Labor and Employment Law - W. Melvin Haas, Iii, William M. Clifton, Iii, W. Jonathan Martin, Ii, and Glen R. Fagan

• Publication year: 2007

Labor and Employment Lawby W. Melvin Haas, III^* William M. Clifton, III^** W. Jonathan Martin, II^*** and Glen R. Fagan^****

I. Introduction

This Article surveys recent developments in state statutory and common law that affect labor and employment relations between Georgia employers and employees. Accordingly, it surveys published decisions from the Georgia court of Appeals and the Georgia Supreme court from June 1, 2006 to May 31, 2007, as well as selected cases decided by the United States District Court, which purported to refine principles of Georgia employment law. This Article also highlights specific revisions to the Official Code of Georgia Annotated ("O.C.G.A.").¹

II. Recent Legislation

A. Substance Abuse Testing

During the survey period, the Georgia General Assembly passed important legislation affecting substance abuse testing.² Senate Bill 96³ amends the existing Georgia statute relating to drug-free workplace programs.⁴ It allows employers to conduct alternative methods of drug testing, which is required "in order to qualify for the workers' compensation insurance premium discounts."⁵ In addition to retaining the previous methods, the bill states, "Urinalysis conducted by laboratories, testing at the employer worksite with on-site testing kits, or use of oral testing that satisfies testing criteria . . . shall be deemed suitable and acceptable substance abuse testing [methods]."⁶ Additionally, for pre-job offer screening, the Bill permits qualified individuals to administer on-site tests or oral tests.⁷ By making these additions to the existing statute, the general assembly sought to provide employers with both immediate and easily accessible methods to deter and detect drug and alcohol abuse.⁸

B. Employment Security

The most significant legislation passed during the survey period amended O.C.G.A. section 34-8-35,⁹ commonly known as Georgia's Employment Security Act.¹⁰ Specifically, this legislation amends the meaning of the term "employment" within the scope of employment security.¹¹ It dictates the circumstances under which the Georgia Department of Labor is required to pay unemployment benefits.¹² Unlike other areas of employment law, the burden of proof is on the employer to prove that a worker constitutes an independent contractor and does not fall under employee status.¹³

Prior to the amendments, employers had to meet a three part test to prove that a worker was an independent contractor.¹⁴ If the employer satisfied this burden of proof, it was not required to pay unemployment taxes for that individual.¹⁵ The legislature simplified this test by eliminating the second element.¹⁶ An employer now must prove only two elements to remove a worker from employee status: (1) The worker must be free from the employer's control, and (2) the worker must traditionally practice a separately established trade from that of the employer.¹⁷ Furthermore, the legislature added an alternative basis for defining a worker's employment status.¹⁸ Under this alternative basis, after an employer considers the aforementioned required elements and concludes that a worker's status is questionable, it can submit an SS-8 determination form to the United States Internal Revenue Service for a definitive answer.¹⁹ The amended definition of "employment," under Georgia's Employment Security Act, is as follows:

(f) Services performed by an individual for wages shall be deemed to be employment subject to this chapter unless and until it is shown that:

(1) (A) Such individual has been and will continue to be free from control or direction over the performance of such services, both under the individual's contract of service and in fact; and (B) Such individual is customarily engaged in an independently established trade, occupation, profession, or business; or

(2) Such individual and the services performed for wages are the subject of an SS-8 determination by the Internal Revenue Service, which decided against employee status.²⁰

The legislature also amended O.C.G.A. section 34-8-35(n)(17) regarding employment exemptions.²¹ Specifically, the common carrier exclusion was expanded to include trips as a basis for remuneration.²² Additionally, the scope of the written contract that is required between an individual and a common carrier was revised so that the term "employment" shall not include common carriers who deliver persons.²³

(17) Services performed for a common carrier of property, persons, or property and persons by an individual consisting of the pickup, transportation, and delivery of property, persons, or property and persons; provided that:

(B) Remuneration for the individual is on the basis of commissions, trips, or deliveries accomplished;

(F) The written contract does not prohibit such individual from the pickup, transportation, or delivery of property, persons, or property and persons for more than one common carrier or any other person or entity____²⁴

