5.4 Public Policy Wrongful Discharge

• Library: Virginia Employment Practices and Forms (Virginia CLE) (2015 Ed.)

5.4 PUBLIC POLICY WRONGFUL DISCHARGE

5.401 Wrongful Discharge Claims.

A. In General. While the doctrine of at-will employment remains the law of the land in Virginia, the stakes for employers have been raised in recent years by the Virginia Supreme Court's recognition that an at-will employee may pursue tort claims against a former employer if the employee can assert that the employee's discharge violated Virginia public policy. ⁷³ These claims, referred to as "public policy wrongful discharge claims," may provide a terminated employee with an opportunity for a significant tort recovery against a former employer.

Current litigation focuses on the tort of "wrongful" or "retaliatory" discharge. This tort allows an employee to recover damages if the employee is

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fired for refusing to violate a duty or right conferred by state statute, such as refusing to violate a Virginia criminal statute. The Virginia Supreme Court has recognized that the tort of wrongful discharge has, to some extent, replaced breach of contract suits in employment disputes.

B. Bowman v. State Bank of Keysville. ⁷⁴ In 1985, the Virginia Supreme Court adopted the public policy exception in Bowman v. State Bank of Keysville. In Bowman, two bank employees alleged they were discharged in retaliation for not voting personally held stock as directed by bank officials. Although the employees were terminable at will, the court held that their termination violated the public policy set forth in section 13.1-32 [now section 13.2-662] of the Virginia Code, conferring on them as shareholders the right to vote their own stock.

C. Miller v. SEVAMP, Inc. ⁷⁵ Two years after Bowman, the Virginia Supreme Court addressed the issue of what constitutes a "public policy." In Miller, a former employee brought a Bowman public policy claim based on the employer's alleged violation of its own personnel manual. The court held that an employment manual confers private rights only, not public rights. Consequently, a plaintiff must base a public policy wrongful discharge claim on an existing law designed to protect the "property rights, personal freedoms, health, safety or welfare of the people in general." ⁷⁶

D. Lester v. TMG, Inc. ⁷⁷ When the plaintiff in Lester was terminated after sending an email complaining that the company failed to properly pay him when it unilaterally changed its bonus structure, he brought a Bowman public policy claim under the Virginia Wage Payment Law. The court noted that courts in Virginia have held that an individual's right to compensation implicates a property right which falls within the Bowman exception, and that the plaintiff's termination could be a cognizable claim under the Bowman exception for wrongful discharge claims. ⁷⁸

E. Statutory Whistleblower Provisions. In Ligon v. County of Goochland, ⁷⁹ the Virginia Supreme Court acknowledged that statutory causes of action now exist against employers for retaliatory discharge in certain limited

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circumstances. In addition to the whistleblower protection provision in the Virginia Fraud Against Taxpayers Act, ⁸⁰ the General Assembly has provided a statutory cause of action for retaliatory discharge for any employee who files a safety or health complaint ⁸¹ and for any employee who is fired for filing a workers' compensation claim. ⁸²

The Virginia Fraud and Abuse Whistleblower Protection Act ⁸³ prohibits discrimination or retaliatory action against an employee of a state agency "who witnesses or has evidence of wrongdoing or abuse and who makes or demonstrates by clear and convincing evidence that that he is about to make a good faith report of [such activities]." ⁸⁴ A 2014 amendment to the Act extends this protection to any citizen of the Commonwealth who reports wrongdoing by a state agency. ⁸⁵

5.402 Discrimination Actions. In Lockhart v. Commonwealth Education Systems Corp., ⁸⁶ the court significantly broadened the public policy foundation established in Bowman by allowing wrongful discharge claims in two cases based on one plaintiff's status as an African-American and the other plaintiff's status as a female. The two discrimination appeals were heard together.

The court relied on the Virginia Human Rights Act (VHRA) ⁸⁷ as the basis for finding that the plaintiffs had been terminated against Virginia's public policy as embodied in that statute. ⁸⁸ The court went on to explain: "We recognize that the Virginia Human Rights Act does not create any new cause of action. . . . Rather, we rely solely on the narrow exception that we recognized in 1985 in

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Bowman, decided two years before the enactment of the Virginia Human Rights Act." ⁸⁹

With the court's pronouncement, written by Justice Hassell, not only were employee actions in reliance on the state's public policy protected, but an employee's status also received protection. Following Lockhart, when an employee fell within a protected "class" of persons defined by a Virginia statute, discharge of that person because of membership in that class violated Virginia's public policy and provided the basis for an action for public policy wrongful discharge.

