A lot of lawyers who trooped into Washington last week for the annual convention of the Association of Trial Lawyers of America spent their time exchanging strategies for collecting hefty damages for clients who have been fired unfairly. More and more states, they heard, are receptive to such suits. "There's not only a straw in the wind here, there's a log," summed up Boston law professor Thomas F. Lambert, Jr.
It's a development that has become the hot topic for labor lawyers and corporate personnel directors. It was the subject of no less than three sessions at the June New York convention of the American Society of Personnel Administration, is on the agenda next week for the American Bar Association meeting in Atlanta, and pops up again in September at the convention of the Federal Bar Association in Louisville. The topic is exciting because it throws out what had seemed to be settled law, and strikes close to the heart of management's prerogatives.
The boss' right to give walking papers to anyone he or she does not like has been chipped away at for decades, of course. Governments must follow due process in firing. Most unionized shops have grievance procedures. Federal laws applying to all companies say a worker cannot be fired for union activities, for religious beliefs, for reasons stemming from race or sex bias. But those rules are written into law, where the conscientious manager can know them and at least try to follow them.
The new development is a ban on firing that a jury decides--after the fact--was simply not just. Not only is that standard so imprecise that even good-hearted bosses may not know just what it means, but if the issue gets to trial most jurors find it easier to identify with the former employe than the executive.
Says Dorothy Pitt, a Louisville lawyer who represents companies in such cases: "Up until the last couple of years, we always thought that, absent statutory restrictions, you could fire for good reason, bad reason or no reason at all. Now it boils down to almost any type of firing can be challenged in one way or another."
Basically, employes who cannot point to a particular law that they can allege their dismissal violates can now fall back on one of three arguments:
* The firing conflicts with public policy. This approach was pioneered in California, where the courts said it was wrong for a union to fire an employe because he refused to lie to an upcoming legislative probe into organized labor. Since then, the approach has been expanded to protect all sorts of whistleblowers--from those who snitch on manufacturers not meeting labeling requirments to those who take off work for jury duty. New York lawyer Peter M. Panken counts 15 states that have followed California in okaying suits based on such claims.
* The firing violated an employment contract. Of course, written employment contracts have always served as bars to preemptory dismissals, but few workers have such contracts. What the courts--here led by Michigan--have begun doing is calling all sorts of other managerial indications evidence of a contract. Does the employe receive a little benefit booklet that says that firings are only for just cause? Does a first-line supervisor say, "Do a job for us, and we'll always have a job for you"? Promises like that can now be called employment contracts, which means there's a path for a rather standard commercial suit if the company does not live up to contract terms.
* The firing just is not fair. This elastic concept--which can be raised in almost any situation--stems from a New Hampshire ruling holding a company liable for firing a woman for refusing the advances of her supervisor. "To remedy injustice, the court found an implied obligation to act in good faith in using the power to terminate," Panken explains.
It is business' ability to absorb legislated curbs on the right to fire--particularly the revolution stemming from the sex discrimination ban in the l964 Civil Rights Act--that has made courts willing to risk imposing new constraints. The new protections for discharged workers also draw from the fact that, beginning with the inculcation of the classroom, "grass roots American society is irreversibly committed to standards of fair play," editor David W. Ewing says in a new book on firing.
The threat of such cases may lead companies to support new laws that would spell out some of the new protections against firing, University of Washington professor Cornelius J. Peck predicts. Not only would statutes remove a lot of uncertainty, but, Peck believes, in return for their support businesses could get some curbs on the most onerous cases. An exemption for small employers, for instance, or a long probation period during which a manager could fire at will, can be hammered out in legislative compromise, but not in a court battle focused on one dismissal.