Smith v. Atlas Off-Shore Boat Service, Inc.

• Decision Date: 21 August 1981
• Docket Number: No. 80-3573,OFF-SHORE,80-3573
• Parties: 117 L.R.R.M. (BNA) 2414, 62 A.L.R.Fed. 776, 1 Indiv.Empl.Rts.Cas. 132 Jerry SMITH, Plaintiff-Appellant Cross-Appellee, v. ATLASBOAT SERVICE, INC., Defendant-Appellee Cross-Appellant. . Unit A
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1057

653 F.2d 1057

117 L.R.R.M. (BNA) 2414, 62 A.L.R.Fed. 776,

1 Indiv.Empl.Rts.Cas. 132

Jerry SMITH, Plaintiff-Appellant Cross-Appellee, v. ATLAS OFF-SHORE BOAT SERVICE, INC., Defendant-Appellee Cross-Appellant.

No. 80-3573.

United States Court of Appeals, Fifth Circuit.

Unit A

August 21, 1981.

Paul S. Minor, Paul T. Benton, David T. Cobb, Biloxi, Miss., for plaintiff-appellant cross-appellee.

Bryan, Nelson, Allen, Schroder & Backstrom, Vincent J. Castigliola, Jr., Pascagoula, Miss., for defendant-appellee cross-appellant.

Appeals from the United States District Court for the Southern District of Mississippi.

Before RUBIN, RANDALL and TATE, Circuit Judges.

ALVIN B. RUBIN, Circuit Judge.

For the first time we consider the question: does a seaman whose at-will employment is terminated because he filed suit against his employer under the Jones Act, 46 U.S.C. § 688, have an action in admiralty for wrongful discharge? Concluding that an employer may not, with impunity, discharge a seaman in sheer retaliation for the seaman's filing of a personal injury claim, we hold that the victim of this vengeance is entitled to maintain an action under the general maritime law to recover compensatory damages.

I.

Jerry Smith, a seaman employed by Atlas Off-Shore Boat Service, Inc., suffered an ankle injury while working aboard the M/V TROJAN, a vessel engaged in servicing offshore oil rigs. Smith was employed for two-week shifts followed by two weeks of leave time after which he would be called back to work by Atlas's port captain. His injury occurred at the end of a two-week work shift. Six weeks later, although Smith was still suffering some symptoms, he asked his physician to declare him fit for duty so that he could return to work, and the physician did so.

Smith returned to work for Atlas on another vessel and worked a full two-week shift. During his subsequent leave, his attorney notified Atlas that Smith intended to file a personal injury claim. At the end of Smith's leave, the Atlas port captain informed him that, unless he abandoned his personal injury claim, he could not return to work for Atlas. When Smith refused to drop the claim, the port captain terminated his employment.

Thereafter, Smith filed suit against Atlas alleging liability for negligence under the Jones Act and for retaliatory discharge, a claim presumably based on general maritime law. The suit was tried to the court. The judge awarded Smith $2,995, $1,495 for lost wages from the date of his injury to the date he returned to work, plus $1,500, as compensation for his pain and suffering. Determining that Smith had been intentionally and wrongfully discharged by Atlas because of his proposed personal injury suit, the judge awarded him $1,000 in punitive damages, thereby implicitly holding that an action for retaliatory discharge is cognizable in admiralty.

Smith appeals from that judgment, contending that the district court erred by failing to award him lost wages until the date of trial and future lost wages due for alleged permanent partial disability. He also contends that the awards for pain and suffering and punitive damages are inadequate.

Defending the amount of the damage award, Atlas contends on cross-appeal that the award of punitive damages for Smith's discharge must be reversed because there is no maritime cause of action for wrongful discharge, ¹ and, in the alternative that the amount of the punitive damages award is not inadequate. We deal first with the principal issue involved in this case, the viability in admiralty of a cause of action for retaliatory discharge.

II.

In the absence of a contractual provision specifying a definite term or voyage during which a seaman will be employed, the seaman's employment is "terminable at will by either party." Findley v. Red Top Super Markets, Inc., 188 F.2d 834, 837 n.1 (5th Cir.), cert. denied, 342 U.S. 870, 72 S.Ct. 112, 96 L.Ed. 654 (1951). Although a seaman who signs on for a voyage or for a specific term of employment is afforded some protection upon discharge, ² no such protection is available to the seaman whose employment is not for a term but continues only at his employer's will. Finding no maritime jurisprudence addressing the issue whether a seaman whose at-will employment contract is terminated because he brings a personal injury action against his employer may maintain an action for wrongful discharge, we seek guidance in the nonmaritime common law dealing with termination of the at-will employment relationship.

