Employer Tort Liability To Employees

• Jurisdiction: Maryland

II. EMPLOYER TORT LIABILITY TO EMPLOYEES

The Maryland Workers' Compensation Act, Md. Code Ann., Labor and Employment §§ 9-101 to 9-1201 (2016 & Supp. 2020) (hereinafter Lab. & Empl. § ___ ), provides that an employer's liability to an employee for occupational diseases or accidental injuries "arising out of and in the course of employment" is limited exclusively to the benefits provided by that Act.¹ The Act provides benefits for emotional as well as physical injuries.²

In short, the Act immunizes employers from most common law negligence claims by its employees in exchange for the employers providing no-fault workers' compensation benefits.³

If the employer fails to secure coverage under the Act, or the employer intentionally injures or kills an employee, then the employee (or his estate) may elect either to claim benefits under the Act or sue the employer for damages.⁴

Notwithstanding the exclusivity provision of the Act, however, employers can be liable in tort to their employees, former employees, or applicants for employment under a variety of theories, discussed below.

A. Misrepresentation in Hiring

When an employer promises employment to an applicant, inducing the applicant to leave a lucrative position, turn down other offers, or otherwise significantly change his or her position, and then fails to follow through with the promised employment, the employer can be held liable on a claim of negligent misrepresentation.⁵

In Griesi v. Atlantic General Hospital Corp., 360 Md. 1, 756 A.2d 548 (2000), the applicant, a physical therapist, applied for a position with a Maryland hospital and was interviewed by the hospital's CEO. The CEO later made a written offer of employment on hospital stationery, which the applicant accepted in writing. In reliance on the offer, the applicant rejected another offer and he took steps to move near the hospital. In fact, there was no available physical therapy position and the hospital later withdrew the offer.

The Court of Appeals held that the applicant stated a good claim for negligent misrepresentation, reasoning that "precontractual employment negotiations manifestly require the employer to impart, and the prospective employee to digest, relevant and accurate information concerning the place of employment and the position to be occupied by the employee."⁶ The court rejected the hospital's defense that the applicant was to be only an at-will employee who could be fired at any time. The court said that the applicant's prospective at-will status "likely will have a substantial bearing on the amount of any damages, but it has no effect whatsoever on whether he has plead a cognizable claim."⁷

In Newton v. Kenific Group, 62 F. Supp. 3d 439 (D. Md. 2014), the plaintiff accepted the defendant employer's written job offer and quit his former job, only to be told that his employment was conditioned on government approval of his résumé. When the government rejected his résumé, the offer was withdrawn. Relying on Griesi, supra, the district court denied the employer's motion to dismiss plaintiff's claims of negligent misrepresentation and promissory estoppel.

B. Wrongful or Abusive Discharge

1. Judicial exception to at-will employment

Maryland follows the common law rule that "an employment contract of indeinite duration, that is, at-will, can be legally terminated at the pleasure of either party at any time."⁸ Of course, if the parties to the relationship have entered into an employment contract that provides for a definite term of employment or otherwise restricts the unfettered right to terminate, an unauthorized termination will be a breach of contract giving rise to a damage claim.

In Adler v. American Standard Corp., 291 Md. 31, 432 A.2d 464 (1981), the Court of Appeals, answering a certified question from the U.S. District Court for the District of Maryland, recognized for the first time in Maryland the tort of abusive discharge as a judicial exception to the at-will doctrine. (There are numerous statutory exceptions to the at-will doctrine, such as whistleblower laws and non-discrimination and non-tetaliation laws, that are beyond the scope of this chapter.)

In order to invoke the abusive discharge exception, the termination must contravene some clear mandate of public policy. The purpose of the abusive discharge exception is "to provide a remedy for an otherwise unremedied violation of public policy."⁹ The discharged employee in Adler alleged that he was fired for complaining about a variety of wrongful conduct by officials of his corporate employer, including tax and accounting fraud, bribery, and misuse of corporate funds. Assuming those allegations to be true, the court ruled that the employee's complaint did not state a good cause of action for abusive discharge because no clear mandate of public policy was violated.

After receiving the Court of Appeals' answer to the certified question, the employee in Adler amended his district court complaint to allege that the termination was to prevent his disclosing a kickback scheme to upper management. He won on that claim at trial, but the Fourth Circuit reversed, ruling that the amended complaint still failed to state a violation of some clear mandate of public policy.¹⁰

2. What is a clear mandate of public policy?

Later cases help answer the question of what constitutes a clear mandate of public policy.

