Employment At Will In Ohio FD 32 AP 789352fd F5aa 4388 B161 8f14e2f3fa94
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EMPLOYMENT AT WILL IN OHIO: WORKING FROM
WITHIN
The employment at-will doctrine has undergone significant modification
in recent years. The debate rages on as to whether the rule should remain intact', be modified 2, or be abrogated altogether.' Those states which have
modified the rule have differed as to the scope of protection accorded the
discharged employee. This comment seeks to measure the parameters of Ohio's
exceptions to the at-will rule in relation to other states' views on this issue.
Also included is an examination of the interplay between the legislature and
the judiciary in affecting change in Ohio. A proposal designed to "solidify" the
public policy exception to the at-will rule after Phung v. Waste Management,
Inc. 4,a recent Ohio Supreme Court case, will also be presented.
TRACING THE HISTORY OF THE RULE
At common law, the English courts indulged in the presumption that a
general or indefinite hiring was for one year unless the parties intended otherwise.' However, during the latter part of the 19th century, American courts
departed from this presumption in favor of "Wood's Rule," named for its
author Horace G. Wood.6 The rule proposed a contrary presumption that "a
general or indefinite hiring is prima facie a hiring at will and, if the servant
'See generally Epstein & Paul, In Defense of Employment at Will. 51 U. CHI. L. REV. 947 (1984).
'See generally Blades, Employment at Will v.IndividualFreedom: On Limiting the Abusive Exercise of Em.
ployer Power. 67 COLUM. L. REV. 1404 (1967); Comment, Protecting the Private Sector Employee who
"'Blowsthe Whistle'" A Cause of Action Based Upon the Determinants of Public Policy, 1977 Wis. L. REV.
777 (1977) (hereinafter referred to as The Private Sector At Will Employee); Note, Guidelines For A Public
Policy Exception To The Employment At Will Rule. The Wrongful Discharge Tort, 13 CONN. L. REV. 617
(1981) (hereinafter referred to as Note, Guidelines For a Public Policy Exception); Comment, Wrongful Discharge of Employees Terminable at Will - A New Theory of Liability in Arkansas, 34 ARK. L. REV. 729
(1981); Note, A Common Law Action for the Abusively Discharged Employee, 26 HASTINGS L.J. 1435
(1975).
'See generally Mauk, Wrongful Discharge: The Erosion of 100 Years of Employer Privilege, 21 IDAHo L.
REV. 201 (1985); Summers, Individual Protection Against Unjust Dismissal: Time For A Statute, 62 VA. L.
REV. 481 (1976); Peck, Unjust Discharges From Employment: A Necessary Change in the Law, 40 OHIO ST.
L.J. I (1979); Bellace, A Right of Fair Dismissal: Enforcing a Statutory Guarantee, 16 U. MICH. J.L. REF.
207 (1983); Comment, The Employment At Will Doctrine: Time To Collapse Another Citadel, I1 U. DAYTON L. REV. 399 (1986) (hereinafter referred to as Time to Collapse Another Citadel); Note, Defining Public
Policy Torts in At-Will Dismissals 34 STAN. L. REV. 153 (1981) (hereinafter referred to as Note, Defining
Public Policy Torts); Note, Protecting At Will Employees Against Wrongful Discharge: The Duty To Terminate Only in Good Faith, 93 HARV. L. REV. 1816 (1980) (hereinafter referred to as The Duty to Terminate
Only in Good Faith); Note, Protecting Employees At Will Against Wrongful Discharge: The Public Policy
Exception, 96 HARV. L. REV. 1931 (1983) (hereinafter referred to as Protecting Employees At Will.)
423
Ohio St. 3d 100, 491 N.E.2d 1114 (1986); see infra notes 73-83 and accompanying text.
'See Note, Implied Contract Rights to Job Security, 26 STAN. L. REV. 335,340 (1974) (hereinafter referred to
as Implied Contract Rights); ProtectingEmployees At Will. supra note 3, at 1933. See also Feinman, The
Development of the Employment at Will Rule, 20 AM. J. LEGAL HisT. 118, 119-120 (1976), which quotes
Blackstone as follows:
If the hiring be general, without any particular time limited, the law construes it to be a hiring for a
year; upon a principle of natural equity, that the servant shall serve, and the master maintain him,
throughout all the revolutions of the respective seasons, as well when there is work to be done as
when there is not.
1H. WOOD, MASTER AND SERVANT (1st ed. 1877).
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[Vol. 20:3
seeks to make it out a yearly hiring, the burden is upon him to establish it by
proof.. .'7 Courts soon thereafter embraced this rule, giving it universal application." Although Wood offered no justifications or policy grounds for the
at-will rule,9 commentators have hypothesized that it comported with the
laissez-faire and freedom of contract ideologies existent in the late nineteenth
and early twentieth centuries. 0 Judicial adoption of the at-will rule facilitated
the needs of a rapidly industrializing economy because employer was given a
free hand to manage the workplace." Finally, contract doctrines such as
mutuality of obligation and consideration acted as further legal justifications
12
for the at-will rule.
In the course of time, unionization" and governmental regulation of the
workplace"4 have somewhat alleviated the harsh effects of the at-will rule.
Despite these mechanisms, approximately seventy million people remain
vulnerable to discharge under the rule. 5 For this reason, discharged employees
have sought judicial intervention as an alternative means of modifying the
time-honored at-will rule.
THE PUBLIC POLICY EXCEPTION
Definition/Sources of Public Policy
The judicially created cause of action for wrongful discharge" is
predicated upon the employer's discharge of an employee who engages in some
'Id. at § 134.
'See generally Feinman, supra note 5, at 126 [citing 1 C. LABATr, MASTER AND SERVANT, § 159 n.2 (2d ed.
1913)]; See also I WILLISTON, CONTRACTS, § 39 (rev. ed. 1938).
'See Implied Contract Rights, supra note 5, at 341; Feinman, supra note 5, at 126.
1"See Implied Contract Rights, supra note 5, at 343; Mauk, supra note 3, at 202; Feinman, supra note 5, at
126; Protecting Employees at Will, supra note 3, at 1933.
"See Murg & Scharman, Employment At Will: Do The Exceptions Overwhelm the Rule? 23 B.C.L. REV.
329, 335 (1982) [citing G. BLOOM & H. NORTHRUP, EcONOMIcSOF LABOR RELATIONS 227-316 (7th ed. 1973)]
"See Marg & Scharman, supra note 11, at 336-338. The doctrine of mutuality provides that "both parties to
a contract must be bound or neither is bound." A. CORBIN, I CORBIN ON CONTRACTS § 152 (1950). Courts in
applying this doctrine to the employer-employee relationship reasoned that since the employee was not
bound to provide services, the employer should be under no duty to provide employment in an at will setting.
Marg and Scharman, supra note 11, at 336-337. However, treatise writers such as J. CALAMARI AND J.
PERILLO, CONTRACTS § 4-14 (2d ed. 1977) have criticized the doctrine as a "misleading notion that both parties must be 'bound'," and have urged its abandonment. Id.
See also IA CORBIN ON CONTRACTS, § 152 (1963
& Supp. 1971); RESTATEMENT (SECOND) OF CONTRACTS § 81 (1979); See generally Note, Mutuality of Obligation in Bilateral Contracts at Law, 25 COLUM. L. REV. 705 (1925).
"See Protecting At Will Employees, supra note 3, at 1934: "Collective bargaining agreements protect approximately twenty-five percent of the nonagricultural United States labor force."
"See Marg & Scharman, supra note 11, at 338 n.54 and 339 n.60 for a list of federal statutes which protect
workers from being discharged for specified activities.
"See Protecting At Will Employees, supra note 3, at 1934; St. Antoine, Employee Terminations and the
Erosion of theAt WillDoctrine, in DEVELOPING RIGHTS OF EMPLOYEES IN THE WORKPLACE, 36-38 (C. Bakaly & J. Feerick eds. 1981).
"See, e.g., Adler v. American Standard Corp., 291 Md. 31, 36, 432 A.2d 464, 467 n.2 (Ct. App. 1981)
(although courts have described such discharges as "wrongful," "abusive," or "retaliatory," use of the phrase
"wrongful discharge" covers all three characterizations.)
Winter, 19871
COMMENTS
type of activity which is protected by the "public policy" of that state."