C. Firearms Transportation

Senate Bill 43²⁵ ("S.B. 43"), which would permit employees to keep guns in vehicles parked on company property, did not survive the legislative affair commonly known as "Crossover Day."²⁶ Despite this setback, S.B. 43 was later incorporated into House Bill 89²⁷ ("H.B. 89"), which was to be considered by the senate. However, deliberations were delayed in light of the Virginia Tech shootings, which occurred the day before consideration of the Bill.²⁸ Subsequently, the senate chose not to add H.B. 89 to the calendar before the legislative session ended.²⁹

Proponents of H.B. 89 are wary of amending the original bill to add S.B. 43. Although some would like both bills to pass, others fear that incorporating S.B. 43 into H.B. 89 would significantly reduce the chances of H.B. 89 becoming law. Prior to its amendment, H.B. 89 was expected to pass with no problems once it was introduced on the senate floor. However, the amended H.B. 89 will likely split votes. Accordingly, the chance of the amended H.B. 89 becoming law slowly diminishes with the ghost of S.B. 43.

III. EMPLOYMENT LAW PRINCIPLES—CASE LAW

A. Wrongful Termination

1. Employment-at-Will. Georgia's employment-at-will doctrine has two notable characteristics. First, either the employee or employer may terminate the employment relationship at any time, with or without cause.³⁰ Second, and a corollary of the first characteristic, the employee may not successfully maintain a wrongful termination claim upon the termination of an employment-at-will contract.³¹

Although the employment-at-will doctrine is gradually eroding in other jurisdictions,³² O.C.G.A. section 34-7-1³³ provides that employment contracts in Georgia are at-will unless the parties implicitly or explicitly contract otherwise.³⁴ Generally, this means that in the absence of a specified length of employment, the relationship is employment-at-will.³⁵ Contract provisions specifying "'permanent employment, employment for life, or employment until retirement'" are indefinite, and therefore, they are employment-at-will contracts.³⁶

2. Terms of an At-Will Contract. In an employment-at-will contract, the employee agrees to work for the reasonable salary he or she is paid.³⁷ If, for example, the employee does not like the salary, or the employer feels that the employee is not worth the agreed upon salary, either party is free to terminate the employment relationship.³⁸ However, CPD Plastering, Inc. v. Miller³⁹ illustrates that unless a forfeiture clause exists, a terminable-at-will employee shall not be deprived "of earned commissions, even if those commissions became payable after termination."⁴⁰

In CPD Plastering, the Georgia Court of Appeals held that a former employee was entitled to certain commissions earned after termination, even though some of the contingent bids were not completed until after the employee left.⁴¹ The employee, Miller, and the employer, CPD Plastering, entered into an oral agreement in which Miller received a commission for each bid CPD Plastering received that he helped secure. Miller prepared commission sheets every two years; however, due to Y2K complications, he was unable to complete commission sheets beginning in 1998. In addition, CPD Plastering converted to a new system after 2000 that no longer required Miller to prepare the sheets. Thereafter, disputes arose that resulted in Miller voluntarily leaving CPD Plastering when the parties could not resolve the calculation of his commissions. CPD Plastering had not paid him for any commissions from 1998 to 2002. Believing that CPD Plastering owed him additional commission payments, Miller filed suit to recover the unpaid money.⁴²

The court rejected CPD Plastering's argument that Miller was not entitled to commissions that were open while he was employed, but closed after his departure.⁴³ Nowhere did the agreement obligate Miller to engage in post-bid work to receive his commission.⁴⁴ CPD Plastering even admitted that the oral agreement was "'to pay a commission for jobs bid by Gerald Miller,'" and the court emphasized that the agreement centered solely on the bid.⁴⁵ Additionally, the court reasoned that because the oral agreement did not contain a forfeiture clause, a terminable-at-will employee, such as Miller, may recover certain compensation, including commissions, for services already rendered.⁴⁶ Accordingly, the court affirmed the lower court's grant of summary judgment in favor of the employee regarding the unpaid commissions.⁴⁷

3. Quantum Meruit. In Walker Electric Co. v. Byrd,⁴⁸ the Georgia Court of Appeals affirmed that an employee's at-will status does not preclude a cause of action for recovery of the value of services already rendered.⁴⁹ The employee, Byrd, filed suit for breach of contract, claiming that Walker Electric breached its oral agreement regarding his compensation. The parties agreed that Byrd would be paid $40 as per diem compensation, in addition to his hourly wages.⁵⁰ The employer's argument that "'an at-will employee may...