Missouri law presumes that all employees are employed at will. That means employees or their employer may terminate the employment relationship at any time, with or without cause. Despite that presumption, Missouri law has three judicially created exceptions to employment at will, and employees may not be terminated for any of those reasons (in addition to obviously discriminatory reasons). Terminating an employee for one of the reasons can give rise to a legal claim for damages. Read on to learn more about this type of claim and measures your organization can take to avoid it.
“Liam” worked as a regional legal senior staff attorney in the claims legal division of American Family Mutual Insurance Company’s Kansas City office from July 14, 2003, to August 21, 2013. He was responsible for handling litigation involving American Family’s clients within established corporate guidelines, applicable standards of good-faith behavior, and the Missouri Rules of Professional Responsibility.
In 2009, Liam began expressing concerns regarding increased workloads and file retention to his supervisor. In 2010, American Family closed several offices and transferred its files to Liam’s office, resulting in an increased workload for him and his colleagues. Another American Family office was closed in July 2012, and its files were also transferred to Liam’s office. As a result of the closings, the office was responsible for a territory covering the western half of Missouri and the entire state of Kansas. Around the same time, Liam’s division lost four attorneys and replaced only one.
In 2012, Liam was assigned 85 litigation files, 73 percent of which were litigated in-house. The rest of the files were assigned to outside counsel. Liam again expressed concerns about the increased workload and travel and decreased staffing and resources to his supervisor, suggesting the issues could affect the competent representation of clients. On several occasions before and during 2013, he reported that the number of cases to which he was assigned exceeded a number that was reasonable and proper and affected his ability to adequately represent clients’ interests.
On March 18, 2013, American Family gave Liam a performance improvement plan—the first written discipline he had received during his employment with the company. A few months later, his employment was terminated.
Wrongful Termination Law
Generally, at-will employees may be terminated for any reason or for no reason. A discharged at-will employee has no claim for wrongful discharge. However, despite that general rule, the employment-at-will doctrine is not static. It may be modified directly by or through public policy reflected in the Missouri Constitution, a statute, a regulation promulgated under a statute, or a rule created by a governmental body. Accordingly, the Missouri Supreme Court adopted the public-policy exception to the employment-at-will doctrine:
An at-will employee may not be terminated (1) for refusing to violate the law or any well-established and clear mandate of public policy as expressed in the constitution, statutes, regulations promulgated pursuant to statute, or rules created by a governmental body or (2) for reporting wrongdoing or violations of law to superiors or public authorities.
After the supreme court issued its decision, the Missouri Court of Appeals recognized a third public-policy exception: At-will employees may not be terminated for acting in a manner public policy would encourage. If an employer terminates an employee for any of the three reasons, the employee has a claim for wrongful discharge based on the public-policy exception.
Often called the wrongful discharge doctrine, the public-policy exception to the employment-at-will rule is very narrowly drawn. “Public policy” is a principle of law that holds that no one can lawfully do something that tends to injure the public or is against the public good. Public policy is not found in various personal opinions and whims of judges or courts (which are charged with the interpretation and declaration of established law) regarding what they believe are the demands or interests of the public. Therefore, a wrongful discharge claim must be based on a constitutional provision, statute, regulation based on a statute, or rule promulgated by a governmental body.
Liam filed a lawsuit against American Family alleging wrongful termination in violation of public policy. He alleged that the Missouri Rules of Professional Responsibility governing lawyers—specifically, Rules 4-1.1 and 4-5.4(c)—constituted valid, clearly mandated sources of public policy that serve to further public health, safety, and welfare.
Rule 4-1.1 provides: “A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”
Rule 4-5.4(c) states: “A lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services.”
Liam further alleged that he engaged in protected activity by:
- Exercising professional judgment in the interests of his clients by complaining about the increasing workloads imposed on him by American Family, which he believed compromised his ability to effectively and adequately represent clients (i.e., customers of American Family) and therefore violated Rules 4-1.1 and 4-5.4(c); and
- Acting in a manner encouraged by public policy by asserting his professional independence from American Family, which continued to assign him an excessive number of legal files in an effort to reduce its reliance on outside legal counsel and curtail costs.
Finally, Liam alleged that his protected activity was a contributing factor in the employer’s termination decision.
American Family filed a motion to dismiss, arguing that Liam’s petition failed to state a claim because Rules 4-1.1 and 4-5.4(c) could not support a claim for wrongful termination. After hearing arguments from both parties, the court dismissed the claim, holding that Rules 4-1.1 and 4-5.4(c) were simply too vague to constitute a well-established and clearly mandated public policy required for application of the exception.
The court of appeals affirmed the dismissal, holding that the purpose of the need for a clear mandate of public policy is to clarify the duties imposed on employers and allow them to effectively avoid liability. But when a violation of the proclaimed source of public policy ultimately devolves into a question of professional judgment, employers are left to the whims of both employees and courts on what conduct constitutes a violation.
In short, the rules Liam relied on didn’t address attorney workload, and when the workload becomes so excessive that it affects an attorney’s duty of competence is a matter of professional opinion and judgment. Thus, the rules did not constitute a clear mandate of public policy and could not serve as the basis of Liam’s wrongful termination claim.
Employers should be assured that at-will employment is still the presumption and rule under Missouri law. The judicially created exceptions to at-will employment continue to be construed quite narrowly. Moreover, legislation recently passed by the Missouri Legislature will, if signed by Governor Eric Greitens, codify wrongful discharge law and make asserting a wrongful discharge claim even more difficult for employees.
In the meantime, Missouri employers should continue to be cautious when taking adverse employment actions that arguably may be attributable to employees doing the following:
- Refusing to violate the law or a well-established and clear mandate of public policy;
- Reporting wrongdoing or violations of the law to superiors or public authorities; or
- Acting in a manner public policy would encourage.