Harless v. First Nat. Bank in Fairmont

Decision Date14 July 1978
Docket NumberNo. CC901,CC901
Citation246 S.E.2d 270,162 W.Va. 116
Parties, 115 L.R.R.M. (BNA) 4380 John C. HARLESS v. FIRST NATIONAL BANK IN FAIRMONT, etc., et al.
CourtWest Virginia Supreme Court

Syllabus by the Court

The rule that an employer has an absolute right to discharge an at will employee must be tempered by the principle that where the employer's motivation for the discharge is to contravene some substantial public policy principle, then the employer may be liable to the employee for damages occasioned by this discharge.

David L. Solomon and S. J. Angotti, Morgantown, for plaintiff.

Herschel Rose, Timothy J. Padden, Rose, Southern & Padden, Fairmont, Herbert G Underwood, Steptoe & Johnson, Clarksburg, for defendants.

MILLER, Justice:

This certified case presents the question of whether there is any occasion in which an employee who is employed at will can recover damages against his employer when he is discharged.

The plaintiff's complaint contained two counts. The first count alleged that his discharge was in retaliation for his efforts to bring to the attention of and require his employer to operate in compliance with the State and Federal consumer credit and protection laws. The second count claimed that the employer's conduct leading up to and surrounding the discharge amounted to intentional, malicious and outrageous conduct which caused the plaintiff severe emotional distress.

The trial court determined that this did not state a cause of action and granted a motion to dismiss on Counts I and II of the complaint and certified its ruling to us under the provisions of W.Va.Code, 58-5-2. 1 We hold that a cause of action is properly stated and reverse the trial court's ruling.

Plaintiff's allegations must be accepted as true on a motion to dismiss and construed most favorably to him. 2 He states he was employed by the defendant, the First National Bank of Fairmont, beginning in 1967. He had no written contract of employment, but asserts that as a result of his diligence and good service for the bank he was rewarded by periodic salary increases and promotions until he became Office Manager of the Consumer Credit Department in 1971. Plaintiff asserts that in order to better perform his services and with the encouragement of the bank, he continued his education in banking matters.

Plaintiff indicates he became aware that the bank, in violation of the State and Federal consumer credit and protection laws, "had intentionally and illegally overcharged customers on prepayment of their installment loans and intentionally did not make proper rebates." He claims he brought these matters to the attention of his superiors, the defendants Wilson and Schulte, who were vice-presidents of the bank.

Plaintiff alleges the defendant Wilson terminated his employment in June, 1975, but that he was reinstated a week later. In September of 1975, plaintiff contacted a member of the Board of Directors of the bank about the illegal practices, and was promised that an investigation would be made and that if illegal practices were found, they would be stopped. Shortly after this, according to the plaintiff, the defendant Wilson ordered employees to dispose of certain bank files that reflected the illegal practices.

On October 1, 1975, plaintiff was demoted from Office Manager of the Consumer Credit Department in what he claims was an effort to embarrass and humiliate him. He was thereafter subjected to threats and harassment by the defendant Wilson. The illegal practices continued.

Plaintiff states that in the early summer of 1976, he retained an attorney who contacted the Board member whom plaintiff had originally seen about the problem. Thereafter, plaintiff furnished a list of approximately a dozen accounts which he claimed were improperly overcharged, so that the bank auditors could investigate the matters.

According to the plaintiff, in October, 1976, outside auditors were at the bank and thereafter some refunds were made to customers. In early November, 1976, the plaintiff and the defendant Wilson were invited to appear before a bank committee which was investigating the matter. At this meeting, plaintiff states a Director acknowledged that illegal practices had been found and that they would be stopped. Plaintiff was then reinstated to his position as Manager of the Consumer Credit Department.

Thereafter, in December, 1976, the defendant Schulte and the bank's auditor began to interview employees about the illegal transactions. On being informed that the investigation was confidential and refunds would be made, plaintiff gave the auditor certain files and informed him that he had retrieved them from wastebaskets. On December 30, 1976, plaintiff was summarily fired by the defendant Schulte with no reason given. However, plaintiff maintains that his discharge was solely in retaliation for his attempts to require the bank to comply with the laws of the United States and the State of West Virginia.