Generally, public policy refers to "the principle which declares that no one can
'
lawfully do that which has a tendency to be injurious to the public welfare." "
9
It concerns the "community common sense and common conscience,"' and
protects against acts that lend themselves to "injustice or oppression, restraint
of liberty, commerce and natural or legal right."' Such a broad definition of
what constitutes public policy caused Justice Sutherland in Patton v. United
States2' to remark that:
the theory of public policy embodies a doctrine of vague and
.....
variable quality, and unless deducible in the given circumstances from
constitutional or statutory provisions, should be accepted as the basis of a
judicial determination, if at all, only with the utmost circumspection. The
public policy of one generation may not, under changed conditions, be the
public policy of another.22
As it relates to the employment relationship, finding a workable definition
of "public policy" determines whether a state court will sanction the public
policy based wrongful discharge tort. 3 In states adopting this exception, the
sources of public policy from which courts draw support will determine
whether a specific employer-employee fact pattern will justify the wrongful
discharge limitation. ' Courts have differed as to the sources of bona fide state
expressions of public policy, and how clear or substantial the public policy
5
source must be to support a wrongful discharge claim.
"Murg & Scharman, supra note 11, at 343-44.
"Campbell v. Monumental Life Ins. Co., 32 Ohio L. Abs. 107, 108, 34 N.E.2d 268, 274 (1940); See also
Adler, 291 Md. at 45, 432 A.2d at 472; Maryland National Capital Park and Planning Commission v.
Washington National Arena, 282 Md. 588, 605, 606, 386 A.2d 1216, 1228-29 (1978).
"Snyder v. Ridge Hill Memorial Park, 61 Ohio App. 271, 287, 22 N.E. 2d 559, 566 (1938).
"Stocker v. Henne, 11 Ohio Dec. 733, 736-37, 8 Ohio N.P. 514, 516 (C.P. 1901).
21281 U.S. 276 (1930).
'Id. at 306. See also Lamont Building Co. v. Court, 147 Ohio St. 183, 185, 70 N.E. 2d 447, 448 (1946)
("public policy is an uncertain and indefinite term ... [and judges] must take care not to infringe on the
rights of parties to make contracts . . .); Hinrichs v. Tranquilaire Hospital, 352 So. 2d 1130, 1131 (Ala.
1977) (public policy is "too vague a concept" to justify allowing for a wrongful discharge exception to an at
will employment agreement); Maryland-National Capital Park, 282 Md. at 605-606, 386 A.2d at 1228
(1978) (there is no true workable definition of public policy, and as a result, judges are forced to discern
public policy "based on nothing more than their own personal experience and intellectual capacity.")
"Protecting Employees At Will, supra note 3, at 1947.
'See Guidelines for A Public Policy Exception, supra note 2, at 622-23. The author identifies seven origins
of public policy as follows: "1) [public policy derivedl from no source; 2) from the social desirability of an activity or the importance of a community interest; 3) from related, but not directly implicated, constitutional
and statutory provisions and case law; 4) from common law principles conferring a right on an employee or
imposing an obligation on an employer; 5) from a statute conferring a right on the employee or making illegal an act performed by an employee at the request of his employer 6) from a statute which not only makes
illegal the act the employer asks the employee to perform, but also subjects the employee to criminal liability; and 7) from a statute that prohibits the discharge." Id. at 623.
'See generally Mauk, supra note 3, at 229-245; Guidelines For A Public Policy Exception, supra note 2, at
622-623; Murg & Scharman, supra note 11, at 343-355; Protecting Employees At Will, supra note 3, at
1936-1937; Defining Public Policy Torts, supra note 3, at 155-158; The Private Sector At Will Employee,
supra note 2, at 787-799; Time to Collapse Another Citadel, supra note 3, at 404.
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Undoubtedly, the most wide-ranging and least principled basis for deducing public policy concerns is through judicial self-expression. For example, the
Illinois Supreme Court, in Palmateerv. InternationalHarvesterCo.26 held that
the plaintiff-employee, who was fired in retaliation for reporting a fellow
employee suspected of criminal activity to law enforcement officials, stated a
cause of action for wrongful discharge. The impetus for the court's decision
was that public policy favored citizen cooperation with law enforcement officials in order to expose crime and to enforce criminal statutes.27 This public
policy notion, although deemed "important" or "fundamental,"28 had no constitutional or statutory basis for its recognition.29
Similarly, the New Hampshire Supreme Court in Monge v. Beebe Rubber
Co.30 modified the at-will rule without offering any constitutional, statutory, or
common law foundation for its holding. Although noting that changing legal,
social, and economic conditions had significantly altered the traditional
employer-employee relationship, 3" the court cited no precedent for the blanket
rule that "in all employment contracts, the employer's interest in running his
business as he sees fit must be balanced against the interest of the employee in
his employment and the public's interest in maintaining a proper balance between the two."32 Thus, any terminations motivated by bad-faith or malice
contravened the public's best interests, and struck the balance in favor of an
employee claim for breach of contract.3 The Monge Court placed misguided
reliance on two foreign cases3" in support of its holding, as these decisions had
created a wrongful discharge remedy from expressions of public policy implied
from statutory provisions. 5
A major drawback to judicially-defined public policy is its lack of
legislative input for broad scale "reapportionment of legal rights within the
employment relationship." 6 Employer breaches of public policy are considered
breaches of duties imposed by law and require the judiciary to scrutinize the
2685 I11.2d 124, 133 421 N.E.2d 876, 880 (1981).
"Id. at 132, 421 NE.2d at 880.
2SId.
9
2 1d.
- 114 N.H. 130, 316 A.2d 549 (1974).
"1Monge, 114 N.H. at 132-33, 316 A.2d at 551.
2Id.
"Id. Monge has been criticized for its lack of clarity as to whether it created a public policy exception
grounded in tort, or a "bad-faith" limitation sounding in contract. See Mauk, supra note 3,at 207 (explaining
that Monge represents a tort-contract hybrid, and that courts have cited Monge as supportive of both the
public policy (tort) and bad-faith (contract) limitation on the at-will rule).
14Monge, 114 N.H. at 133, 316 A.2d at 551; See Frampton v. Central Indiana Gas Co., 260 Ind. 249, 297
N.E. 2d 425 (1973); Petermann v. International Brotherhood of Teamsters, 174 Cal. App. 2d 184, 344 P.2d
25 (1959). See infra notes 43-45, 59-61, and accompanying text.
"See infra notes 43-45, 59-61 and accompanying text.
IThe Private Sector At Will Employee, supra note 2, at 797.
"Mauk, supra note 3, at 229.
Winter, 1987]
COMMENTS
social acceptability of the employer's conduct38 in reviewing a wrongful
discharge claim. This process lends itself to an ad hoc adjudication of
discharges within the employment relationship.39 Consequently, the employer
is left with no clear guidelines as to what types of discharge will ultimately
result in a successful wrongful discharge claim.
Recognizing the rather arbitrary and unpredictable nature of judiciallyformulated notions of public policy, courts have looked to positive law ° for
guidance in shaping the contours of public policy in the employment setting.
Statutes, which are considered the best evidentiary sources of public policy, '
have provided the most common method of gathering public policy from
which a wrongful discharge remedy is created."2
Wrongful discharge claims for breaches of public policy that are derived
from legislative enactments can be positioned into two broad categories. The
first category concerns statutes which confer a right to an employee within the
ambit of the employment relationship, such as the right to file a worker compensation claim. Frampton v. Central Indiana Gas Co. 3 concerned an
employee who was discharged after filing such a claim. The Indiana Supreme
Court noted that worker's compensation was enacted for the benefit of
employees and unless an employee was given a wrongful discharge remedy to
combat a retaliatory discharge, "a deleterious effect on the exercise of a
statutory right"" would occur. The important public policy breached in
Framptonwas the unfettered right on the part of the employee to file a compensation claim pursuant to the Indiana Workman's Compensation Act. '
The Michigan and Illinois courts followed the Frampton court's lead in
Sventko v. Kroger Co." and Kelsay v. Motorola, Inc. 4' These cases also in"Defining Public Policy Torts, supra note 3, at 158.
"See Protecting The Private Sector At Will Employee. supra note 2, at 798.
'Positive law refers to "[llaw actually and specifically enacted or adopted by proper authority for the government of an organized jural society." BLACK'S LAw DICTIONARY 1046 (5th ed. 1979). This definition would in-
clude constitutions and statutes.
