Employment at Will and the Discharged Employee in Colorado
| Publication year | 1983 |
| Pages | 733 |
1983, May, Pg. 733. Employment At Will and the Discharged Employee in Colorado
Lynn D. Feiger, Denver, is a sole practitioner.
Because of the difficulties the economy has experienced during the last year, the firing of employees has become an increasing concern for employees and employers alike. This article provides an overview of the legal rights of discharged employees under Colorado law, with an emphasis on how these rights may be affected by new developments in other states.
The legal doctrine of "at will employment" which governs employee rights has undergone significant changes in many states during the past few years and, as a result, non-union employees are receiving new legal protections. Although these changes for the most part have not yet come to Colorado, attorneys advising employees and employers in Colorado should be aware of what is happening nationwide in this area and how these changes may affect their clients.
Attorneys traditionally have advised employees and employers that liability could result from only certain limited discharge situations. Some of these include fixed-term employment contracts; protected union employees; discrimination based on race, sex, age, religion, national origin or handicap; and government employees with administrative, statutory or constitutional rights which have been violated.
Today, clients need to be advised that there is at least the possibility of liability in the following situations:
Until the mid-nineteenth century, the employment relationship was regulated by the Statute of Labourers. The Statute of Labourers provided that an employee hired to perform menial labor could not be terminated except for "reasonable cause" and further provided that an employee, absent a contrary provision, was presumed to be hired for a year. After the Statute of Labourers was repealed, the English courts adopted the rule that employees could be terminated upon "reasonable notice." The American courts, following a doctrine referred to as Wood's Rule, adopted the rule known as "contracts at will." This rule states that employment contracts, absent a contrary provision, are presumed to be terminable at will by either party.(fn6)
In Colorado, as in other states, the at will rule has meant historically that in most cases employees were not permitted to sue for damages upon their termination.(fn7) This could be true even where the contract was for permanent employment. According to the Colorado Court of Appeals in Justice v. Stanley Aviation Corporation:
... assuming arguendo that there was an agreement for permanent employment, this alone does not establish a term of employment for one year. In the absence of special consideration or an express stipulation as to the duration of the employment, a contract for permanent employment is no more than an indefinite, general hiring terminable at the will of either party.(fn8)
In recent years, the at will doctrine has begun to change in many states. The status of the at will doctrine as of 1982 was described as follows by the American Bar Association Section on Labor and Employment:
Altogether, some ten states have been prepared to modify the at-will concept in one way or another through holdings or dicta: California, Connecticut, Illinois, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, Oregon, and West Virginia. Less definite expressions of a willingness to revise the doctrine in
appropriate circumstances are found in eight more states: Colorado, Idaho, Iowa, Kentucky, Montana, Nebraska, Vermont, and Wisconsin. On the other hand, nine jurisdictions have recently reaffirmed the at-will principle: Alabama, Arizona, District of Columbia, Florida, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina. Finally, four states can be classified as accepting or stating they would accept modifications in certain situations while rejecting them in others: Indiana, New York, Pennsylvania, and Washington.(fn9)
Court decisions in states which have eroded the doctrine of at will employment can be divided roughly according to the following underlying theories for causes of actions:
(1) cases finding a tort of wrongful discharge, generally where the employee's termination is in violation of public policy;
(2) cases focusing on an implied covenant of good faith or duty of fair dealing in the employment contract, which covenant has been breached;
In Colorado, although the employment at will doctrine is still the applicable law, there is dictum in at least one case: Lampe v. Presbyterian Medical Center arguably implies the existence of a cause of action where an employee is terminated for exercising a clear statutory right.(fn10)(3) cases focusing on the employment contract itself, which has been breached.
This article discusses the theories used to circumvent the restrictions of the contract at will doctrine in other states and remedies potentially available to the discharged employee in Colorado.
The most dramatic example of the abrogation of at will employment in the states which have modified this doctrine is the wrongful discharge tort.(fn11) A leading case involving this new tort is Tameny v. Atlantic Richfield Co., in which the California Supreme Court allowed a tort remedy including punitive damages for an employee who was terminated because he refused his employer's instructions to participate in an illegal price-fixing scheme. The basis for the decision of the California Supreme Court in permitting a tort remedy for wrongful...
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