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

• Publication year: 2003

Labor and Employmentby W. Melvin Haas, III^*

William M. Clifton, III^** and

W. Jonathan Martin, II^***

I. Introduction

This Article surveys recent developments in the state statutory and common law that affect labor and employment relations of Georgia employers. Accordingly, it surveys published decisions from the Georgia Supreme Court and Georgia Court of Appeals from June 1, 2002 to May 31, 2003. This Article also includes highlights of certain revisions to the Official Code of Georgia Annotated ("O.C.G.A.").¹

II. Recent Legislation

A. Employment Security

Although Georgia's Employment Security Law² is a product of 1930's "New Deal" social legislation,³ its "declaration of state public policy" has remained unaltered despite numerous revisions:⁴ "[T]he public good and general welfare of the citizens of this state require[d]. . . the compulsory setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own."⁵

Without regard to the general assembly's changes to the "Workers' Compensation" section⁶ of the Georgia Labor and Industrial Relations Code ("the Code"),⁷ the general assembly enacted several amendments to Georgia's Employment Security Law that became effective during the survey period.⁸ The most notable amendment expands the disqualifica- tion criteria for individuals employed by "professional employer organizations."⁹ Specifically, the legislature amended the Code so that individuals employed by professional employer organizations will be presumed to have voluntarily left employment without good cause if they do not contact the professional employer organizations for reassignment upon the completion of an assignment.¹⁰ With this change, employees of professional employer organizations will now be disqualified on the same basis as individuals employed by a "temporary help contracting firm."¹¹

III. Wrongful Discharge

A. Employment at Will

1. Overview. An employment-at-will contract has two notable characteristics. First, either the employee or employer may terminate the employment relationship at any time, with or without cause.¹² Second, and a corollary of the first characteristic, upon the termination of an employment-at-will contract, the employee may not successfully maintain a wrongful termination claim.¹³

While the employment-at-will doctrine is gradually eroding in other jurisdictions,¹⁴ O.C.G.A. section 34-7-1 provides that employment contracts in Georgia are at will, unless the parties implicitly or explicitly contract otherwise.¹⁵ Generally, this section means that in the absence of a specified length of employment, the relationship is employment at will.¹⁶ Contract provisions specifying permanent employment, employment for life, or employment until retirement are indefinite, and therefore, they are employment-at-will contracts.¹⁷

During the survey period, the court of appeals opinion in Hanne v. Mississippi Management, Inc.¹⁸ demonstrated just how strictly the courts construe the employment-at-will doctrine by holding that a contract purporting to abrogate the doctrine must specify the term of the employment relationship—mere inferences will not suffice.¹⁹ In Hanne after an employee was terminated from his employment of five months, he sued for wrongful termination, alleging that a letter agreement between the parties created a two-year employment contract. Specifically, the employee based his contentions on two provisions of the letter agreement.²⁰ One provision stated that "[a]fter employment here for two years, on April 20, 2000, you will receive a $4,000 bonus . . . [but,] [i]f you leave for any reason before that time, whether it is your choice or not, you will not be eligible to receive this bonus."²¹ The second provision stated that if the employee did not remain employed for two years, he would be required to reimburse the employer for the moving expenses paid to him upon his hiring.²²

The court of appeals held that this language was not sufficient to establish a definite term of employment.²³ The court reasoned that despite the references to a period of two years in the provisions, the provisions did not establish a two-year term of employment because they merely referred to the eligibility of bonuses and the responsibility of the employee to pay back his moving costs if he did not remain with the company for two years.²⁴ Despite the inferences otherwise, neither provision contained a definite term of employment.²⁵ The court reiterated that "'[a]n employment contract containing no definite term of employment is terminable at the will of either party, and will not support a cause of action against the employer for wrongful termina-tion.'"²⁶ Mere inferences to the contrary will not abrogate this doc-trine.²⁷ Accordingly, the court rejected the employee's argument and upheld the trial court's grant of summary judgment on the breach of employment contract claim.²⁸

