Jane Wipf Pfeifle, Editor
Lynn, Jackson, Shultz & Lebrun, P.C.

Vol. 12, No. 11
December 2007

POLICY POINTERS

Public policy claims

Jane Pfeifle

We're all protected by the at-will doctrine, but there are a number of ways we can lose that protection, including public policy claims. Review the following ways that you can inadvertently buy yourself a lawsuit. Recognizing the problem is half the battle. We also provide a policy that helps protect you from the ill-conceived actions of supervisors.

The South Dakota Supreme Court first recognized a public policy exception to the employment-at-will doctrine in 1988. A wrongful discharge claim thrives where "an employer's motivation for termination contravenes a clear mandate of public policy. To state a cause of action under this exception, the employee must plead and prove that a substantial public policy may have been violated." The public policy of the state comes from statements in the state constitution, statutes, and judicial decisions.

Refusing to commit criminal or unlawful activity. In 1988, the court recognized an exception to the at-will rule "for refusal to commit an unlawful or criminal act." Since that time, the court has recognized two more public policy exceptions, but the federal district courts have been more active.

Workers' compensation. If employers discourage workers' compensation claims or punish workers who file them, the statutory scheme would be undermined. Employees might avoid getting the compensation they deserve in order to keep their jobs. The legislature has codified that rule, but there have been no reported decisions on it.

Whistleblowers. The supreme court also ruled that employees who are fired in retaliation for reporting criminal or unlawful activity to an outside agency are protected whistleblowers. Workers who expose illegal or unsafe practices should be encouraged. The whistleblowing must be done for the public good and not just the employee's private interests.

FMLA. The federal district court found that employers that retaliate against employees for asserting their rights under the Family and Medical Leave Act (FMLA) violate an important public policy that negates Congress' intent that employees shouldn't have to lose their jobs or health insurance because of serious medical conditions.

Sexual harassment. The federal district court also recognized a Mitchell firefighter's claim that she was fired for complaining about sexual harassment. The federal judge opined that the South Dakota Supreme Court would likely find that termination in violation of the Human Rights Act would be a public policy exception to the at-will rule.

Union activity. Our state constitution provides that the right of persons to work must not be denied because of their membership or nonmembership in a labor union. Terminating employees for engaging in union activity will give them a claim for wrongful discharge.

First Amendment violations. City employees state a claim for violation of their constitutional rights when they are fired in retaliation for speaking out about matters of public interest.

Civic duties. Other areas of state law offer potential avenues of relief for terminated employees. So strong is the public policy protecting employees who serve on juries that employers are subject to criminal liability for violations. Certain agency employees who fail to report suspected abuse, neglect, or exploitation of the developmentally disabled are protected from retaliation. While the statutes requiring the reporting of abuse or neglect of children contain no similar retaliation provision, it seems clear that the courts would protect employees terminated in retaliation for having done so. Similarly, employees who are punished for voting would have a strong public policy argument.

Drafting a policy

As a protection, consider a policy that strictly prohibits supervisors or other management from retaliating against employees who exercise legal rights such as voting, jury duty, making a workers' comp claim, complaining about harassment, or who refuse to commit an illegal act. Make it clear that employees who believe they have been retaliated against should report it, and give them more than one avenue for reporting. Reiterate your desire to follow the law and that supervisors who don't aren't acting with your authority.

Jane Pfeifle is an attorney with Lynn, Jackson, Shultz, & Lebrun P.C., in Rapid City and the editor of South Dakota Employment Law Letter. If you have a question for her column, you can reach her at jpfeifle@lynnjackson.com or (605) 342-2592.

Copyright 2007 M. Lee Smith Publishers LLC

SOUTH DAKOTA EMPLOYMENT LAW LETTER is not intended to provide legal advice or opinions, but rather to provide information about current developments in South Dakota employment law. Questions about individual problems should be addressed to legal counsel.