"See 2A S. SUTHERLAND, STATUTORY
CONSTRUCTION,
§ 56.01 (4th ed. 1984) [hereinafter referred to as
STATUTORY CONSTRUCTION1.
41See generally id. at § 56.02, where the author states:
A classic example of the use of public policy derived from statutes as a legal determinant occurs in the
law pertaining to the question of what contracts are unenforceable because of illegality. Contracts
made in violation of a criminal statute are generally held to be illegal on the basis of statutory public
policy, although no civil sanctions are expressly imposed.
'260 Ind. 249, 297 N.E.2d 425 (1973).
"Id. at 251, 297 N.E.2d at 427. In part, the court relied upon IND. CODE §22-3-2-14 (197 1) which states: "No
contract or agreement, written or implied, no rule, regulation or other device shall, in any manner, operate
to relieve any employer in whole or in part of any obligation created by this act." Id. at 252, 297 N.E.2d at
427-28. The court ruled that an employer discharge in this manner constituted a "device," id. at 252, 297
N.E.2d at 428, but reliance on this express statutory provision was only tangentially related the court's
analysis of what public policies the Act embodied.
45]d
169 Mich. App. 644, 245 N.W.2d 151 (1976).
"74 111.
2d 172, 384 N.E.2d 353 (1979).
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[Vol. 20:3
volved employees discharged for pursuing worker's compensation claims. Both
courts held that a wrongful discharge cause of action was proper despite the
fact that the worker's compensation statutes neither prohibited nor provided a
remedy for a retaliatory firing.48 The public policy which the employer discharges offended was an efficient employee remedy system envisioned by the
statutory scheme of the Acts read as a whole. 9 Large-scale retaliatory firings
would deprive the injured employee a compensatory remedy and, thus, subvert
the legislative policies embodied in the worker's compensation statutes. 0
An employer's interference with an employee's right to secure a minimum
wage necessitated a cause of action for wrongful discharge in Montalvo v.
Zamora5". Montalvo involved a plaintiff-employee who was discharged after
sending to his employer a written request to be paid the California minimum
wage. The Court of Appeals reversed the trial court and held that plaintiff had
stated a cause of action under California Labor Code Section 9232 and The
Minimum Wage Law for Women and Minors." Under Section 923, the public
"See Sventko, 69 Mich App. at 649, 245 N.W.2d at 154 (Although "[tlhe Legislature has not made
retaliatory discharges.., a subject of any criminal sanction... Itlhis is certainly no indication on the part of
the Legislature that [this type of]conduct is consistent with public policy."); Kelsay, 74 III. 2d at 182, 384
N.E.2d at 357 (court noting that legislative intent not to proscribe retaliatory firing through silence would be
inconsistent with the overall purpose of the Illinois Workmen's Compensation Act.)
"See Sventko, 69 Mich. App. at 647-48, 245 N.W.2d at 153-54; Kelsay, 74 11.2d at 180-81, 38 N.E.2d at
357.
'*Sventko, 69 Mich. App. at 648, 245 N.W.2d at 153; Kelsay, 74 111. 2d at 182, 384 N.E.2d at 357. Not all
states have implied a wrongful discharge tort from workmen's compensation legislation. In Christy v.
Petrus, 365 Mo. 1187, 1189, 295 S.W. 2d 122-124 (1956), the Missouri Workmen's Compensation Act provided for criminal liability where the employer interfered with any rights within the Act granted to
employees. The Missouri Supreme Court held that "a statute which creates a criminal offense and provides a
penalty for its violation, will not be construed as creating a new civil cause of action ...unless such appears
by express terms or by clear implication to have been the legislative intent." Id. at 1192, 295 S.W.2d at 126.
Christy's reasoning was found persuasive to a North Carolina Court of Appeals in Dockery v. Lampart
Table Co., 36 N.C. App. 293, 297, 244 S.E.2d 272, 275 (1978) The Dockery court ruled that the absence of a
statutory wrongful discharge remedy evinced a legislative intent not to address this problem. Id. However, in
1979, N.C. GEN STAT. § 97-6.1 (1979) was added to the North Carolina Workmen's Compensation Act. Section 97-6. 1(a) prohibits employer discharges where the employee institutes any proceedings under the Act,
and 97-6.1(b) imposes civil liability for damages upon a violation of 97-6.1(a).
See also Segal v. Arrow Industries Corp., 364 So.2d 89, 90 (Fla. Dist. Ct. App. 1978) (court in one
paragraph, per curiam decision rejected Frampton,see supra notes 43-45 and accompanying text, and Sventko, see supra notes 46-50 and accompanying text).
517 Cal. App. 3d 69, 86 Cal. Rptr. 401 (1970).
"The statute declared that ". ..the public policy of this State is as follows:
Negotiation of terms and conditions of labor should result from voluntary agreement between
employer and employees. Governmental authority has permitted and encouraged employers to
organize in the corporate and other forms of capital control. In dealing with such employers, the individual unorganized worker is helpless to exercise actual liberty of contract and to protect his
freedom of labor, and thereby to obtain acceptable terms and conditions of employment. Therefore it
is necessary that the individual workman have full freedom of association, self-organization, and
designation of representatives of his own choosing, to negotiate the terms and conditions of his
employment, and that he shall be free from the interference, restraint, or coercion of employers of
labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.
Id. at 73-75, 86 Cal. Rptr. at 403-04, quoting CAL. LABOR CODE § 923 (West 1971).
51
Any employer who discharges, threatens to discharge, or in any other manner discriminates against
any employee because the employee has testified or is about to testify, or because the employer
believes that the employee will testify in any investigation or proceedings relative to the enforcement
of this chapter, is guilty of a misdemeanor.
Winter, 19871
COMMENTS
policy expressly declared was the right of the employee to ".
.
. negotiate the
terms and conditions of his employment.. .-4 As the employee was a member
of the class protected by the statute, a wrongful discharge suit for damages was
proper, despite the absence of a specific remedy within Section 923. 55 The
employer's conduct was held to be actionable under the Minimum Wage provisions because the statute established as public policy the protection of women
and children.56 It is significant that a wrongful discharge action was similarly
implied under the Minimum Wage laws and the imposition of criminal liability
on the employer did not preclude this civil remedy."
The second category of positive law that has sanctioned wrongful
discharge relief is statutory or constitutional provisions from which both
employee rights and a wrongful discharge remedy are implied. They have no
per se application to the employment relationship, yet the employer's actions
contravene the public policy considerations that are ingrained in these
sources.5" Allowing an employee to sue for damages under a wrongful
discharge theory facilitates the policy concerns found in these sources.
A subset of this category concerns employment-related acts which place
the employee under threat of criminal penalty. For example, in Petermann v.
International Brotherhood of Teamsters, Local 3965", the plaintiff, a union
business agent, refused his supervisor's request to make false statements at a
committee hearing. A cause of action for the employee's subsequent discharge
was mandated by the state's declared policy against perjury reflected in its
penal code.6 Denying a civil remedy would seriously impair this public policy
and hamper the administration of justice in general.6' The reasoning in PeterId. at 76, 86 Cal. Rptr. at 405.
'Id.
at 73, 86 Cal. Rptr. at 403.
"Id.
at 74, 86 Cal. Rptr. at 403.
1Id. at 76, 86 Cal. Rptr. at 405.
"Id See also Glenn v. Clearman's Golden Cock Inn, 192 Cal. App. 2d 793, 13 Cal. Rptr. 769 (1961) (court
held that employer's discharge of employee exercising rights under California Labor Code to apply for union
membership was actionable under wrongful discharge theory notwithstanding the imposition of criminal
liability on the employer and the absence of a statutory provision allowing a civil action for damages). The
wrongful discharge tort has also been recognized outside of the labor relations context. See Perks v.
Firestone Tire & Rubber Co., 611 F.2d 1363, 1366 (3rd Cir. 1979), where the court held that a statute proscribing the use of polygraph examinations in the employment setting embodied a recognized facet of public
policy sufficient to allow a wrongful discharge claim. The court cited State v. Community Distributors, Inc.,
64 N.J. 479, 317 A.2d 697 (1974) wherein the New Jersey Supreme Court had concluded that problems in
administering and objectively interpreting polygraph tests, as well as privacy and self-incrimination con-
cerns, militated against their overall effectiveness. Perks, 611 F.2d at 1365. See generally Herman, Privacy,
The Prospective Employee and Employment Testing: The
Testing, 47 WASH. L. REV. 73 (1972). Although the pertinent
criminal liability, Perks, 611 F.2d at 1365, a civil wrongful
employee because of the policy concerns noted above.
