Labor and Employment Law
| Publication year | 2012 |
Labor and Employment Law
W. Melvin Haas III
William M. Clifton III
W. Jonathan Martin II
Alyssa Peters
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This Article surveys revisions to the Official Code of Georgia Annotated (O.C.G.A.)1 and decisions interpreting Georgia law from June 1, 2011 to May 31, 2012.2
Beginning January 1, 2012, private employers with more than 500 employees were required to begin using the federal work authorization program,3 also known as "E-Verify."4 Effective July 1, 2012, private employers with more than 100 employees were required to use E-Verify.5 These new requirements have been gradually phased in pursuant to House Bill 87,6 also known as The Illegal Immigration Reform and Enforcement Act of 2011, which was signed by Governor Nathan Deal on May 13, 2011.7 The last remaining E-Verify provision, requiring compliance by employers with more than ten employees, takes effect on July 1, 2013.8
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Although not enacted in the 2012 Georgia legislative session, the following public law represents a potential trend for employer-employee legislation in coming years. Georgia House Bill 697,9 which is still in committee, would amend Article 7 of Chapter 8 of Title 34 of the O.C.G.A. if it is ultimately enacted.10 This legislation would institute a random drug testing program as a required condition for continuing to receive unemployment compensation benefits.11 Recipients of unemployment compensation would lose their benefits for up to two years for either a failure to comply with the testing or for testing positive for a prohibited substance.12
A. Employment At-Will
At-will employment refers to employment that either an employer or an employee may terminate at any time with or without cause.13 While employment at-will in other jurisdictions may be weakening,14 in Georgia the presumption remains that all employment is at-will unless a statutory or contractual exception exists.15 "[T]his bar to wrongful discharge claims in the at-will employment context 'is a fundamental statutory rule governing employer-employee relations in Georgia.'"16 Particularly, O.C.G.A. § 34-7-117 provides that "[a]n indefinite hiring" is at-will employment.18 The definition of an indefinite hiring includes
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contract provisions specifying "'permanent employment,' 'employment for life,' [and] 'employment until retirement.'"19 Further, a contract spetifying an annual salary does not create a definite period of employment.20 However, if an employment contract does specify a definite period of employment, any employment beyond that period becomes employment at-will subject to discharge without cause.21
Regardless of an employer's motives, the general rule in Georgia allows the discharge of an at-will employee without creating a cause of action for wrongful termination.22 Oral promises between an employer and employee will not modify the relationship between the two; absent a written contract, an employee's status remains at-will.23
B. Wrongful Termination Based upon Allegations of Fraud
In Bailey v. Urology Center of Columbus, LLC,24 the United States District Court for the Middle District of Georgia determined that an employer's alleged assurance of an employee's job security did not amount to fraudulent misrepresentation when the employee was later terminated.25 Bailey alleged that a manager for her employer represented that Bailey's "job was safe" in December 2009.26 Following the alleged assurance, Bailey purchased a house. In March 2010, Bailey was terminated. She then claimed that her employer already had decided to terminate her at the time of the representation. Bailey brought suit against her former employer, claiming fraudulent misrepresentation.27
Bailey's claim was dismissed with prejudice for failure to state a claim upon which relief can be granted.28 The court noted that "[a]n indefinite hiring may be terminated at will by either party."29 Bailey failed to allege that she had an employment contract with her employer for a
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specified time period.30 Consequently, Bailey could not rely on her employer's alleged representation because as an at-will employee the representation was unenforceable.31
C. Breach of Contract (Other than At-will Contracts)
The basic rules of contract law apply in creating a valid employment contract: competency to contract, offer, acceptance, and valid consideration.32 Further, for an employment contract to be valid, the terms must define the nature and character of the services to be performed, the place of employment, the time period for which the employee is to work, and the compensation to be owed to the employee.33 In addition, an employment contract's enforceabihty requires sufficient definitiveness in the terms of the contract.34