The plaintiff's second count incorporates the foregoing allegations from the first count and adds additional allegations that the defendants' conduct was extreme, malicious and outrageous, causing him to suffer severe emotional distress.

The chief defense asserted was that the plaintiff's employment was for no fixed term and therefore terminable at the will of either party, with or without cause. This undoubtedly is an established rule. Wright v. Standard Ultramarine and Color Co., 141 W.Va. 368, 382, 90 S.E.2d 459, 468 (1955); Adair v. United States, 208 U.S. 161, 28 S.Ct. 277, 52 L.Ed. 436 (1908); See Annot., 62 A.L.R.3d 271 (1975).

However, the general rule does not dispose of the issue in this case. There is a growing trend that recognizes that an employer may subject himself to liability if he fires an employee who is employed at will if the employee can show that the firing was motivated by an intention to contravene some substantial public policy.

Two recent decisions of the Oregon Supreme Court serve to illustrate some of the principles involved. In Nees v. Hocks, 272 Or. 210, 536 P.2d 512 (1975), plaintiff claimed she was fired for performing jury duty. The court, after citing several statutory and constitutional provisions relating to jurors, concluded there was a substantial public policy favoring jury duty and that the plaintiff had a cause of action against her employer.

In Campbell v. Ford Industries, 274 Or. 243, 546 P.2d 141 (1976), the plaintiff sought to rely on the public policy theory when he was fired after exercising his statutory right as a corporate shareholder to examine his employer's books and records. The court refused to sustain his cause of action, holding that the statutory right to examine a corporation's books is not founded on any substantial public policy, but is designed as a protection of the private and proprietary interests of stockholders.

Pennsylvania has suggested it may recognize the doctrine of retaliatory discharge in Geary v. United States Steel Corporation, 456 Pa. 171, 319 A.2d 174 (1974). In speaking of the cases supporting the doctrine, it states:

"It is not necessary to reject the rationale of these decisions in order to defend the result we reach here. In each case where a cause of action was found, the mandates of public policy were clear and compelling; that cannot be said of the instant case." (319 A.2d at 180, n.16)

Geary involved an employee who contended that a pipe designed and manufactured by the defendant employer was unsafe and should not be marketed. When his immediate supervisors took no action, he took his complaint to their superiors. The complaint alleged that although the company ultimately withdrew the product, his firing was in retaliation for his complaints about the safety of the product.

Indiana and Michigan have utilized the doctrine to permit an employee to maintain an action where a claim is made that the firing occurred in retaliation for filing a workmen's compensation claim against the employer. In Sventko v. Kroger Co., 69 Mich.App. 644, 245 N.W.2d 151 (1976), and Frampton v. Central Indiana Gas Co., 260 Ind. 249, 297 N.E.2d 425 (1973), the courts reviewed their state workmen's compensation statutes and concluded their legislatures had expressed a strong public policy that workmen's compensation claims were not to be frustrated.

In Jackson v. Minidoka, 98 Idaho 330, 563 P.2d 54 (1977), the Idaho Supreme Court stated the doctrine in the following fashion, although it declined to apply it under the particular facts of that case:

"As a general exception to the rule allowing either the employer or the employee to terminate the employment relationship without cause, an employee may claim damages for wrongful discharge when the motivation for the firing contravenes public policy." (563 P.2d at 57)

The Arizona Appeals Court also appears to recognize the doctrine, although it was found not applicable upon the facts presented to it in Larsen v. Motor Supply Co., 117 Ariz. 507, 573 P.2d 907 (1977). There, two employees were discharged when they refused to take lie detector tests mandated by the company for all its employees.

The Washington Supreme Court has discussed the doctrine at some length, but determined it was not necessary to decide whether it would adopt the doctrine in Roberts v. Atlantic Richfield Company, 88 Wash.2d 887, 568 P.2d 764 (1977).

Two states have created a broader concept. In Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 (1974), the court stated:

"We hold that a termination by the employer of a contract of employment at will which is motivated by bad faith or malice or based on retaliation is not in the best interest of the economic system or the public good and constitutes a breach of the employment contract." (114 N.H. at 133, 316 A.2d at 551)

In that case, a female employee claimed she was fired because she refused to go out with her foreman. There was evidence that he had...

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