"See The PrivateSector At Will Employee, supra note 2, at
Need to Restrict Polygraph and Personality
statute alluded to in Perks provided solely for
discharge action was implied in favor of the
791.
11174 Cal. App.2d 184, 344 P.2d 25 (1959).
'Id. at 188-89, 344 P.2d at 27.
11Id. See also O'Sullivan v. Mallon, 160 N.J. Super 416, 418, 390 A.2d 149, 150 (1978) (Rationale of Petermann extended and applied to X-ray technician discharged for failure to perform catheterizations that
would place the employee in violation of state Medical Practice Act).
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mann laid the doctrinal foundation for protecting employees who were
discharged for refusal to alter pollution control reports,62 participate in the illegal fixing of retail gasoline prices,63 commit other illegal acts in furtherance of
antitrust violations," or acquiesce to the mislabeling of food products65 - all
under fear of criminal liability.
However, it is not necessary that the refusal to heed the employer's
solicitations directly implicate the employee in criminal activity for a cause of
action in wrongful discharge to lie. In Harless v. FirstNationalBank in Fairmont,66an employee alleged he was discharged for bringing violations of West
Virginia and federal consumer credit and protection laws to his superior's attention. 67 The West Virginia Supreme Court of Appeals allowed the
employee's wrongful discharge claim. The Court focused on the Legislature's
"comprehensive attempt to extend protection to the consumers and persons
who obtain credit.. ." as evidenced in the West Virginia Consumer Credit and
Protection Act.68 As the Act affected a substantial number of people within the
state, the unequivocal public policy of consumer protection would be
frustrated if the employer was allowed to discharge an employee seeking compliance with its terms.69
Nees v. Hocks7° illustrated that public policy can be inferentially deduced
from state constitutional and statutory provisions and applied to the employment setting accordingly. Nees involved allegations that an employee was
"See Trombetta v. Detroit, Toledo and Ironton R.R. Co., 81 Mich. App. 489, 265 N.W.2d 385 (1978).
Reasoning "that the public policy of this state does not condone attempts to violate its duly enacted laws,"
Id. at 495, 265 N.W.2d at 388, the court held actionable the employer's discharge of the plaintiff in retaliation for refusing to alter reports and adjust sampling results required to be filed with the state of Michigan.
Id. at 496, 265 N.W. 2d at 388. Pursuant to statute, the employee faced the possibility of a misdemeanor
conviction and a $25,000 fine: "A person ... who renders inaccurate a monitoring device or record required
to be maintained by the commission is guilty of a misdemeanor and shall be fined not less than $2,500.00 nor
more than $25,000.00 for each violation." Mich. Comp. Laws Ann. § 323.10(2) (West 1971).
"See Tameny v. Atlantic Richfield Co., 27 Cal. 3d 167, 610 P.2d 1330, 164 Cal. Rptr 839 (1980). The
employee claimed his discharge stemmed from his refusal to threaten independent service station owners to
reduce gasoline prices in an amount set by his employer. In responding to plaintiffs complaint, the court
analogized his situation to Petermann, 174 Cal. App. 184, 344 P.2d 25 (1949) and found that "an employer's
authority over its employee does not include the right to demand that the employee commit a criminal act to
further its interests, and an employer may not coerce compliance with such unlawful directions by discharging an employee who refuses to follow such an order." Tameny 27 Cal. 3d at 178, 610 P.2d at 1336-1337,
164 Cal. Rptr. at 846.
"See McNulty v. Borden Inc., 474 F. Supp. 1111 (E.D. Pa. 1979).
"See Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. 471, 427 A.2d 385 (1980). It is not altogether clear
from the majority opinion the specific underlying basis for the modification of the at will rule, although the
court placed much emphasis on the fact that had the plaintiff participated in the mislabeling scheme, he faced
potential criminal liability under the Connecticut Uniform Food, Drug and Cosmetic Act. Id. at 478, 427
A.2d at 388.
"246 S.E. 2d 270 (W. Va. 1978).
7Id. at 272.
"Id. at 275-276.
"Id. at 276. Although the court noted that violations of the Act could result in criminal penalties, the plaintiff employee was not subject to criminal liability under the Act.
70272 Or. 210, 536 P.2d 512 (1975).
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discharged for being called and serving on a jury. The starting point for the
Supreme Court of Oregon's analysis was the Oregon Constitution, which provided a right to a jury trial in criminal and civil cases in the presence of competent jurors." These provisions, along with state statutes excusing potential
jurors only in certain limited instances, indicated "that the jury system and
jury duty are regarded as high on the scale of American Institutions and
citizen obligations."" In order to promote the "substantial societal interests in
having citizens serve on juries"73 and to ensure the viability of the jury system,
a right in the plaintiff to sue for wrongful discharge was necessary to promote
these ends.
Does the Public Policy Exception to the At Will Employment Agreement Exist in Ohio After Phung?
In Phung v. Waste Management, Inc.,7 ' the plaintiff was a chemist at a
toxic waste disposal site who alleged that his employer had violated "various
statutory, regulatory, and societal obligations" 5 and that his discharge stemmed
from bringing these violations to his superiors' attention.
In a two page opinion, the majority announced three justifications for not
creating a public policy exception as applied to the particular facts of the case.
As an initial matter, the allegations pleaded by Phung "failed to state a violation of a sufficiently clear public policy to warrant creation of a cause of action
"..."
and were merely conclusory. The Ohio Supreme Court went on to state
that public policy did not mandate a per se exception to the employment at will
doctrine "when an employee is discharged for reporting to his employer that it
is conducting its business in violation of the law."" Finally, and perhaps most
significantly, the Court reasoned that matters relating to the protection and
welfare of State employees were primarily a legislative rather than a judicial
concern. Specifically, the Court noted legislative attempts to modify or limit
111d. at 218-219, 536 P.2d at 516.
"Id. at 219, 536 P.2d at 516.
"Id. at 220, 536 P.2d at 516; See aLso Reuther v. Fowler & Williams Inc., 255 Pa. Super. 28, 386 A.2d 119
(1978), where the court decided the same issue in the employee's favor. The Nees court's analysis was persuasive to the Reuther majority, which concluded that a "recognized facet of public policy" was extant from
similar Pennsylvania state constitutional provisions. Id. at 32-33, 386 A.2d at 120-21. One California appellate court has held differently. In Mallard v. Boring, 182 Cal. App. 2d 390, 6 Cal. Rptr. 171 (1960), the
court held that jury duty was not tantamount to a political activity protected by a California statute which
read: "No employer shall make, adopt, or enforce any rule, regulation, or policy ...controlling or directing,
or tending to control or direct the political activities or affiliations of employees." Id.at 394-95, 6 Cal. Rptr.
at 174. Inasmuch as jury duty did not rise to the level of a political activity, the employee's discharge for
serving on a jury was proper. Thus, Mallardwas decided solely on statutory grounds, and no reference was
made to the California state constitution as plaintiff apparently did not raise this as a legal issue.
'423 Ohio St. 3d 100, 491 N.E. 2d 1114 (1986).
"Id. at 101,491 NE 2dat 1115.
"Id. at 102, 491 N.E.2d at 1116-17.
"Id. at 103, 491 N.E.2d at 1117.
781d
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the employment at will doctrine in the areas of worker's compensation and
employment discrimination." The majority opinion was in accord with some
lower Ohio court decisions which had rejected the public policy exception. 0
There is no doubt that employers who are now sued for wrongful
discharge in Ohio will elevate Phung to the legal proposition that no public
policy exception exists in Ohio. However, the majority left many questions
unanswered surrounding the public policy doctrine that Phung cannot be read
so broadly. To the contrary, a careful reading of Phung indicates that the
public policy exception is still an open issue in Ohio.
The majority left unanswered whether the Supreme Court would have entertained plaintiff Phung's complaint if he had alleged with specificity the public policy concerns breached by his employer. A reasonable inference drawn
from the language of the opinion8 ' is that a different result may have been obtained had the plaintiff specified the purported public policy interests at stake.
