Test #1 – Sample question and answer

Chapter 2 question

Question:

John recently left the employ of Tech Industries in south Arkansas to work for Consolidated Manufacturing in Jonesboro. John made the job switch for a higher salary and the offer of more job security. (Consolidated Manufacturing had a handbook statement as follows: “We believe in job security and stability for our employees, to provide an enriching place to work.”) John’s supervisor, Roger, evaluated John’s performance as superior during John’s first three months at Consolidated.

One morning at work, Roger approached John about a theft of company property. Apparently a co-worker had lied, telling company officials that John had been involved in the theft. (John had neither knowledge of, nor involvement in, the theft.) Based on the co-worker’s statement alone, Roger fired John.

Was John wrongfully discharged? Analyze whether John has a valid claim under Arkansas law, discussing wrongful discharge under both public policy (tort law) and contract principles. Use the following headings for your answer:

A. Employment-at-will

B. Wrongful discharge in violation of public policy (tort law)

C. Wrongful discharge, contract law (express/implied)

Sample Answer:

A. EAW - Regarding the employment relationship in Arkansas, the at-will rule provides that employees (including John in this question) can be fired at any time, without reason or notice. This rule is found in several cases in the textbook, including the quote from Smith v. American Greetings, page 25. Under EAW, unless otherwise agreed between the parties, John can be fired for a good or bad reason, at any time. Applying the rule here, John’s dismissal was legally appropriate, even though the information relied upon by Consolidated was erroneous. Arkansas law does provide for limits on the at-will rule, including tort and contract exceptions to at-will employment.

B. Public Policy -- Was John’s firing in violation of Arkansas public policy?

Applicable Law – In Arkansas, public policy concerns what is right and just and affects the citizens of the state collectively (page 31 of the textbook). Regarding a discharge, public policy has been contravened when the reason alleged to be the basis for a discharge is so repugnant to the general good as to deserve the label “against public policy.” The textbook pages 31-32 states that under public policy there are at least four exceptions to the at‑will doctrine: (1) cases in which the employee is discharged for refusing to violate a criminal statute; (2) cases in which the employee is discharged for exercising a statutory right; (3) cases in which the employee is discharged for complying with a statutory duty; and (4) cases in which employees are discharged in violation of the general public policy of the state.

Analysis – Nothing appears to indicate John was fired in a manner that violates public policy. John’s firing does not appear to involve the public good or general public policy of Arkansas, but only John’s personal interests. He was not discharged for a refusal to violate a criminal statute, for exercising a statutory right, or for complying with a statutory duty, all examples of public policy.

As an example of public policy analysis, Island v. Buena Vista Resort involved an employee fired after she refused sexual advances from her employer. Exchanging sex for workplace consideration (salary) violates a criminal statute dealing with prostitution, money exchanged for sex. Thus, the employee was fired for a refusal to violate a criminal statute, public policy.

Nothing indicates public policy is violated when employees are fired based on erroneous information. To prevail in this lawsuit, John would need to prove Arkansas citizens collectively are affected by his firing. That does not appear to be the case. Primarily, John alone is affected by his discharge.

C. Contract Law -

Applicable Law - All employees work under a contract. The contract is either express or implied. Express contract terms regarding job tenure or cause needed for dismissal could be bargained for and included in any employment contract. If so, these terms override EAW (the textbook, pages 26 and 27). Implied contract terms, based on the parties conduct, could also provide job protection in some states.

Analysis - We do not know whether John had express guarantees regarding job tenure or cause needed for dismissal. If express protections existed in his contract, Consolidated must follow the protections given. Indications of express or implied contract protection include 1) the statement John switched jobs based on the “offer of more job security” and 2) the handbook clause quoted in the question. The quoted handbook statement, however, is ambiguous at best. Arkansas courts require very clear language before finding contract protection. Implied contracts are not recognized regarding employment protection. (See Smith, page 31.) Lynn v. Wal-Mart Stores, textbook pages 27-29, illustrates an Arkansas court rejecting ambiguous contract language (anticipated duration of assignment: 3 years).

John would therefore probably lose regarding a contract argument unless he can point to express contractual language that was not followed. John’s job performance was superior as judged by his supervisor, but performance is only relevant if cause is needed for dismissal.