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

• Publication year: 2004

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

I. Introduction

This Article surveys recent developments in state statutory and common law that affect labor and employment relations of Georgia employers. Accordingly, it surveys published decisions from the Georgia Court of Appeals and Georgia Supreme Court from June 1, 2003 to May 31, 2004. This Article also highlights specific revisions to the Official Code of Georgia Annotated ("O.C.G.A.").

II. Recent Legislation

Without regard to the Georgia General Assembly's changes to the "Workers' Compensation" section¹ of the Georgia Labor and Industrial Relations Code ("Labor Code"),² the General Assembly passed two noteworthy amendments to Georgia's Labor Code during the survey period.

First, the General Assembly addressed the so-called "Living Wage"³ movement by creating O.C.G.A. section 34-4-3.1⁴ to preempt "[a]ny and all wage or employment benefit mandates adopted by any local government."⁵ The General Assembly did so based, in part, upon the following determination: "In order for businesses to remain competitive and yet attract and retain the highest possible caliber of employees, private enterprises in this state must be allowed to function in a uniform environment with respect to mandated wage rates and employment benefits."⁶ In so doing, the General Assembly eliminated what it perceived as being wage and benefit disparities "creat[ing] an anticompetitive marketplace [and] foster[ing] job and business relocation."⁷

Second, the General Assembly amended O.C.G.A. section 34-8-21⁸ to repeal the "State Unemployment Tax Moratorium."⁹ Although lifting the Unemployment Moratorium may have been necessary to meet unemployment needs during an economic downturn, the increased tax liability placed further burdens on businesses already affected by the recession. ¹⁰

III. Wrongful Discharge

A. Employment at Will

An employment-at-will contract has at least two notable characteristics: first, either the employee or employer may terminate the employment relationship at any time, with or without cause; second, and a corollary of the first characteristic, upon the termination of an employ-ment-at-will contract, the employee may not successfully maintain a wrongful termination claim.¹¹

While the doctrine is gradually eroding in other jurisdictions,¹² O.C.G.A. section 34-7-1¹³ provides that employment contracts in Georgia are at-will unless the parties implicitly or explicitly contract otherwise.¹⁴ Generally, this means that in the absence of a specified length of employment, the relationship is employment-at-will.¹⁵ Contract provisions specifying "'permanent employment,' 'employment for life,' or 'employment until retirement'" are indefinite, and therefore, are employment-at-will contracts.¹⁶

In Georgia Farm Bureau Mutual Insurance Co. v. Crowley,¹⁷ the court of appeals reaffirmed the general principle of employment-at-will: "The public policy of Georgia is clear and unambiguous that, absent a definite term of employment, the contract is terminable at will."¹⁸

In that case Crowley, an attorney, had represented Georgia Farm Bureau "on a case-by-case basis" for more than seventeen years.¹⁹ After a verbal confrontation with a Georgia Farm Bureau employee, Crowley was asked to apologize, which he refused to do. When Georgia Farm Bureau directed Crowley to return forty-two active case files, Crowley sued alleging, inter alia, breach of contract. Crowley argued that Georgia Farm Bureau had agreed that once it turned a file over to him it would not be removed unless he "'didn't do the job[,]'" or was disbarred.²⁰ Although the court of appeals stated numerous reasons for affirming the trial court's grant of summary judgment to defendant on Crowley's breach of contract claim, it did so in part because "there was no stated duration of the agreement . . . [and] absent a definite term of employment, the contract [was] terminable at will."²¹

Similarly, in Cramp v. Georgia-Pacific Corp.²² the court of appeals relied upon the doctrine of employment-at-will to limit an employee's ability to bring a fraud claim against his former employer.²³ The decision in Cramp arose from the acquisition of Unisource Worldwide, Inc. ("Unisource") by Georgia-Pacific Corp. ("Georgia Pacific"). Before the acquisition, Unisource offered additional severance benefits to some of its employees, including Cramp, its vice president of customer service.²⁴ Unisource promised Cramp that if his employment "was terminated other than for cause, or should he resign following a change of control,. . . [he] would be entitled to [twelve] months continued salary, with the first six months guaranteed and the remaining six months subject to offset by subsequent employment."²⁵