Secondly, Phung represents less a wholesale rejection of the public policy exception than a narrow rule of law sustaining employer terminations where the
employee reports to his employer that its business practices are in violation of
the law.82 The Court did not address whether a cause of action could be sustained where an employee reported his employer's alleged violations directly to
law enforcement officials - a situation found sufficient to warrant a wrongful
"Id. The majority opinion triggered a stinging dissent from Justice Brown, who expressed disappointment
over the majority's refusal to join the majority of states who had created a public policy exception. See
Dissenting) and cases cited at n.l. The dissent
Phung,23 Ohio St. 3d at 104, 491 N.E.2d at 1117 (Brown, J.,
took issue with the majority's contention that Phung's complaint was defective, noting that inferences
drawn from the language of the complaint clearly implicated violations of "fundamental public policies of
the state of Ohio." Id. at 106, 491 N.E.2d at 1119-1120. Moreover, the majority ignored two statutory provisions that addressed broad public interest concerns. Id. at 107, 491 N.E.2d at 1120. One was OHio REV.
CODE ANN. § 3734.99(A) (Page 1981) which states:
Except as otherwise provided in division (B) of this section, whoever recklessly violates any section of
this chapter, except section 3734.18 of the Revised Code, governing the storage, treatment, transportation, or disposal of hazardous waste is guilty of a felony and shall be fined at least ten thousand
dollars but not more than twenty-five thousand dollars or imprisoned for at least two years but not
more than four years, or both. Whoever violates any section of this chapter governing the disposal of
solid wastes, or violates section 3734.18 of the Revised Code, shall be fined not more than two hundred fifty dollars. Each day of violation constitutes a separate offense.
OHIo REV. CODE ANN. § 2921.22(A) (Page 1975) provides that "no person, knowing that a felony has been
or is being committed, shall knowingly fail to report such information to law enforcement authorities."
These two statutory expressions of public policy would be sufficient to state a cause of action for wrongful
discharge. Phung, 23 Ohio St. 3d at 107, 491 N.E.2d at 1120.
s"See West v. Roadway Express, Inc., 8 Ohio B. 155, 161-63, (1982) (after a thorough review of the jurisdictions upholding or rejecting the public policy exception, the court noted that Ohio had taken no position on
its viability, and other remedies obtainable by statute did not warrant establishing the doctrine subjudice);
Rachubka v. St. Thomas Hospital Medical Center, No. 11596 (9th Dis. Ct. App. October 10, 1984)
(available in Ohio App. Dec. on Fiche 84-28-9d); Aylward v. First Bankcorp., (9th Dist. Ct. App. September
12, 1984) (available in Ohio App. Dec. on Fiche 84-24-9d); Teubert v. Elkem Metals Co., (4th Dist. Ct. App.
December 19, 1984) (available in Ohio App. Dec. on Fiche 84-19-4d); Senft v. General Electric Co., (6th dist.
Ct. App. July 9, 1982) (available in Ohio App. Dec. on Fiche 82-15-6d).
i"See Phung, 23 Ohio St. 3d 100, 491 NE 2d 1114.
'The official court syllabus states: "Public policy does not require that there be an exception to the
employment-at-will doctrine when an employee is discharged for reporting to his employer that it is conducting its business in violation of law." Phung, 23 Ohio St. at 100, 491 N.E. 2d at 1114 (emphasis added).
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discharge cause of action by at least one state supreme court. 3
Finally, the Phung court's view that the judiciary should play a limited
role in employment matters84 is an unnecessarily narrow one for several
reasons. For example, Ohio courts" have granted injured employees the right
to pursue an action against their employers for intentional torts notwithstanding the fact that the Ohio Worker Compensation statutes" did not expressly
grant such a right. This judicial intervention indicates that the legislature and
the judiciary have at least played a dual role in shaping the contours of the
employment relationship.
Several other factors militate in favor of sanctioning a similar right on the
part of the employee to bring a cause of action for wrongful discharge. Insofar
as the employment at will rule is a judicially created doctrine,87 "it is appropriate that ...newly recognized exceptions to its application should come
from judicial decisions." 8 In other areas of judicially created law, courts have
not hesitated to bring about change when circumstances have merited the need
to do so. 9
Furthermore, the realities of the legislative process impact upon the interrelationship between legislatures and courts in the creation of new rights and
duties. A major criticism of deferring employment matters to the legislature is
that:
statutes are not enacted because they incorporate good ideas or principles;
rather, they are enacted because organized interest groups lobby for their
enactment. Employees who have not been organized by a labor union are
"See supra notes 26-29 and accompanying text.
"See Phung, 23 Ohio St. 3d at 103, 491 N.E. 2d at 1117.
"See Jones v. V.I.P. Development Co., 15 Ohio St. 3d 90, 472 N.E.2d 1046 (1984); Blankenship v. Cincinnati Milacron Chemicals, Inc., 69 Ohio St. 2d 608, 433 N.E.2d 572 (1982), cert denied 459 U.S. 857 (1982);
Delamotte v. Midland Ross, 64 Ohio App. 2d 159, 411 N.E.2d 814 (1978).
The Blankenship court noted that ". . . neither the relevant [Ohio) constitutional language nor the pertinent statutory language expressly extend the grant of immunity to actions alleging intentional tortious conduct by employers against their employees." Blankenship, 69 Ohio St.2d at 612, 433 N.E.2d at 575-576 (emphasis added).
"See OHIO REV. CODE ANN. § 4123.74 et seq (Page 1980).
"See Mauk, supra note 3, at 255; see also Phung, 23 Ohio St. 3d at 107, 491 N.E. 2d at 1120 (1986) (Brown,
J.,
dissenting); notes 5-12 and accompanying text).
"Mauk, supra note 3, at 255.
"The common law doctrine of sovereign immunity is a prime example. See Kojis v. Doctor's Hospital, 12
Wis. 2d 367, 107 N.W.2d 131 (1961) modified, 12 Wis. 2d 367, 107 N.W.2d (1961). In abrogating the doctrine, the court noted that "the rule of stare decisis, however desirable from the standpoint of certainty and
stability, does not require us to perpetuate a doctrine that should no longer be applicable in view of the
changes in present day charitable hospitals." Id. at 372, 107 N.W.2d at 133-34; McAndrew v. Mularchuk,
33 N.J. 172, 193, 162 A.2d 820, 832 (1960) (insofar as governmental immunity limitations of respondeat
superior were placed there by the judiciary, "it cannot be urged successfully that an outmoded, inequitable,
and artificial curtailment of a general rule of action created by the judicial branch of government cannot or
should not be removed by its creator"); Hargrove v. Town of Cocoa Beach, 96 So.2d 130, 132 (1957) (seeing
"no necessity for insisting on legislative action in a matter which the courts themselves originated"); See also
Pierce v. Yakima Valley Memorial Hospital Ass'n., 43 Wash. 2d 162, 260 P.2d 765 (Sup. Ct. 1953); Collopy
v. Newark Eye and Ear Infirmary, 27 N.J. 29, 141 A.2d 276 (1958).
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exactly that: unorganized and therefore lacking in the unity of purpose
and effort that produces a successful lobby. On the other hand, employers
have associations that traditionally have lobbied against legislation conflicting with employer interests...90
Furthermore, general legislative indifference in areas such as tort
reform, 9' a high turnover rate of elected representatives, 92 and a less than conducive legislative work environment93 taints the notion that wholesale changes
in employment affairs should await legislative directive.
Given these legislative impediments, it is logical to conclude that the
judiciary should be the catalyst in reforming the employment at will rule. 94 Endorsing judicial reform in this area is a mere recognition that our American
system of jurisprudence has always delegated to courts a proportionate role of
improving the law and preserving its continuity. 95 In addition, there exists an
important legislative check on an overzealous judiciary: the legislature is free
to overturn or modify "the determination of a respected body of impartial men
[or women]."
96
A PROPOSAL FOR OHIO
As employment matters, in general, and the at-will rule in particular, are
not solely areas of legislative concern, the relevant inquiry involves identifying
those circumstances in which a wrongful discharge cause of action may be
legitimately applied. Establishing a workable set of criteria borrowed from
other jurisdictions will result in a set of guidelines that should minimize vexatious lawsuits and protect the employee from an unjust discharge.
To temper fears of judicial policy making and the unpredictability that
would result, 97 courts should imply a wrongful discharge action only where
9'See Peck, supra note 3, at 3.
91
See Peck, The Role of Courts and Legislatures in the Reform of Tort Law, 48 MINN. L. REV. 265, 268
(1963).
