Tuesday, October 8, 2013

Gantt v. Sentry Insurance Case Brief

Gantt v. Sentry Insurance case brief summary

Recommended Outlines for Employment and Labor Law:
Employment Law in a Nutshell
Gilbert Law Summaries: Labor Law

EE is claiming that he was constructively discharged for cooperating with a colleagues sexual harassment claim. He has brought a tort action for wrongful discharge and wants back pay and compensatory damages.
Constructive discharge: a reasonable person would consider the working conditions to be such that they felt compelled to involuntarily resign. The EE does not have to establish that it was the ER’s purpose to get them to resign, only that they created a condition where that was the outcome.
The court held that the ER did not have the right to terminate even an at-will EE for an unlawful reason or purpose that contravenes a fundamental public policy. In this case that was an easy conclusion for the court to reach because there was a criminal statute making it a crime to fail to cooperate with a state investigation of a sexual harassment claim.

The rationale is that public policy is so ingrained into the public’s psyche that to allow ER’s to use the at-will doctrine to escape their obligation to the public is counterproductive, e.g. the public policy against firing EEs for jury duty.
In such cases the EE carries the burden to demonstrate that there is a public policy that covers their situation, and that their wrongful discharge violates that policy.

The concern of the Gantt court and of the ER in that case was that with there being so many public policies, how can the ER effectively be on notice about them all? California’s answer is to require that any public policy exception be anchored in the state constitution or in a statute.

What to look for to determine if a policy applies:
  1. Does the conduct affect society at large? (i.e. does the desired conduct benefit us all, such as jury service or cooperating with criminal investigations?)
  2. The policy must be (i) fundamental (ii) substantial and (iii) well established; these requirements are easily met if there is an applicable statute.
The policy exception varies by jurisdiction; some courts will look beyond statutes to the common law, administrative law and decisions, or ethics standards for a profession.
A problem for plaintiff’s lawyers is that the wrongful discharge tort claim varies from state to state, so you’re not automatically apprised of your policy sources.
A minority of states have no public policy exception and don’t recognize a wrongful discharge claim on the basis of public policy.
Public health and safety has been recognized by courts as an important non-statutory source for public policy exceptions.
Some courts have extended the public policy exception to claims involving an EE’s right to privacy.

Gantt illustrates the most widely accepted formulations of the public policy exception to the at will rule, under which individuals may not be discharged for: (1) refusing to commit unlawful acts (2) exercising statutory rights (3) performing public functions; or (4) reporting an ERs unlawful conduct.
The Sarbanes-Oxley Act exacted in 2002 in response to Enron, Worldcom, etc protects whistleblowers at public companies who report financial wrongdoing.

On the definition and nature of firing “for cause”: see the Gantt case, with letter implying continued employment conditioned on “acceptable performance.” Many courts will insist that ERs judge performance in good faith – ER can’t claim an EE who broke the sales record under-performed.

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