In 1995, however, one year after Lockhart, the General Assembly amended the VHRA to provide that the exclusive remedy available for "torts" based on any public policy reflected in the VHRA would prospectively be the administrative procedures provided in the Act itself. Section 2.2-3903(D) ⁹⁰ of the Virginia Code now provides:

D. Causes of action based upon the public policies reflected in this chapter shall be exclusively limited to those actions, procedures and remedies, if any, afforded by applicable federal or state civil rights statutes or local ordinances. Nothing in this section or § 2.2-3900 shall be deemed to alter, supersede, or otherwise modify the authority of the Division or of any local human rights or human relations commissions established pursuant to § 15.2-853 or 15.2-965.

In 1997, in Doss v. Jamco, Inc., ⁹¹ the Virginia Supreme Court ruled that the amendments abrogated any common law claim based on the public policies enumerated in the VHRA.

In Doss, the court considered whether a plaintiff may bring a common law wrongful discharge action based on the public policies reflected in the VHRA. The plaintiff alleged that she was fired after informing her supervisors that she was pregnant (one day after being hired). Her supervisors apparently stated that her maternity leave would cause her to be absent during the company's busiest times. The court considered the 1995 amendments to the VHRA and, in particular, the phrase, "[c]auses of action based upon the public policies reflected in [the Act] shall be exclusively limited to those actions, procedures and remedies, if any, afforded by applicable federal or state civil rights statutes

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or local ordinances." ⁹² Finding that "exclusively limited" was of paramount importance, the court concluded that "the General Assembly plainly manifested an intent to abrogate the common law with respect to causes of action for unlawful termination of employment based upon the public policies reflected in the Act." ⁹³ Therefore, the plaintiff's common law claim of wrongful discharge was dismissed.

Roughly one year later, the court considered a similar case. In Conner v. National Pest Control Association, Inc., ⁹⁴ the plaintiff alleged that she was terminated based on her gender and that her termination therefore violated Virginia's public policy reflected not only in the VHRA but in other provisions of Virginia and federal law. National Pest Control asserted that the decision in Doss controlled, stating that the VHRA restricted wrongful discharge actions based on violations of public policy reflected in the VHRA. The plaintiff countered that the VHRA did not prohibit reliance on "other state or federal laws, or upon the public policies enunciated elsewhere." ⁹⁵ Determining that the 1995 amendments to the VHRA "eliminated a common law cause of action for wrongful termination based on any public policy which is reflected in the VHRA, regardless of whether the policy is articulated elsewhere," the court sustained the defendant's demurrer and dismissed the plaintiff's motion for judgment. ⁹⁶

5.403 Statutory Basis Requirement. In 1996, the Virginia Supreme Court addressed a critical issue in the area of wrongful discharge: whether the public policy on which a claim was based was required to arise out of a statute rather than simply a common law or commonly held belief of what the public policy should be. In Lawrence Chrysler Plymouth Corp. v. Brooks, ⁹⁷ the plaintiff was employed as a body repair shop repairman. He was terminated after refusing to repair a car using a technique that he considered to be unsafe. After his termination, Brooks brought a wrongful discharge claim against Lawrence Chrysler, asserting that his termination for refusal to engage in an allegedly unsafe automobile repair practice contravened Virginia's public policy.

At trial, a jury returned a verdict for Brooks and awarded him $90,000 (later reduced to $50,000). Lawrence Chrysler appealed, and the court concluded that Brooks' claim was deficient because it lacked specific statutory basis.

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Unlike the plaintiffs in Bowman and Lockhart, Brooks does not have a cause of action for wrongful discharge because he is unable to identify any Virginia statute establishing a public policy that Lawrence Chrysler violated. We also reject Brooks' attempt to expand the narrow exception we recognized in Bowman by relying upon so-called "common law duties of the dealership." ⁹⁸

5.404 Federal Law as Statutory Basis.

A. In General. As with many of the public policy wrongful discharge issues, no definitive guidance exists with respect to whether a federal statute will suffice as the source of the public policy on which a former employee bases his or her claim. Courts have been split on this issue.

B. Federal Statute Not Permissible. In...