After the acquisition, Georgia-Pacific's vice president of marketing offered Cramp a job and allegedly told Cramp, "'we want you to come down to Atlanta and continue the job you're doing.'"²⁶ The job offer was contingent upon Cramp's release of the severance benefits previously offered by Unisource.²⁷ In part, the written offer stated:

As you are no doubt aware, employment at Georgia-Pacific, as with most employers, is "at will" and thus can be terminated at any time and for any reason not prohibited by law, either at the option of the employee or the option of the company. Similarly, as a matter of policy, Georgia-Pacific reserves the right to make changes in the terms and conditions of employment of all of its regular salaried employ-ees.²⁸

After Cramp accepted the offer and moved to Atlanta, he discovered that his duties with Georgia-Pacific differed from the duties he had performed with Unisource. Eventually, Georgia-Pacific moved Cramp's duties to other executives and eliminated his position, resulting in his termination. Cramp sued alleging fraud.²⁹

Although Cramp admitted that the nature of his at-will employment precluded him from "maintain[ing] a cause of action for an alleged misrepresentation concerning the length of his employment, or promise related to future compensation,"³⁰ he argued that Georgia-Pacific fraudulently induced him into relinquishing his additional severance benefits by misrepresenting the nature of his position with them.³¹ The court of appeals rejected Cramp's argument, holding that an employee cannot justifiably rely upon an employer's representation regarding the particular responsibilities of a position because, in the context of at-will employment, "such a representation was an unenforceable promise."³² Thus, a representation regarding the responsibilities of a position cannot form the basis of a fraud claim.³³

Likewise, in Shores v. Modern Transportation Services, Inc.,³⁴ the court of appeals limited an employee's recovery in tort under the theory that no property right existed when the employment was at-will.³⁵ In that case Thomas Shores was operating the lead locomotive of a train when a truck driver, employed by Modern Transportation, collided with the locomotive and the freight car behind Shores. Shores was not physically injured, but he complained of post-traumatic stress syndrome, which prevented him from working as an engineer.³⁶ The court dismissed Shores's tort action for negligent infliction of emotional distress because he failed to show the elements of either physical injury or monetary loss.³⁷ The court held that Shores's injury resulted in no pecuniary loss because Shores had no "reasonable expectation of continued employment to establish a property right protected by law."³⁸ Finally, the court, in Wilson v. City of Sardis,³⁹ reaffirmed the application of the doctrine of employment-at-will for public and private employees when there is no statutory or contractual bar to termina-tion.⁴⁰ Wilson, the chief of police for the City of Sardis, misrepresented the employment status of a police academy student. After the misrepresentation was discovered, the City of Sardis, led by the mayor and several city counsel members, terminated Wilson for falsifying the application. Wilson filed suit against the mayor and various city counsel members for tortious interference with his contract and against the city itself for "wrongful termination."⁴¹ Regarding the wrongful termination claims, the court of appeals held:

[A] public employee has a property interest in employment when that employee can be fired only for cause .... In the absence of a contractual or statutory "for cause" requirement, however, the employee serves "at will" and may be discharged at any time for any reason or no reason, with no cause of action for wrongful termination under state law. Such "at will" employees have no legitimate claim of entitlement

to continued employment and, thus, have no property interest protected by the due process clause.⁴²

B. Breach of Employment Contracts

The following cases demonstrate the problems and unnecessary legal costs associated with poor draftsmanship in employment agreements. Consequently, a practitioner should always include unambiguous and definite terms when defining the employer-employee relationship in an employment contract.

To form a valid employment contract, the basic rules of contracts apply: offer, acceptance, and consideration. Further, an employment contract must contain a designation of the employee's place of employment, the period ofemployment,⁴³ the nature of services to be rendered, and the amount or type of compensation. The terms of an employment contract must be sufficiently definite to be enforceable, and definitive-ness is a question of law for the judge.⁴⁴

When interpreting employment contracts, courts are guided by three general principles. If the contract is not ambiguous, the court will enforce the contract according to its terms and dismiss all technical or arbitrary rules ofconstruction.⁴⁵ However, if the contract is ambiguous, then interpreting the terms is a question of law for the court. If the court cannot...