ANOTHER EXCEPTION UNDER THE EMPLOYMENT‐AT‐WILL DOCTRINE: BOWMAN V. STATE BANK.

Published date01 June 1986
AuthorWILLIAM H. DAUGHTREY
Date01 June 1986
DOIhttp://doi.org/10.1111/j.1744-1714.1986.tb00497.x
ANOTHER EXCEPTION UNDER THE
STATE
BANK
EMPLOYMENT-AT-WILL DOCTRINE:
BOWm
V.
*WILLIAM
H.
DAUGHTREY, JR.
In the recent case of
Bowman
v.
State
Bank,‘
the Supreme Court of
Virginia held that two discharged employees stated a cause of action in
tort for retaliatory discharge. Both employees were bookkeepers whose
contracts of employment were for an indefinite duration. In doing
so,
the
court modified previous Virginia law by limiting that state’s adherence
to the traditional employment-at-will doctrine. Under that doctrine, the
employer generally has an unfettered right
to
terminate an employment
contract of indefinite duration for good cause, no cause, or even bad cause.’
*
Associate Professor of Business Law, Virginia Commonwealth University.
*
Bowman v.
State
Bank of Keysville, 229 Va.
534,
331
S.E.2d
797
(1985).
*
Over 80 years ago, Virginia adopted the general, and formerly absolute, rule that
where
no
specific time is fixed
for
the duration of
a
service contract there
is
a
rebuttable
presumption that the arrangement is terminable
at
any time by either party:
See
Stonega
Coal
&
Coke
Co.
v. Louisville
Q
Nashville
R.
R.
Co., 106Va. 223,226.56
S.E.
551,552 (1906).
This rule was recognized in Wards
Co.
v. Lewis
Q
Dobrow, Inc., 210 Va. 751,173 S.E.2d
861
(1970) (a contract
of
employment for an indefinite
period.
upon
reasonable notice, is
terminable at will by either party); Plaskitt v. Black Diamond Trailer Co.. 209 Va. 460.
164 S.E.2d 645
(1968)
(contract with salesmen
of
trailers
for indefinite period
of
time did
not warrant inference that the agreement would last for a reasonable time); Stuteman
v. C. A.
Nash
81
Son. 189 Va. 438.53 S.E.2d 45 (1949) (contract for manufacture and sale
of floor cleaner silent
as
to
duration was ended upon reasonable notice
to
terminate); Ed-
wards Co. v. Deihl, 160 Va. 587,590.169 S.E.2d
907,908
(1933)
(characterization of
an
at-
will contract
as
a
“one of hazard); Title Ins. Co. of Richmond v. Howell,
158
Va. 713.164
S.E. 387 (1932) (at-will contract resulted from corporate resolution setting compensation
“at the
rate
of
$70834
per
month.. .
,”
copy of which resolution was initialed by employee);
Conrad v. Ellison-Harvey Co., 120 Va. 458,461,91 S.E. 769,765 (1917) (implied adherence
to the at-will doctrine inasmuch
as
employee is to win or lose at new trial
on
factual issue
of whether contract was for one year’s duration).
244
1
Vol.
24
American Business Law Journal
The employment-at-will rule affects
a
large percentage of employment
contracts. At least
50
million of the
100
million Americans who are
employed work in situations governed by the common law doctrine of
employment at will? Terminations of employment for other workers are
subject to either union contract provisions
or
(in the case of civil service
employees) to statutory provisions.' Also, certain dismissals are subject
to federal statutory limitations on the employer's ability to discharge
an employee when special factors such
as
age, sex,
or
protected union
activity
so
dictate.6 Likewise,
states
limit the right to dismiss in special
circumstances.' The majority of dismissals, however, continue to be
governed by the century-old employment-at-will doctrine.'
The
first
part of this article summarizes the various theories that courts
are using to afford relief for the wrongful discharge
of
at-will employees.
The two major theories developing in the courts are:
(1)
the public policy
exception (a tort theory), and
(2)
the implied covenant of good faith and
fair dealing (which relies on basic principles
of
contract law). The second
part presents the facts and rationale of
Bowman
and notes the Virginia
Supreme Court's failure to provide an understandable theoretical basis
Virginia law has also been applied by federal courts:
See
Cales v. Chesapeake
&
Ohio
RY. CO..
300
F.
Supp. 155 (W.D. Va. 1969). In Cales, the court stated: "Although this court
has been unable to find any Virginia cases that have decided what is to
be
pleaded in a
wrongful discharge action, we think the general rules for breach of contract also obtain
in actions
for
breach
of
employment contracts. Thus, we think that
as
a minimum the plaintiff
must allege
(1)
the contract, (2) the plaintiffs performance or excuse for performance,
(3)
defendant's breach of contractual obligations, and (4) the resulting damage to plaintiff."
Id.
at 157;
See
also
Griffith
v.
Electrolux Corp. 454
F.
Supp. 29 (E.D. Va. 1978) (reasons
for termination immaterial when eontraet terminable at will under the Virginia rule).
But
see
Greenspan v. National Medical Care, Inc.. 485
F.
Supp.
29
(E.D. Va. 19800) (court found
and emphasized that employer had ample cause
to
summarily discharge
an
at-will employee.
which finding of just cause would appear to be unnecessary under the Virginia rule).
See
Tobias,
Can
You
Help Me? I've
Been
Fired,
70 A.B.A.
J.
68,6869 (Apr. 1984);
(1982).
See
also
Keeffe,
WTCOI&~
Discharge
at
Home
and
Abroad,
70
A.B.A.
J.
158
(Apr. 1984).
Federal statutes prohibit termination of an employee when the termination occurs
because
of
the employee's race.
See
42 U.S.C.
S
2000e-2(a) (1982); sex,
id.:
age,
29
U.S.C.
S
623(a) (1982); physical handicap,
id.
$794 (1982). or union activity,
id.
s
151
(1982). In addi-
tion, the Occupational Safety and Health Act
(id.
s
66O(cW1)). the Clean Air Act (42 U.S.C.
5
7622(a) (1982)). and the Employee Retirement Income Security Act
(ad.
S
1140 (1982)) pro-
hibit the dismissal of an employee merely because he reports employer activity that
violates
the statute in question (ERISA).
See, e.g.,
VA. CODE ANN.
S
51.01-46 (Cum. Supp. 1985) (protecting the physically handi-
capped);
id.
$40.1-512:1 (protecting those who fde safety or health complaints);id
5
65.1-40.1
(protecting persons who exercise their rights under the Worker's Compensation Act).
'
See
Keeffe,
Wmngful
D&charge
at
Home
and
Aboad,
70
A.B.A.
J.
158
(Apr. 1984).
BUREAU
OF
NATIONAL AFFAIRS,
INC.,
PAMPHLET
NO. 544, THE EMPLOYMENT-AT- WILL
ISSUE
'
Id.

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