially slow to recognize the public policy exception.54 As late as 1977, the Arizona Court of Appeals noted that while several jurisdictions had recognized exceptions to the employment-at-will rule, Arizona had no authority limiting an employer's right to discharge its employees.55 Three years later, the same court refused to recognize an exception to the at-will doctrine for discharges motivated by bad faith or malice,56 and also declined to adopt the public policy exception.57

Finally, in 1984, the Arizona Supreme Court decided Leikvold v. Valley View Community Hospital,58 in which it noted that courts in other states had recognized an exception to the employment-at-will rule where an employer "discharges an employee for a purpose which contravenes public policy,"59 and Fleming v. Pima County,60 in which it for the first time recognized a tort claim for wrongful discharge.61 The Fleming court held that an employee can maintain such a claim where the employer has breached a duty imposed upon it independently of the employment contract.62 Although the duty at issue in Fleming arose as the result of a "statutorily implied covenant of 'cause' for discharge,"63 the court in that case equated its holding with other state courts' recognition of the public policy exception.64

The erosion of Arizona's employment-at-will rule continued in the following year, when the Arizona appellate courts decided Winter v. Coor,65 Vermillion v. AAA Pro Moving & Storage,66 and Wagenseller v. Scottsdale Memorial Hospital.67 In Winter, the Arizona Supreme Court stated, without elaboration, that the at-will rule is subject to "certain public policy exceptions."68 Shortly thereafter, the Arizona Court of Appeals formally recognized the public policy exception in Vermillion,69 and the Arizona Supreme Court followed suit approximately six weeks later in Wagenseller.70

In Vermillion, an individual who claimed to have been discharged for refusing to conceal his employer's theft was permitted to pursue a wrongful discharge claim premised upon the public policy exception.71 The court held that such a termination violates the public policy expressed in the Arizona statute prohibiting theft.72 It asserted that its ruling was a logical extension of the analysis in earlier Arizona appellate decisions,73 and that any other conclusion "would encourage unlawful conduct by employers and force employees to consent and participate either in a violation of law or risk termination."74

In Wagenseller, the plaintiff's employment was purportedly terminated when she refused her supervisor's request that she join in a parody of the song "Moon River" that concluded with the participants "mooning" the audience.75 She then brought suit against her former employer for wrongful discharge, alleging that her termination violated public policy.76

After extended discussions of both the employment-at-will doctrine77 and the emerging public policy exception,78 the Wagenseller court formally adopted the exception, noting the similar recent holding by the Arizona Court of Appeals in Vermillion.79 The Wagenseller court indicated that its research had revealed no case in which a court considering a termination that violated a clear mandate of public policy had declined to adopt the exception.80 The court concluded that it, too, could not justify further adherence to a doctrine that permitted employers to discharge their employees for "cause morally wrong."81

The court also stated that the key to invoking the exception lies in defining the public policy allegedly violated by the employer's actions.82 In this regard, the court concluded that the applicable public policy can be found in some (but not all) provisions of Arizona's statutory and constitutional law.83 The court held that litigants also could look to the decisions of Arizona's courts to discern the state's public policy,84 although it stated that "courts should proceed cautiously if called upon to declare public policy absent some prior legislative or judicial expression on the subject."85

Noting that the impropriety of an employment termination will seldom be clearer than when the termination violates the public policy reflected in a criminal statute,86 the Wagenseller court held that the plaintiff in that case need not prove an actual violation of the criminal statute where she asserted a wrongful discharge claim premised upon the contention that she was terminated for refusing to participate in conduct that might have violated Arizona's indecent exposure statute.87 The court stated that "[t]he legislature has . . . concluded...

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