During the survey period, the Georgia Court of Appeals affirmed that basic contract rules, including the statute of frauds, apply to the formation of an employment contract. In Bithoney v. Fulton-DeKalb Hospital Authority,35 the court examined whether an oral agreement for a fifteen-month severance package was enforceable under the statute of frauds.36 Bithoney engaged in multiple discussions about moving from New York to Georgia to take an executive position with Grady Hospital. Additionally, on multiple occasions, Bithoney met with members of the Board of Trustees of the Fulton-DeKalb Hospital Authority, the governing authority for Grady Hospital. At one of the meetings, the chair of the board told Bithoney, "Welcome to the Grady family, we are looking forward to your joining us."37 Bithoney received a draft employment contract from Grady that provided for a fifteen-month severance pay package if he was terminated. Moreover, Grady provided Bithoney with an offer letter to confirm the initial employment status and to serve as a framework for a subsequent formal contract. However, the fifteen-month severance term was missing from the offer letter. Bithoney moved to Georgia without having a formal employment agreement in place. The night before he was to begin work, he was informed that the board of trustees blocked his employment and he
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would not be working for Grady. Bithoney filed suit alleging breach of contract pursuant to an oral contract for the fifteen-month severance package and negligent misrepresentation pursuant to the chair of the board's welcoming statement.38
The court upheld the trial court's ruling that "enforcement of the oral severance agreement was barred by the Statute of Frauds."39 Agreements that cannot be performed within one year of their making must be in writing and signed by the charged party.40 The court noted that "[t]o fall within the ambit of this statutory provision, a contract must be incapable of being performed within a year."41 Bithoney's oral severance agreement was for fifteen months, and the statute of frauds was applicable.42 The court affirmed summary judgment in favor of the employer.43
D. The Georgia Whistleblower Act
Under the Georgia Whistleblower Act,44 "[n]o public employer shall retaliate against a public employee for disclosing a violation of or noncompliance with a law, rule, or regulation to either a supervisor or a government agency . . . ."45 In Caldon v. Board of Regents of the University System of Georgia,46 the Georgia Court of Appeals examined whether a close temporal proximity between a public employee's complaints and her termination was sufficient to create a genuine issue of material fact regarding whether the employer's motive was pretex-tual.47 Caldon claimed that she engaged in whistleblowing activity in July and August of 2008 by discussing concerns that her boss was underreporting leave time, reporting a conflict of interest, complaining of wasteful spending practices, and voicing concerns over her boss's ability to handle his job responsibilities. On September 24, 2008, Caldon verbally berated her boss in front of other employees. That same day, Caldon was given the option to resign or be terminated. Caldon initially resigned, but later withdrew her resignation and filed for a review.48
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The court affirmed summary judgment for the employer.49 The employer provided direct evidence that Caldon was fired for insubordination based on her September 24 exchange with her boss.50 Other employees heard the exchange and another executive recommended that Caldon be terminated for insubordination without knowledge of the alleged whistleblowing activities.51 In some cases, "temporal proximity could be sufficient to establish a question of fact with regard to the stated reason for termination, in this case, however, it is not sufficient to overcome the Board's direct evidence that Caldon was terminated for her insubordination."52
Under O.C.G.A. § 34-7-20,53 "[t]he employer is bound to exercise ordinary care in the selection of employees and not to retain them after knowledge of incompetency . . . ."54 The Georgia Court of Appeals has held that this statute imposes a duty on the employer to "warn other employees of dangers incident to employment that 'the employer knows or ought to know but which are unknown to the employee.'"55 For a plaintiff to sustain an action for negligent hiring or retention, the plaintiff must show that the employer hired an individual who "the employer knew or should have known posed a risk of harm to others where it [was] reasonably foreseeable from the employee's tendencies' or propensities that the employee could cause the type of harm sustained by the plaintiff."56 Typically, "the determination of whether an employer used ordinary care in hiring an employee is a jury issue"57 and is only a question of...
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