273.
"Id. at 272. Although Peck urges active judicial reform in problematic areas such as contributorycomparative negligence, Id. at 304-305; contribution, Id.at 307-308; emotional distress, Id.; and liability of
land owners and occupiers, Id. at 309-311. The aforementioned factors which impact upon legislative decision making would have universal application to any legislation in general, including legislation (or the lack
thereo) in the employment-at-will arena.
'Id. at 285. An example of a legislative response to a judicial determination in the employment area is provided by Fawcett v. Murphy Co., 46 Ohio St. 2d 245, 348 N.E.2d 144 (1976). In Fawcett, the Ohio Supreme
Court held that a violation of Ohio's age discrimination statute (OHIO REV. CODE ANN. § 4101.17(A) (Page
1980)) did not give rise to a civil cause of action for damages since such a right was not intended "by clear
implication." Id. at 249, 348 N.E.2d at 147. Three years subsequent to Fawcett, the Ohio Legislature
responded by adding § 4101.17(B), which expressly granted the right to bring a civil action for a violation of
§ 4101.17(A) See OHIO REV. CODE ANN. § 4101.17(B) (Page 1979).
15R. KEETON, VENTURING TO DO JUSTICE, 11(1969).
"Peck, supra note 90, at 286.
"See supra notes 16-26 and accompanying text.
9id. at
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there is a clearly articulated statutory or constitutional expression of public
policy. For instance, remedial legislation enacted for the benefit of a class, like
consumers9" or those covered by worker's compensation," implicates policy
concerns deserving of protection due to the "pervasive legislative scheme"'"
underlying such acts. Relevant criminal code provisions could also provide sufficient indicia of legitimate state public policy.'
As a second limitation on the wrongful discharge tort, the employer's actions must significantly impair or frustrate the policies envisioned in these
sources. In essence, the employer's act in discharging the employee should not
only harm the employee, but society in general since "the crux of the wrongful
discharge tort lies in the harm, threatened or actual, to society should
employers be free to discharge for a particular reason."'' 2 Frampton'03 and
Sventko °' are illustrative of the manifest harm to all workers that would flow
from a discharge pursuant to filing a compensation claim. The harm to our institutional jury system' 05 and the undermining of the administration of
justice' 6 also exemplify the type of broad threat to society that should trigger a
cause of action. However, where the discharge only minimally affects the
public or societal interest, 07 or merely involves private or proprietary
interests, 0' no cause of action should be implied.
Procedurally, the discharged employee should be required to plead with
specificity the public policy concerns allegedly breached by the employer. The
specificity burden would serve to notify the employer of the underlying basis of
the claim and to satisfy the apparent unwillingness of some courts to let the
employee rely on conclusory allegations in wrongful discharge pleadings.' °9
"See supra notes 66-68 and accompanying text.
"See supra notes 43-50 and accompanying text.
'"See RESTATEMENT (SECOND) OF TORTS § 874(A) comment i. (Proposed official draft 1977).
"'See supra notes 59-61 and accompanying text.
"Guidelines for A Public Policy Exception, supra note 2, at 636.
""See supra notes 43-45 and accompanying text.
"'See supra notes 46-50 and accompanying text.
'"See supra notes 69-72 and accompanying text.
'"See supra notes 59-61 and accompanying text.
"'7See Guidelines For a Public Policy Exception, supra note 2, at 639-640.
""See Campbell v. Ford Indus., Inc., 266 Or. 479 513 P.2d 1153 (1973) (Minority shareholder-employee
allegedly discharged for refusal to acquiesce to a fraudulent forced selling of his stock could not recover
under wrongful discharge theory for injuries to his interest as an employee, but only to his interest as a
shareholder); Percival v. General Motors Corp., 400 F. Supp. 1322 (E.D. Mo. 1975), aff'd 539 F.2d 1126
(8th Cir. 1976) (corporate employee alleging wrongful discharge for urging management to correct potentially misleading information regarding corporations' work on alternative power plants did not implicate any
broad public policy concerns); see also Becket v. Welton Becket & Associates, 39 Cal. App. 3d 815, 114 Cal.
Rptr. 531 (1974); Scroghan v. Kraftco Corp., 551 S.W.2d 811 (Ky 1977); Larsen v. Motor Supply Co., 117
Ariz. 507, 573 P.2d 907 (1977); Jackson v. Minidoka Irrigation Dist., 98 Idaho 330, 563 P.2d 54 (1977); but
see ProtectingEmployees At Will, supra note 3, at 1948 (stating that public-private distinctions as a basis for
wrongful discharge relief often overlap, and therefore should not factor into a determination of whether a
cause of action lies).
"See generally Phung v. Waste Management, Inc., 23 Ohio St. 3d 100, 491 N.E.2d 1114 (1986); Adler v.
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Other procedural devices could be implemented to circumscribe wrongful
discharge litigation. Making the employer's actions presumptively correct or
compelling the employee to prove his case by a "clear and convincing" standard are also worth consideration. 101
In addition, there are two other limitations that would limit application of
the wrongful discharge tort. An employee who has a statutory remedy for the
discharge should be barred from pursuing an independent tort action."'
Underlying this rule is the notion that the employee should not be allowed to
expand his remedies when statutes have specified the method or extent of
recovery."' Finally, legislative repeal or modification exists as an inherent
limitation on the wrongful discharge tort."'
Admittedly the public policy doctrine underlying the wrongful discharge
tort is not a model of clarity." 4 However, courts should not refrain from implementing this remedy where a narrowly tailored set of guidelines, both
substantive and procedural, exist. Certainly, the concept of public policy is no
more vague than other legal standards such as "good faith," "proximate
cause," or "probable cause."
FURTHER LIMITATIONS ON THE AT-WILL RULE: CONTRACT PRINCIPLES
The traditional exceptions to the employment at will rule based on principles of contract law were narrow and few. In order to create a contract for
continued employment, the employee had to show that some type of separate
or additional consideration other than services to be rendered was given to the
employer." 5 If additional consideration was given by the employee, the
American Standard Corp., 291 Md. 31, 432 A.2d 464 (1981); Geary v. United States Steel Corp., 456 Pa.
171, 319 A.2d 174 (1974); Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1980).
"'See Blades, supra note 2, at 1429.
"'Limiting the wrongful discharge rule in this manner would be consistent with present Ohio thought on this
issue. See Hoopes v. Equifax, Inc., 611 F.2d 134 (6th Cir. 1979); Dadas v. Prescott, Bell, and Turben, 529 F.
Supp. 203 (N.D. Ohio 1981); Welch v. Brown's Nursing Home, 20 Ohio App. 3d 15, 484 N.E.2d 178 (1984);
But see Mauk, supra note 3, at 243 and cases cited at n. 213 (contending that the more liberal view is to
recognize wrongful discharge tort as an independent and additional remedy).
"'See cases cited at n. 111 and accompanying text.
"'See supra note 96 and accompanying text.
"'See supra notes 16-25 and accompanying text.
"'See Pearson v. Youngstown Sheet and Tube Co., 332 F.2d 439 (7th Cir. 1964) (discharged at will
employee did not prove additional consideration through allegations that his 28 2 years of service destroyed
his suitability for employment elsewhere); Peterson v. Scott Construction Co., 5 Ohio App. 3d 203, 451
N.E.2d 1236 (1982); but see H.S. Kerbaugh, Inc. v. Gray, 212 F. 716 (2nd Cir. 1914) (at will employee continuing in employment in exchange for employer's promise to pay bonus constituted sufficient consideration
to enforce promise). Of course, an employee could always defeat the at will rule by showing that the parties
never intended such an agreement. In Bascom v. Shillito, 37 Ohio St. 431, (1882), the defendant employer
modified the plaintiff-employee's salary from a monthly to a yearly basis upon the employee's request for
more permanent employment. The employee contended that his discharge subsequent to the modification
was ineffective since the modification was tantamount to a hiring for a term. The employer submitted that
no hiring for a term resulted, and therefore the employee was terminable at will. The Ohio Supreme Court
ruled in favor of the employee, holding that "proof of the periods at which payments were to be made, the
character of the employment, custom, the course of dealing between the parties, or other fact[s]..." should
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employer presumably intended not to discharge except for cause." 6 Absent
some proof of additional consideration, courts consistently refused to construe
indefinite hirings as anything other than at will agreements on the grounds
that such contracts lacked mutuality of obligation."7
Application of the traditional mutuality doctrine to employment and
policy handbooks is illustrated by Johnson v. NationalBeef Packing Co." The
employee discharged in Johnson contended that a "Company Policy Manual"
containing a "just cause" provision, along with statements dealing with
employee benefits, holidays, vacation and insurance, bound the employer expressly or impliedly to a fixed term of employment. The Supreme Court of
Kansas affirmed summary judgment in favor of the employer on the basis that
the manual "was only a unilateral expression of company policy and procedures."" 9 The terms of this "unilateral expression" were not bargained for,
nor was there a meeting of the minds on the statements contained therein. 20
be considered. Id. at 433-434. However, no hiring for a term will be implied merely from a contract which
provides for an annual rate of salary, and is silent as to the duration of employment. See Henkel v. Educational Research Council of America, 45 Ohio St. 2d 249, 344 N.E.2d 118 (1976). See also, Byrd v. Mac
Tools, Inc., NO 81CA6 (12th Dist. Ct. App. June 2, 1982) (available in Ohio App. Dec. on Fiche 87-7-12d).
