Whittaker v. Care-More, Inc., CARE-MOR

• Decision Date: 25 June 1981
• Docket Number: CARE-MOR,INC,No. 81-2-II,81-2-II
• Citation: 621 S.W.2d 395
• Parties: Anna P. WHITTAKER and Wanda C. Whittaker, Plaintiffs-Appellants, v.and Standing Stone Health Care Center, Defendants-Appellees. 621 S.W.2d 395, 115 L.R.R.M. (BNA) 3367, 115 L.R.R.M. (BNA) 4599
• Court: Tennessee Court of Appeals

Page 395

621 S.W.2d 395

Anna P. WHITTAKER and Wanda C. Whittaker, Plaintiffs-Appellants, v. CARE-MORE, INC. and Standing Stone Health Care Center Defendants-Appellees.

No. 81-2-II

621 S.W.2d 395, 115 L.R.R.M. (BNA) 3367,

115 L.R.R.M. (BNA) 4599

Court of Appeals of Tennessee, Middle Section.

June 25, 1981 Permission to Appeal Denied by Supreme Court Sept. 14, 1981.

Charles R. Ray, Lenahan, Ray & Miller, Nashville, for plaintiffs-appellants.

Frank P. Pinchak, Chattanooga, for defendants-appellees; Humphreys, Hutcheson & Moseley, Chattanooga, of counsel.

OPINION

CONNER, Judge.

The issues in this case are whether the employee-at-will rule is still in effect in Tennessee and, if so, whether the plaintiffs-appellants ¹ were employees-at-will.

The plaintiffs were discharged from their jobs at the defendants' Monterey nursing home. Next they applied to the Tennessee Department of Employment Security for unemployment benefits. These benefits were granted.

The plaintiffs then filed this action alleging that they were discharged without "good cause" in "breach of an implied contract for an indefinite term." The complaint also alleged a retaliatory discharge. In granting the defendants' motion for summary judgment, the chancellor said:

... the Court finds and holds that the plaintiffs were employees at will and could be terminated with or without cause except for those causes declared to be unlawful by the statutory laws of the State of Tennessee or by the laws of the United States of America. The court does not find that the termination of the employment was prohibited by any of those laws. The plaintiffs rely upon the fact that the defendants' contention was not accepted by the State of Tennessee Department of Employment Security. However, the mere fact that unemployment compensation is allowed for termination of employment without good cause does not otherwise prohibit a discharge without good cause. The plaintiffs also rely upon the language in the employee handbook, but when read in connection with the application for employment, it appears that employment may be terminated by either party at will upon two weeks notice to the other. The plaintiffs accepted two weeks severance pay in lieu of notice in this case.

The plaintiffs appealed.

The plaintiffs cite numerous case authorities in order to mount a frontal assault on the "employee-at-will" rule. The rule is that a contract for employment for an indefinite term is a contract at will and can be terminated by either party at any time without cause. See Combs v. Standard Oil Co., 166 Tenn. 88, 59 S.W.2d 525 (1933); Little v. Federal Container Corp., 61 Tenn.App. 26, 452 S.W.2d 875 (1969); Nelson Trabue v. Professional Management-Automotive, Inc., 589 S.W.2d 661 (Tenn.1979). See also 56 C. J. S. Master & Servant §§ 8 and 31 (1948).

As was long ago stated in Payne v. Western & Atlantic R.R. Co., 81 Tenn. 507 (1884):

All may dismiss their employees at will, be they many or few, for good cause, for no cause or even for cause morally wrong without being thereby guilty of a legal wrong.

Id. at 519. This principle is still viable in Tennessee, except where modified by statute.

We are aware that the doctrine is and has been attacked under both contract and tort theories. We understand that a "retaliatory discharge" exception to the general rule is now recognized in some jurisdictions, based upon concepts of violation of public policy and/or employer "bad faith." See Tameny v. Atlantic Richfield Co., 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330 (1980); Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 (1974); Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251 (1977); Kelsay v. Motorola, Inc., 74 Ill.2d 172, 23, Ill.Dec. 559, 384 N.E.2d 353 (1978); Palmateer v. International Harvester Co., 85 Ill.2d 124, 52 Ill.Dec. 13, 421 N.W.2d 876, 1981. See also Blades, Employment at Will v. Individual Freedom: On Limiting the Abusive Exercise of Employment Power, 67 Colum.L.Rev. 1404 (1967).

Regarding the public policy argument, in Palmateer v. International Harvester Co., supra, the Illinois supreme court said:

By recognizing the tort of retaliatory discharge, Kelsay acknowledged the common law principle that parties to a contract may not incorporate in it rights and obligations which are clearly injurious to the public.

However, the same court acknowledged that the "Achilles heel" of the principle was in the definition of public policy. Due to the vagueness of that concept most courts which have allowed a cause of action for retaliatory discharge have required that the public policy against such discharge be clear and well defined, compelling and in strong opposition to the discharge. See Percival v. General Motors Corp., 400 F.Supp. 1322 (E. D. Mo. 1975), aff'd, 539 F.2d 1126 (8th Cir.1976).

The theory of bad faith is that in any contract of employment there is an implied covenant of good faith and fair dealing and that termination not made in good faith constitutes a breach of contract. See Fortune v. National Cash Register Co., supra. Few courts have accepted this concept.

It is not the province of this court to change the law as plaintiffs assert. That prerogative lies with the supreme court or the legislature. However, based upon our review of this area of the law we are compelled to note that any substantial change in the "employee-at-will" rule should first be microscopically analyzed regarding its effect on the commerce of this state. There must be protection from substantial impairment of the very...