Rights of Terminated Employees: Expanding Remedies
| Publication year | 1992 |
| Pages | 1639 |
1992, August, Pg. 1639. Rights of Terminated Employees: Expanding Remedies
In a trio of recent decisions, Colorado courts have given substantial assistance to employees bringing claims for wrongful discharge against their former employers. While these cases are precisely in step with national trends, they signal that it no longer is "business as usual" for Colorado employers. This article discusses the three decisions and their potential ramifications for Colorado employers and terminated employees.
In Martin Marietta Corp. v. Lorenz,(fn1) the Colorado Supreme Court held that an at-will employee states a claim for wrongful discharge, as a tort, where (1) the employee has been discharged in retaliation for the employee's refusal to perform an illegal act as part of the employee's work-related duties or (2) the employer has prohibited the employee from exercising an important job-related right or privilege.
In Zook v. Paradygm Science & Technology, Inc.,(fn2) the Boulder County District Court held that CRS § 8--4--101 et seq. ("Wage Act") expressly provides for piercing the corporate veil in order to impose individual liability on corporate officers and agents. The Wage Act provides employees with special remedies on the unjustified refusal of an employer to pay an employee all previously earned but unpaid wages immediately on termination.
More recently, in West v. Minnesota Mining & Manufacturing Co.,(fn3) another case under the Wage Act, the U.S. District Court for the District of Colorado held that a case originally filed in state court was not removable to federal court, even where all requirements for removal otherwise have been met.
The import of these cases is discussed in more detail in the following sections.
In Lorenz, the Colorado Supreme Court addressed, among other issues,(fn4) whether Colorado law recognized a tort claim for wrongful discharge predicated on an at-will employee's refusal to perform an illegal act. The case was before the Supreme Court on the review of a directed verdict against a former employee of Martin Marietta.
The trial court had dismissed the case at the close of the plaintiff's evidence, ruling that (1) Colorado did not recognize a claim for wrongful discharge and (2) the employee's claim was time-barred by the passage of more than six years(fn5) following the notice of termination given to him. The Colorado Court of Appeals had reversed the trial court's decision, based on its own decision in Cronk v. Intermountain Rural Elec. Ass'n.(fn6) Cronk held that a claim for wrongful discharge is cognizable in Colorado if the evidence establishes that the employee refused to carry out an order violative of a specific statute, the terms of which are more than a broad and general statement of policy, and that the employee was discharged as a result of refusing to perform that act ordered by the employer. The Supreme Court affirmed the Court of Appeals' decision and approved with minor modification the test applied in Cronk.
Accepting the facts in the light most favorable to Lorenz,(fn7) the Supreme Court noted three specific instances in which he had been instructed by his superiors at Martin Marietta to alter documents or conceal actions which he felt would constitute a fraud on the National Aeronautics and Space Administration. He refused to do so. Despite the fact that Lorenz was extremely busy with various job responsibilities at Martin Marietta, following the third incident he received a telephone call from his supervisor in which he was told that Martin Marietta was laying him off for lack of work.(fn8)
The Supreme Court reviewed the general state of the law on the cognizability of a claim for wrongful discharge(fn9) as well as the decisions of the Colorado Court of Appeals on that issue. It then held that an at-will employee establishes a prima facie case for wrongful discharge under the "public policy exception"(fn10)
1) that the employer (a) directed the employee to perform an illegal act as part of the employee's work-related duties, (b) prohibited the employee from performing a public duty or (c) prevented the employee from exercising an...
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