"'See Murg & Scharman, supra note 3 at 358.
"'See Blades, supra note 2, at 1419 and cases cited at n. 72. For a discussion of the mutuality doctrine, see
supra note 12 and accompanying text.
"'220 Kan. 52, 551 P.2d 779 (1976).
"I91d. at 55, 551 P.2d at 782.
1Id. One Ohio court, in Jones v. East Center For Community Mental Health, Inc., 19 Ohio App.3d 19, 482
N.E.2d 969 (1984) has applied the Johnson approach to personnel manuals. Analyzing the plaintiffemployees personnel handbook within the mutuality of obligation framework, the Court of Appeals held
that the manual failed to create binding obligations since "[the employee] gave nothing in return for [the
promises contained in the manual], and thus.., was not bound by the agreement." Id. at 22, 482 N.E.2d at
973. Since the employee was not bound by the manual's terms, the manual could not be considered a binding
contract to provide for lifetime employment. Id.
Curiously, the same court of appeals less than one month after Jones enforced an employer's written and
oral assurances of severance pay in Helle v. Landmark, Inc. 15 Ohio App. 3d 1,472 N.E,2d 765 (1984). In
Helle, the employer distributed a policy manual establishing a severance plan for employees who were terminated due to economic necessity. The plaintiff employees were also given oral assurances by company
agents of their entitlements to severance pay. Subsequently, the company amended the severance provisions
such that the employees received substantially less severance pay.
In reversing the trial court's dismissal and upholding the severance plan as it existed before the amendment, the court totally abandoned the mutuality of obligation analysis applied in Jones. The Helle court
started from the analytical premise that parties to an at will agreement may otherwise modify it, Id. at 7, 472
N.E.2d at 772, and such modifications are binding where the "paradigm elements" of offer, acceptance, and
consideration are met. Id. at 8, 472 N.E.2d at 774. After concluding that the oral and written representations of severance pay constituted an offer, Id. at 8-9, 472 N.E. 2d at 774-775, the court ruled that acceptance was satisfied when the employee remained on the job after learning of the severance policy. Id. at 10,
472 N.E.2d at 776. Finally, and most importantly, the court abandoned the Jones rationale requiring the
employee to satisfy the element of consideration by giving something in return for the promises contained in
the manual. Rather, "for purposes of consideration, the employee's retention and continued performance of
his work suffice to render the new condition of severance pay enforceable." Id. at 11, 472 N.E. 2d at 775.
Mutuality of obligation had no applicability to unilateral contracts such as employment contracts, which
call for performance of a promise. Id. at 12, 472 N.E. 2d at 776. Thus, the Helle court was in line with
modern contract thought limiting the mutuality doctrine to bilateral contracts, where the parties exchange
reciprocal promises. Id. (citations omitted). See also Boiling v. Clevepack Corp., 20 Ohio App. 3d 113, 484
N.E. 2d 1367 (1984) (Helle followed).
There is no principled reason for applying the mutuality doctrine to Jones and abandoning it in favor of a
more modern approach liberalizing the consideration necessary to give the manual legal effect as the court
did in Helle. Although the employee in Jones sought to imply a contract term for lifetime employment based
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Therefore, the manual was a mere gratuity, and had no binding legal effect on
the employer.
Several factors have coalesced in the movement toward a more liberal
standard of determining what limitations, if any, should be placed on the
employer in an at will relationship. The first is a recognition that "the
presumption that an employment contract is intended to be terminable at will
is subject, like any presumption, to contrary evidence." '' Examining all the
facts and circumstances between the parties may reveal an intent to set the
employment duration for a fixed period of time.' Since the primary focus is on
the intent of the parties, there has been a departure from the mechanical rule
that a contract for permanent employment should always be construed as a
contract terminable at any time by any party.'23 Given this shift in focus,
employment handbooks or policy statements have undergone judicial scrutiny
in search of the parties' intent. The employer ostensibly distributes these
statements with an eye towards receiving certain benefits incident to the
employment relationship.'24 It necessarily follows that the employer may also
have created binding obligations in exchange for these benefits.
Toussiant v. Blue Cross and Blue Shield'25 stands for the proposition that
an at-will employee can be endowed with the contractual right not to be discharged except for cause. The modification of an otherwise at-will agreement
can be implied from the policy manuals or statements distributed to the employee, or through the employer's express oral agreement to terminate only for
on the manual, as opposed the employee in Helle seeking performance of specific promises in the manual,
both situations involved unilateral employment contracts. Furthermore, courts have looked with disfavor
on the employer's argument that cases involving the employee's expectation of benefits grounded in the
manuals are distinguishable from those where the employee seeks to imply a "just cause" termination provision from the manual. See Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579, 598, 292 N.W.2d 880, 882
(court rejected employer's argument that manuals created expectations of certain benefits, but created no expectations of job security).
'Pugh v. See's Candies, Inc., 116 Cal. App. 3d 311, 324, 171 Cal. Rptr. 917, 925 (1981).
'2See Id.
'Pine River State Bank v. Mettile, 333 N.W.2d 622, 630 (Minn. 1983); See also Pugh, 116 Cal. App. 32d at
327, 171 Cal. Rptr. at 925 (employment contracts, like other agreements, should be construed to give effect
to the intention of the parties as demonstrated by the language used, the purpose to be accomplished and the
circumstances under which the agreement was made); Toussaint, 408 Mich. at 610, 292 N.W.2d at 890.
(Although "employers are ... free to enter into employment contracts terminable at will without assigning
cause ... an employer's express agreement to terminate only for cause, or statements of company policy and
procedure ... can give rise to rights enforceable in contract.")
'See Decker, Handbooks and Employment Policies As Express Or Implied Guarantees of Employment -
Employer Beware, 5 J.L. & COMM. 207 (1984-85). Handbooks or employment policies promote an awareness
of company rules, Id. at 210, create order, increase employee morale, and often times provide for procedural
mechanisms for handling disputes. Id. at 211.
25408 Mich. 579, 292 N.W. 2d 880 (1980).
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cause.'26 The manual becomes "instinct with an obligation"' 7 because the elements of offer, acceptance, and consideration are met: the manual constitutes
the offer, the employee's continuing in employment constitutes the acceptance, and the benefits flowing to the employer as a result of policies expressed
in the manual act as consideration.'28 By following the guidelines set out in the
manual, the employer enjoys the advantage of an orderly and loyal work force
through a uniform set of rules applied fairly and consistently to all
employees.'29
An agreement not to discharge except for good cause can be implied even
where no elaborate handbook is distributed by the employer. In Pugh v. See's
Candies, Inc., 30 the court recognized that the employer's conduct in dealing
with its employees can provide the basis for limiting the ability to terminate at
will.' As examining the employer's conduct in each case is a factual question,
relevant circumstances such as the employee's length of employment, commendations and reprimands, assurances given to him or her by the employer,
and other evidence of custom is subject to scrutiny.' Thus, a thirty-two year
employee who provided meritorious service to his company stated a cause of
26
' 1d at 610, 292 N.W. 2d at 890. The Toussaint court identified two instances which would bind the
employer not to terminate the employee except for cause. The first instance involves an employer's oral
representations that could be construed as a promise not to discharge except for good cause. Whether or not
these oral representations lend themselves to a ". . .construction... that the employer has agreed to give up
his right to discharge at will without assigning cause," Id. at 610, 292 N.W.2d at 890, is a question for the
jury. Id. at 613, 292 N.W.2d at 891. The second instance involves the manual itself. Id. at 598, 292 N.W. 2d
at 884.
