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

• Published date: 01 June 1986
• Author: WILLIAM H. DAUGHTREY
• Date: 01 June 1986
• DOI: http://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.