Contract. Under the contract exception, employment may not necessarily be terminable at will if (1) there is a contract, express or implied, (a) for a definite term of employment, or (b) which states that discharge may only be for “just cause” or other specific reasons; or (2) the employee supplies sufficient additional consideration to defeat the at-will presumption in the form of a substantial benefit to his employer or a substantial hardship to the employee.
The employee bears the burden of proving the existence of an employment contract, including providing evidence of specific terms concerning the length of employment or causes for termination. Promises of �permanent� or �lifetime� employment generally will not be enforced. Similarly, computation of an employee’s salary for a specific time period is not evidence of an employment contract for that period. An employer’s admitted custom of discharging employees only for cause or overriding business considerations does not create an implied contract limiting discharge to just cause. In Pennsylvania, contracts have been implied based on employee handbooks or policies only when they state that they are to be legally binding. If an employer reserves a right to make unilateral changes to the handbook and provides a non-exclusive list of offenses which constitute grounds for discharge, the employer will not be bound.
A court recently found that an employee who quit his secure high-paying job in Virginia and sold his house to move to Pittsburgh with his pregnant wife and two-year-old son, had sufficient evidence of an implied contract/adequate additional consideration, for which the court implied a �reasonable period� of employment. However, agreeing to a confidentiality clause, a restrictive covenant or providing the employer the right to retain inventions created on company time have been held not to constitute “additional consideration.”
Some bases for implied contracts recognized in other states, which bases have not yet been recognized in Pennsylvania, include promissory estoppel and a breach of the covenant of good faith and fair dealing.
Public Policy. Even without a contractual exception, employment may not be terminable if the discharge would violate some recognized public policy found in the Pennsylvania Constitution, legislation, an administrative regulation or judicial decision. To come within the public policy exception, the discharge must be one that “strikes at the heart of a citizen’s social rights, duties and responsibilities.” Historically, the courts have held that if there is a specific statutory means for protecting against the violation of public policy in question, there is no action for wrongful discharge. However, a court recently refused to dismiss a plaintiff’s claim for wrongful discharge in which he alleged that the defendant terminated him in retaliation for filing a disability discrimination charge with the Pennsylvania Human Relations Commission. The court found no logical basis for permitting an employee whose employment was terminated in retaliation for filing an unemployment or workers’ compensation claim to pursue a common law wrongful discharge claim after the same relief to an employee who filed a complaint with a different agency was denied; therefore, it denied the employer�s motion to dismiss.
Even if an employee shows a public policy violation, the employer may still discharge the employee if it has a separate, plausible and legitimate reason for doing so.
Some examples of recognized public policy violations include discharge for reporting illegal activities to the Nuclear Regulatory Commission (where there exists a statutory duty to do so), discharge for refusal to lie to federal investigators, discharge in retaliation for filing a workers’ compensation claim or an unemployment compensation claim, discharge for refusal to take a polygraph test, and discharge for participating in jury duty. The Pennsylvania Supreme Court recently held that federal administrative regulations, such as OSHA’s, standing alone, do not comprise the public policy of the Commonwealth of Pennsylvania. Therefore, when a worker was fired after she complained about unsafe working conditions, she could not rely on violations of OSHA standards to support her wrongful discharge and violation of public policy claim.
In a related situation, in addition to wrongful discharge claims, Pennsylvania has begun to recognize an action for fraudulent misrepresentation in job offers. In one case, an applicant, prior to hiring, expressed concern and questioned management about the possibility of a takeover and was assured that a takeover would not occur, when, in fact, a takeover was already in progress. The court found that the company’s concealment of material facts in the face of her questions about a takeover gave her a valid cause of action for fraudulent misrepresentation when she was laid off.
This is a tricky area that should be navigated by employers with great care.
– Cynthia Dixon