Public-Policy Exception to At-Will Rule Recognized

By Scott M. Wich Jan 4, 2017

Employee terminations are subject to a litany of legal restrictions. Seasoned human resource professionals regularly review checklists of such restrictions in the course of a discharge decision. An opinion from a federal court in Vermont highlighted that complying with the letter of the law, however, can be insufficient to ward off legal troubles when a court recognizes a public-policy exception to the at-will rule.

Effie Mayhew was a groundskeeper for the Hermitage Club. In the course of her duties, she took an interest in the club's horses. She raised some concerns about their health and grooming to the club, which expanded Mayhew's duties to include the care of two of the club's horses. Mayhew thereafter developed commercial use plans for the horses, including carriage and sleigh rides for guests of the club. The club announced plans for a possible equestrian center, and its vice president and operations manager, Michael Quinn, proposed to Mayhew a revenue-sharing incentive agreement with her for the commercial use of the horses. Quinn also asked Mayhew to "commit to being the representative" of the center.

In the course of Mayhew's new duties, she expressed frustration about modifications made to the horses' pasture by the club's building and grounds manager, Benjamin Fritz. Mayhew complained that the changes exposed the horses to poisonous plants. She sent an e-mail to the club's owner alleging that Fritz was "forcing [her]" to place the horses in peril.

The next day, Fritz terminated Mayhew for "threatening conduct."

[SHRM members-only toolkit: Involuntary Termination of Employment in the United States]

Mayhew filed a lawsuit against the club asserting, among other things, that her discharge was prohibited under a theory of promissory estoppel. She also alleged that her discharge was contrary to public policy. The club moved for summary judgment.

With regard to the promissory estoppel claim, Mayhew argued that the club had promised her shared revenues with respect to the equestrian center. She also argued that the club's business ethics policies amounted to "an inherent promise not to discipline employees who acted in accordance with its provisions."

The court dismissed this claim. In so doing, it noted that Mayhew was an at-will employee. The promises allegedly made by the club did not amount to "specific modifications" to the at-will relationship. Stated otherwise, Mayhew was unable to show that the club had promised to limit its ability to terminate.

On the viability of claims arising from public policy, the court reflected that "Public policy may be said to be the community common sense and common conscience, extended and applied throughout the state to matters of public morals, public health, public welfare, and the like. … Even where the letter of the law would not have prevented an employer's actions, the court may use this common law remedy to advance the interests and values underlying statutory provisions." Vermont, the court found, maintained legal prohibitions against animal cruelty that could encompass, for example and consistent with the complaints raised by Mayhew, failure to address health ailments or maintenance of grazing conditions that could pose the risk of death.

The court acknowledged that the club's description of Mayhew's complaints as being overly aggressive and disparaging of her supervisors could lead to a conclusion that she was being insubordinate and lawfully subject her to termination. Notwithstanding, the court concluded that a jury should decide whether Mayhew was unlawfully terminated, at least in part, due to the voicing of her concerns over the basic welfare of the horses.

Mayhew v. Hermitage Club LLC, D. Vt., No. 2:15-cv-00147 (Nov. 30, 2016).

Professional Pointer: Legal risks in employment decisions are not always readily apparent. Care should be taken before reaching a conclusion that decisions compliant with well-publicized legal restrictions do not run afoul of lesser known, but equally significant, obligations.

Scott M. Wich is an attorney with the law firm of Clifton Budd & DeMaria, LLP in New York City.

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