'"7Id. at 613, 292 N.W.2d at 892 (quoting Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214
(1917)).
"' Toussaint, 408 Mich. at 615-16, 292 N.W.2d at 893 (quoting Cain v. Allen Electric & Equipment Co., 346
Mich. 568, 78 N.W. 2d 296 (1956)). The consideration necessary to support the offer (i.e., the manual) can
also be met where the employee stays on the job and does not exercise his right to leave. See Pine River State
Bank v. Mettile, 333 N.W. 2d 622, 627 (Minn. 1983).
'Toussaint, 408 Mich. at 613, 292 N.W.2d at 892. The Ohio Supreme Court has not expressly ruled
whether a policy manual or handbook can give rise to an implied contract term to be discharged only for
good cause. However, in Hendrick v. Center For Comprehensive Alcoholism Treatment, 7 Ohio App. 3d
211, 454 N.E.2d 1343 (1982), the court of appeals held that the trial court improperly granted the employer's
motion to dismiss where the employee alleged that her employee handbook constituted an implied in fact
agreement not to discharge her except for cause. The court noted that questions of fact existed as to whether
the terms and conditions in the manual were a part of her employment contract. Id. at 213, 454 N.E.2d at
1346. Hedrick was cited with approval by the Ohio Supreme court in Mers v. Dispatch Printing Co., 19 Ohio
St. 3d 100, 104, 483 N.E.2d 150, 154, where the court stated that "employee handbooks, company policy,
and oral representations have been recognized in some situations as comprising components or evidence of
the employment contract."
One lower Ohio appeals court has upheld manual provisions relating to discharge of the employee. See
Day v. Good Samaritan Hospital & Health Center, No. CA-8062 (2nd Dist. Ct. App. August 17, 1983)
(available on Ohio App. Dic. on Fiche 83-18-2d) (court held that manual provisions created unilateral contract which obligated the employer to discharge in accordance with manual's provisions).
13116 Cal. App. 3d 330, 171 Cal. Rptr. 917 (1981).
toId. at 329, 171 Cal. Rptr. at 927. See also Cleary v. American Airlines, Inc., I 1l Cal. App. 3d 443, 168
Cal. Rptr. 722 (1980); Drzewiecki v. H & R Block, Inc., 24 Cal. App. 3d 695, 101 Cal. Rptr. 169 (1972).
"'Pugh, 116 Cal. App. 3d at 329, 171 Cal. Rptr. at 927; See also Kochis v. Sears, Roebuck & Co., No
CA-2175 (5th dist Ct. App. 1984) (available in Ohio App. Dec. on fiche 84-2-5d) (Court affirmed jury finding
that employee's at will agreement modified by employer's statement to employee that he could not be fired if
he "did a good job.")
AKRON LAW REVIEW
[Vol. 20:3
action for wrongful termination
upon his discharge subsequent to a dispute
33
with the company union.
Finally, the doctrine of promissory estoppel 3 " can operate to impose a just
cause requirement.'35 In order for the doctrine to modify an otherwise at-will
agreement, the employer must reasonably expect that the employee will rely
on the representation to his or her detriment through action or forbearance.'36
Whether the elements of promissory estoppel are met is a question of fact.'
Although the doctrine is frequently invoked in situations where the
employee leaves previous employment in reliance upon a new employment offer subsequently revoked, 38 it has also been applied in conjunction with the
employment manual. Not only does the manual raise certain employee expectations,'39 but it arguably induces some type of action or forbearance in addition.' ° Promissory estoppel measures the reasonableness of this conduct, "' and
thus offers an alternative to Toussaint "2 and its focus on whether there was
consideration for the manual.' 3
CONCLUSION
Many commentators have proposed abolishing the employment at will
rule through statutory enactment,'" or through novel legal theories inviting
'See generally Pugh, 116 Cal. App. 330, 171 Cal. Rptr. 917 (1981).
"'RESTATEMENT (SECOND) OF CONTRACTS
§ 90(l) (1979) defines promissory estoppel as:
A promise which the promisor should reasonably expect to induce action or forbearance on the part
of the promisee of a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be
limited as justice requires.
"3 Mauk, supra note 3, at 224.
"'Mers v. Dispatch Printing Co., 19 Ohio St. 3d at 105, 483 N.E.2d at 155.
'Id. For a criticism of Mers court's resolution of the factual issues before it in that case, See Time To Collapse Another Citadel, supra note 3, at n. 129.
"'See Mauk, supra note 3, at 224 and cases cited at n. 104. Butsee Frankart v. Jeep Corp., No L.-85-062 (6th
Dist. Ct. App. November 8, 1985) (available on Ohio App. Dec. on Fiche 85-25-6d). In Frankart, a laid off
employee contended that he relied on his employer's promise that if he returned to work, his job would
become permanent in nature, and that as a consequence, he refused employment elsewhere. He returned to
work, and was subsequently discharged. The Court of Appeals upheld the trial court's dismissal, stating that
the allegations at best supported the inference that the employee was hired at will. However, the court's
analysis only begs the question of whether the at will contract should have been modified due to the
representations made by the employer, and whether the employee's actions supported a claim for promissory
estoppel relief.
'"See generally Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579, 292 N.w.2d 880 (1980).
"'See Hedrick v. Center for Comprehensive Alcoholism Treatment 7 Ohio App. 3d 211, 214 454 N.E.2d
1343, 1346-47 (1982) (court held question of fact existed as to whether statements in employee manual were
promulgated "with the design to induce [plaintiff] to remain in her employment, . . . that she reasonably
believed these terms and conditions were binding . . . and that these terms ... induced her to remain
employed...").
"'See supra notes 135-137 and accompanying text.
2408 Mich. 579, 292 N.w.2d 880 (1980).
"'Promissory estoppel serves as a substitute for consideration. Murg & Scharman, supra note I1, at 359;
Time to Collapse Another Citadel, supra note 3, at 418.
'"See generally Bellace, A Right of Fair Dismissal: Enforcing a Statutory Guarantee, 16 U. MICH. J.L. REF.
Winter, 19871
COMMENTS
judicial application.'45 However, practical realities militate against statutory
repeal of the rule,1' while judicially abolishing the rule appears too drastic a
step to take at the present time. Furthermore, the at will rule retains some
usefulness in the workplace since it adequately "responds to the manifold perils
of employment contracts..."I'll
Insofar as the rule is also subject to harsh results, states like Ohio have attempted through judicial and legislative action to balance the often competing
interests of employer and employee. Indeed, the Ohio Supreme' 8 Court has
provided the underpinnings for a modern contractual analysis aimed at defining the true intent of the parties to an at-will agreement. And the Ohio legislature has given the discharged employee on occasion a modicum of
protection.'4 9
However, Ohio courts have failed to recognize that substantial public
policy concerns exist within its Revised Code. Where certain guidelines exist
for determining public policy, courts should take the initiative and imply tort
1 conremedies for its breach. In light of Phung v. Waste Management, Inc., 50
vincing a court that it is the proper forum to take this initiative may be the biggest hurdle to clear.
BRIAN WILSON
207 (1983); Summers, IndividualProtectionAgainst Unjust Dismissal: Time ForA Statute, 62 VA. L. REV.
481 (1976).
14 See ProtectingAt Will Employees, supra note 3 (arguing for implied contractual duty to terminate only in
good faith); Defining Public Policy Torts, supra note 3 (business judgment rule should be applied to at will
dismissals).
1'See supra notes 90-93 and accompanying text.
"'Epstein & Paul, supra note I at 952.
"'Mers v. Dispatch Printing Co., 19 Ohio St. 3d 100, 483 N.E.2d 150 (1985).
"'See, e.g., OHIo REV. CODE ANN. § 2313.18 (Page Supp. 1985) (employer liable for contempt for discharge
employee summoned for jury duty); OHIo REV. CODE ANN. § 4101.17(B) (Page 1980) (persons between ages
of forty to seventy discriminated against without just cause may file a civil action); Oto REV. CODE ANN. §
4123.90 (Page 1980) (employer liable in damages for discharging employee who files compensation claim).
1"23 Ohio St. 3d 100, 491 N.E.2d 1114 (1986).
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