2. Terms of an At-Will Contract. In an employment-at-will contract, the employee agrees to work for the reasonable salary he is paid. If, for example, the employee does not like the salary, or the employer feels that the employee is not worth his agreed upon salary, either party is free to terminate the employment relationship.²⁹ However, Rodriguez v. Vision Correction Group, Inc.³⁰ illustrates that, in addition to refusing to provide relief to terminated employees, the courts will not provide relief to at-will employees whose compensation terms are altered after the commencement of employment.³¹

In Rodriguez the court held that an alleged oral promise to a chief financial officer to pay an employee a specified amount was a term of an employment-at-will contract that could not be enforced.³² The employee, Rodriguez, was promised by the employer certain stock options, along with her regular salary. The details of this stock option plan were purely speculative, and this promise was never integrated into a writing. Rodriguez was terminated before the stock option plan was exercised, and the employer refused to honor the promise. Agreeing that there was no valid contract, Rodriguez sued under unjust enrichment, claiming that the stock options (along with her salary) represented her market value and that the employer's attempt to keep this payment constituted unjust enrichment.³³

The court rejected this argument, holding that a plaintiff may not circumvent the employment-at-will doctrine under unjust enrichment.³⁴ The court stated that to recover under unjust enrichment, plaintiff had the burden to demonstrate that "she was not already reasonably compensated for her services."³⁵ Further, the court noted the lack of any "cases where an employee was allowed to recover damages in quantum meruit or unjust enrichment after she was already paid the salary she negotiated."³⁶ Here, the court reasoned that Rodriguez had admitted that her salary was reasonable.³⁷ Further, the court reasoned that she conceded that her salary was reasonable by continuing to work for the employer for more than four years.³⁸ Accordingly, the court affirmed the lower court's summary judgment in favor of the employ-er.³⁹

3. Exceptions to Employment at Will. The statute creating the employment-at-will doctrine also states the most significant exception to the doctrine—unless the parties implicitly or explicitly contract otherwise.⁴⁰ Additionally, the Code contains other exceptions to the doctrine. For example, an employer cannot discharge an employee simply because his earnings are subject to one garnishment,⁴¹ and employers cannot discharge employees who are absent from work due to compulsory attendance at a judicial proceeding.⁴²

However, as Balmer v. Elan Corp.⁴³ illustrates, the court of appeals refused to allow judicially created public policy exceptions to the doctrine.⁴⁴ In Balmer the employer allegedly promised plaintiff and other employees that they would not be discharged for cooperating with the Food and Drug Administration's inspection of the employer's facilities. After the inspection, the employer disagreed with the employees' handling of the inspection and fired them. The employees then sued for wrongful termination. At trial the court dismissed the wrongful termination claims, and the employees appealed, arguing that the promise not to fire abrogated the doctrine of employment at will.⁴⁵ Specifically, the employees argued that the court should view "freedom of contract" as a policy exception to the doctrine.⁴⁶

The court of appeals rejected the employees' argument, stating that "[a]lthough there can be public policy exceptions to the doctrine, judicially created exceptions are not favored, and Georgia courts thus generally defer to the legislature to create them."⁴⁷ Reasoning that the legislature had not created any "freedom to contract" public policy exception—for example, when an employer promises not to fire an employee—the court held that an action for wrongful discharge would not lie on such basis.⁴⁸ Accordingly, the court upheld the trial court's dismissal of the wrongful discharge claim.⁴⁹

4. Sovereign Immunity. The Georgia Constitution waives sovereign immunity with respect to breach of contract actions against the state government.⁵⁰ However, in Moon v. Terrell County,⁵¹ the court held that this waiver does not apply in a case in which an employee sues the government under an employment-at-will contract.⁵² In Moon a discharged employee sued Terrell County for back pay. The trial court dismissed the claim and Moon appealed.⁵³

The court of appeals held that "as an at-will employee, Moon could not assert a claim for back pay under Georgia law."⁵⁴ The court noted that the Georgia Constitution waives sovereign immunity for "'any action ex contractu for the breach of any written contract.'"⁵⁵ However, the court previously held that this provision did not include employees-at-will without a written contract.⁵⁶ Accordingly, the employee could not maintain an action for back pay...