• Ewing v. Koppers Co., 312 Md. 45, 537 A.2d 1173 (1988)—Discharging an employee solely because that employee filed a workers' compensation claim contravenes a clear mandate of Maryland public policy.

• Makovi v. Sherwin-Williams Co., 316 Md. 603, 561 A.2d 179 (1989)—"Abusive discharge is inherently limited to remedying only those discharges in violation of a clear mandate of public policy which otherwise would not be vindicated by a civil remedy."¹¹ A female employee therefore could not pursue a pregnancy discrimination claim based on alleged violations of federal and state anti-discrimination laws, which carry their own remedies.

• Kessler v. Equity Management, Inc., 82 Md. App. 577, 572 A.2d 1144 (1990)—Discharging the resident manager of an apartment complex because she refused to make surreptitious entries into tenants' apartments and snoop into their private papers (and thereby commit the tort of invasion of privacy) was actionable.

• Watson v. Peoples Security Life Insurance Co., 322 Md. 467, 588 A.2d 760 (1991)—The employee was fired allegedly because she had sued her employer on common law claims relating to sexual harassment. After being fired, she amended to add a wrongful termination count. The court rejected the amendment saying, "[T]here ordinarily is no violation of public policy by an employer's discharging an at-will employee in retaliation for that employee's suing the employer."

• Bleich v. Florence Crittendon Services of Baltimore, 98 Md. App. 123, 632 A.2d 463 (1993)—Plaintiff teacher, who by law was required to report child abuse or neglect, alleged that her letter to state licensing specialist constituted report of child abuse or neglect, and that she was fired for sending that letter. The court found her allegations were sufficient to state a cause of action for wrongful termination. Her claim for violation of her First Amendment rights, however, failed because her employer was a private entity.

• Molesworth v. Brandon, 341 Md. 621, 672 A.2d 608 (1996)—The Maryland Fair Employment Practices Act's declared policy against sex discrimination will support a suit for wrongful discharge based on sex. Note, however, that in Molesworth the employer had fewer than 15 employees, so was not subject to the Act's administrative remedies.

• Wholey v. Sears Roebuck & Co., 370 Md. 38, 803 A.2d 482 (2002)—Terminating at will employment on the grounds that the employee, as a victim or witness, gave testimony at an official proceeding or reported a suspected crime to the appropriate law enforcement or judicial officer is wrongful and contrary to public policy. But terminating for reporting suspected wrongdoing in the workplace to the employee's superior is not against public policy.

• Porterfield v. Mascari II, Inc., 374 Md. 402, 823 A.2d 590 (2003)—The employee claimed she was wrongfully discharged for stating that she would consult with an attorney before signing a written warning of inadequate job performance. The court concluded that Maryland law does not recognize the general right to consult with an attorney as a clear mandate of public policy sufficient to underlie a wrongful discharge action.

• King v. Marriott International, Inc., 160 Md. App. 689, 706 (Md. App. 2005)—The court found no wrongful termination for an employee who was fired for alerting general counsel and supervisors of an employee benefit fund transfer to the corporation's general assets, allegedly illegal under ERISA.

• Parks v. Alpharma, Inc., 421 Md. 59, 25 A.3d 200 (2011)—The former employee of a pharmaceutical company failed to identify any clear mandate of public policy in alleging that she was terminated in retaliation for complaining about illegal marketing activities.

• Goode v. American Veterans, Inc., 874 F. Supp. 2d 430 (D. Md. 2012)—The employee, who worked for a tax-exempt non-profit organization, reported to her supervisor her suspicion that a fellow employee was improperly using a corporate credit card and had attempted to manipulate corporate award accounts for the fellow employee's personal benefit. The district court dismissed the employee's wrongful termination suit, holding that neither the reporting obligations in the organization's handbook nor the private inurement prohibitions in the Internal Revenue Code provided a suficient public policy basis on which to base the claim.

• Miller-Phoenix v. Baltimore City Board of School Commissioners, 2020 WL 2781833 (Md. App. No. 209, Sept. Term, 2019, decided May 29, 2020)—A claim for wrongful termination may lie when an employer's motivation for deciding not to renew a renewable

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