At common law, an employer may discharge his at-will employee "for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong." ³ This unbridled freedom has been relied on to disallow a cause of action based on discharge because of the employee's maintenance of a lawsuit against the employer, Buysse v. Paine, Webber, Jackson & Curtis, Inc., 623 F.2d 1244 (8th Cir. 1980), as well as termination due to the employee's filing of a workman's compensation claim, ⁴ Green v. Amerada-Hess Corp., 612 F.2d 212 (5th Cir.) (applying Mississippi law), cert. denied, --- U.S. ----, 101 S.Ct. 356, 66 L.Ed.2d 216 (1980).

This employer latitude is said to be reinforced by the principle of mutuality of obligations: "if the employee is free to quit at any time, then the employer must be free to dismiss at any time." Summers, supra note 3, at 484-85. ⁵ The mutuality of obligations rationale has both symmetry and logical appeal. It has, however, lost its once almost universal force. ⁶ Its application to the employment relationship has been criticized by commentators who claim that it is based on the false premise that the situation of the employer and employee in today's society is equivalent. ⁷

A few courts, supported by the almost unanimous view of the commentators, ⁸ have refused to adhere to the traditional rule, finding little to recommend its continued application in instances in which the employer's conduct undermines an important public policy. ⁹ Although the supporting policy has, in the majority of these cases been grounded in statute or jurisprudence, ¹⁰ at least one court has recognized a public policy evolved solely from contemporary social and economic developments. ¹¹ Most of the cases recognizing a cause of action based on a discharge that offends public policy have grounded that action in tort, ¹² while a few decisions have relied on an implied contract theory of recovery. ¹³ Whether grounded in tort or contract, the cause of action is based on the notion that the employer's conduct in discharging the employee constitutes an abuse of the employer's absolute right to terminate the employment relationship when the employer utilizes that right to contravene an established public policy.

III.

We find the reasoning of these cases persuasive. The employer's discharge of the at-will seaman-employee, while it is in essence a lawful act, should not be used as a means of effectuating a "purpose ulterior to that for which the right was designed." Blades, supra note 3, at 1424. The employer should not be permitted to use his absolute discharge right to retaliate against a seaman for seeking to recover what is due him or to intimidate the seaman from seeking legal redress. The right to discharge at will should not be allowed to bar the courthouse door. Nor does the struggle affect only the employer and the seaman. To permit the seaman's discharge because he resorts to the courts may result in casting the burden of the employer's reprisal in part on the public in the form of unemployment compensation or social security for the worker or his family.

The recognition of a cause of action in admiralty providing the seaman with relief from a discharge caused by his filing of a claim against the employer is particularly appropriate in light of the admiralty court's protective attitude towards the seaman. ¹⁴ The judiciary's leading role in fashioning controlling rules of maritime law ¹⁵ and in reshaping old doctrine to meet changing conditions ¹⁶ makes the admiralty court peculiarly sensitive to the inequities inherent in the traditional rule. Moreover, this type of cause of action is not without federal precedent. ¹⁷

The maritime employer may discharge the seaman for good cause, ¹⁸ for no cause, or even, in most circumstances, for a morally reprehensible cause. We conclude, however, that a discharge in retaliation for the seaman's exercise of his legal right to file a personal injury action against the employer constitutes a maritime tort.

The commentators suggest that judicial refusal to ameliorate the common law rule is based in part on the difficult factual questions and issues of proof inherent in the claim for retaliatory discharge. ¹⁹ We, therefore, set forth the precepts that guide their resolution. In order to prevail on the retaliatory discharge claim, the seaman must affirmatively establish that the employer's decision was motivated in substantial part ²⁰ by the knowledge that the seaman either intends to file, or has already filed, a personal injury action against the employer. ²¹ The employer may, on the other hand, defeat the seaman's action by demonstrating that the personal injury action was not a substantial motivating factor for the discharge.

The claim for retaliatory discharge may be joined with the seaman's personal injury action under the Jones Act and, like the general maritime law cause of action for unseaworthiness, may be tried to the jury along with the Jones Act claim even in the absence of diversity. ²²

The employer's retaliatory discharge is properly characterized as an intentional tort, entitling the seaman to compensatory damages caused by the abusive firing, including the seaman's expenses of finding new employment, lost earnings while the seaman seeks another position, and lost future earnings if the seaman's new job provides less remuneration than that earned while the seaman was in...