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Liability of a Non-Employer for Wrongful Discharge

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Virginia has always been an at-will employment state, meaning that employers can fire employees for any reason, or for no reason at all, unless of course the employment contract stipulates otherwise. The big exception to at-will employment is the "public policy" exception, whereby an employee fired for reasons that shock Virginia public policy (e.g., race discrimination or resistance to sexual harrassment) may sue for wrongful discharge notwithstanding the at-will rule.

In a decision rendered Nov. 1, in response to a reference from the Fourth Circuit Court of Appeals, the Virginia Supreme Court has expanded this liability further, holding that a NON-employer may be sued for wrongful discharge if he or she was in fact the individual violator of Virginia's public policy.

The suit, filed in federal court by a woman who claimed to have been both the victim of gender discrimination in violation of Title VII of the Civil Rights Act of 1964, and also to have been wrongfully discharged because she would not yield to her supervisor's repeated sexual advances in violation of Virginia public policy. The suit was filed against the woman's supervisor, Dr. Stephen Grubb, who was the owner of the Virginia Limited Liability Corporation that employed her. The District court dismissed the wrongful discharge suit against Dr. Grubb on the grounds that he was not plaintiff's employer. On appeal, the Fourth Circuit referred to the Virginia Supreme Court the question whether a suit for wrongful discharge could be filed against a non-employer.

By a 4-3 decision, the Court answered in the affirmative, ruling that if a non-employer was in fact the violator of public policy he can be sued for wrongful discharge. The majority rejected Grubb's argument that discharge can be performed only by an employer, and therefore that only said employer can be liable for wrongful discharge. The majority emphasized the need to deter wrongful discharge, which need would not be accomplished in cases such as this one without the liability of the "fellow employee." The upshot, of course, is that the plaintiff can pursue the defendant's personal assets, not merely the assets of the corporation.

Noteworthy, however, was the vibrant dissent by Chief Justice Kinser. The Chief Justice emphasized the logical impossibility of a non-employer firing an employee. Though the supervisor's behavior was wrongful, it was NOT in violation of his duty not to discharge an employee for reasons contrary to public policy. That duty can only be violated by an employer, and since breach of duty (not wrongfulness) is necessary for tort liability, the supervisor cannot be liable in tort.

In this very interesting decision, therefore, the majority seems to have waived the need for breach of duty, in favor of wrongfulness, for tort liability.

Angela VanBUREN v. Stephen A. GRUBB. Docket No. 120348.

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It is always amusing to see the twists and turns in the logic of tort law. Professors at law schools argue that without the tort policemen, the world would run wild with negligence. But those same professors argue that global behavior is not affected by tort law or the perception of tort law. To wit: the claim there is no such thing as defensive medicine as a response to fifty years of aggressive and expansive tort liability to the medical profession.

I can understand the logic in this case. It is a kind of reverse imputed negligence, or vicarious liability theory. A supervisor for a corporation is demanding unwanted sexual favors from an employee of the same corporation. Said employee is fired without good cause. Doesn't that set of circumstances create a series of questions of fact? Well yes it does. Unless we are going to rely on some old fashioned model of tort law like duty and proximate cause. How 19th Century of us!

One would think the wronged employee would have all kinds of potential actions against the supervisor: assault, battery, tortious interference with a business contract, maybe even defamation, inter alia. Maybe the facts aren't there to prove her case. But then, how is she going to prove the wrongful discharge case with the same set of facts?

All this is interesting. And it seems a small matter in the global view of things. However, one must question what the cumulative result is for "small matters." Often they are counter productive. Clearly, it is in the interest of a corporation to deal with "sexual harassers" if for no other reason, they are a potential threat of lawsuit, not to mention the negative aspects on morale. But it is also in the interest of the corporation not to hire people who might file EEOC complaints, sexual harassment complaints and the like.

The intent of the Americans with Disabilities Act was to ensure the rights of the disabled. In the end, it meant fewer disabled were hired than before the act. The cost of revamping the work place was too great and the potential for a long series of litigation was too much for some companies. So they don't hire them in the first place.

I have heard anecdotal evidence of the same with maternal leave, breast feeding requirements and the like in Europe. The bottom line: less women of child bearing age get hired. It is just too much trouble to deal with them, should they become pregnant.

Of course, we should not mention that too much regulation guaranteeing rights defined by the state might have counterproductive outcomes. That could be construed as being way out of touch, severely politically incorrect and maybe even racist and many other kinds of bad mental conditions. So I won't mention it.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.