Raymond L. Hogge, Jr., Esq.(1)
Copyright 1997
INTRODUCTION
The risks of doing business have been steadily increasing, and
employment-related risks are no exception. In recent years there has been an
astounding increase in employment-related claims, as employees are granted new
rights under statutes such as the Americans with Disabilities Act and the
Virginia Human Rights Act. With this increase in claims, employment-related risk
management has taken on a new importance to employers of all sizes.
Until recent years, small employers have felt somewhat insulated from the risk
of claims alleging employment discrimination. The major federal statutes
prohibiting employment discrimination do not apply to employers having fewer
than fifteen employees, and state law claims until recently were not seen as
imposing a significant level of risk. The employment-related risks to all
employers in Virginia, however, increased substantially in 1985 when the
Virginia Supreme Court recognized the tort of "discharge in violation of
public policy," sometimes called simply "wrongful discharge."(2)
This tort can be asserted against all employers, regardless of size, and against
individuals participating in the termination. Since this tort was recognized, it
has been asserted with increasing frequency, and aggrieved employees have
attempted with considerable success to expand the scope of its coverage until,
on October 31, 1997, the availability of such claims was dramatically restricted
by the Virginia Supreme Court's decision in Doss v. JAMCO, Inc.
Consideration of such claims, both actual and potential, must be part of the
overall risk management efforts of all Virginia employers. Counsel for Virginia
employers should advise their clients of these risks in all situations where an
employee may be terminated, and should advise every business on proactive
measures the client can take to minimize the risks associated with such claims.
This article will present an overview of Virginia wrongful discharge claims, to
assist Virginia employers and counsel.(3)
THE NATURE AND ORIGIN OF WRONGFUL DISCHARGE CLAIMS IN VIRGINIA
The Bowman Case
Virginia wrongful discharge claims are often called "Bowman"
claims, referring to the seminal wrongful discharge case in Virginia, Bowman
v. State Bank of Keysville(4), decided in
1985. In Bowman the plaintiff, Betty Bowman, was employed as a bookkeeper
for the State Bank of Keysville and owned common stock in the bank. The bank,
after negotiations with NB Corporation, entered into an agreement with NB under
which the bank would be merged into NB and the bank's common stock would be
converted into NB common stock. In preparation for a special meeting of
shareholders called by the bank for the purpose of approving the merger, the
bank mailed proxy statements to each of its shareholders.
Betty Bowman opposed the merger, claiming that the proxy statements were false and misleading, violated federal securities laws, and violated state corporations law. The bank's directors named as defendants in Bowman were in favor of the merger, knew that the vote on the merger would be close, and knew of Bowman's opposition to it. The president of the bank told Bowman that her voting against the merger would have "a definite adverse effect on her job," and that she would be fired if she voted against the merger and the merger was voted down.
Bowman submitted her proxy card approving the merger. However, two days after the special meeting, she wrote a letter to the bank's president which withdrew her approval of the merger and alleged that her proxy was invalid because it was obtained illegally and under duress. She advised the bank that the votes favoring the merger were insufficient. The board of directors, following receipt of the letter, voted to abandon the merger. According to Bowman, they did so because they feared discovery of their illegal conduct involving the proxies. A few days later, a majority of the board voted to discharge Betty Bowman.
Bowman filed suit against the bank, and against certain directors of the bank individually (including the bank's president), seeking compensatory and punitive damages for wrongful discharge. She alleged her discharge was wrongful because she was discharged solely in retaliation for her proper exercise of her rights as a stockholder, a reason which was unrelated to her job performance, and because it was part of a scheme by which the defendants sought to influence the exercise of her protected shareholder rights by threatening her employment. The defendants filed a demurrer, arguing that Bowman was employed on an at-will basis and could be discharged at any time, after reasonable notice, for any reason or for no reason at all.
The trial court overruled the demurrer, and the Virginia Supreme Court affirmed that decision. The Virginia Supreme Court explained that it continued to adhere to the employment-at-will doctrine, but that the rule is not absolute. One exception to the rule exists where the employee claims to have been discharged "in violation of an established public policy." The Court held that exception applied in the case of Betty Bowman:
In the present case, the retaliatory discharges were based on violations of public policy by the defendants. Code § 13.1-32 conferred on these plaintiffs as stockholders the right to one vote, for each outstanding share of stock held, on each corporate matter submitted to a vote at a meeting of the stockholders. This statutory provision contemplates that the right to vote shall be exercised free of duress and intimidation imposed on individual stockholders by corporate management. In order for the goal of the statute to be realized and the public policy fulfilled, the shareholder must be able to exercise this right without fear of reprisal from corporate management which happens also to be the employer. Because the right conferred by statute is in furtherance of established public policy, the employer may not lawfully use the threat of discharge of an at-will employee as a device to control the otherwise unfettered discretion of a shareholder to vote freely his or her stock in the corporation.(5)
Thus, ruled the Court, Bowman had stated a cause of action in tort against the bank for wrongful discharge. The Court ruled that the named directors could likewise be sued personally for that same cause of action.
Bowman Applies To Violations of Public Policies But Not To Violations of Private Rights
In the 1987 case of Miller v. SEVAMP, Inc.,(6) the Virginia Supreme Court placed significant restrictions upon the applicability of Bowman. In Miller, the plaintiff, Kaye Miller, was an employee of SEVAMP who appeared as a witness in an internal grievance proceeding instituted by a fellow employee. Two weeks later, Miller was fired. She sued SEVAMP, claiming she was wrongfully discharged in retaliation for appearing as a witness in the grievance proceeding. The rights she claimed were violated were rights she alleged were given to all SEVAMP employees in the SEVAMP "Personnel and Administrative Procedures" manual to file grievances and to testify freely before grievance review panels. The Virginia Supreme Court, on appeal, made several significant pronouncements concerning the cause of action it had recognized in Bowman.
First, the Court clarified its ruling in Bowman, and explained that Betty Bowman had a wrongful discharge cause of action because "the employer had misused its freedom to terminate the services of an at-will employee in order to subvert a right guaranteed to stockholders by statute."(7) This began an ongoing debate as to which statutes support a Bowman claim.
Second, the Court explained that the Bowman decision did not recognize a generalized cause of action for the tort of "retaliatory discharge," and that such a cause of action was not recognized by the common law of Virginia.
Third, the Court explained that the rights which, if violated, would support a Bowman claim are limited to those which violate public policies, and that discharges violating private rights would not support such a claim:
Declining to follow the sweeping adoption of [a generalized cause of action for retaliatory discharge] in other jurisdictions, Bowman recognized an exception to the employment-at-will doctrine limited to discharges which violate public(8) policy, that is, the policy underlying existing laws designed to protect the property rights, personal freedoms, health, safety, or welfare of the people in general. .... The exception we recognized was not so broad as to make actionable those discharges of at-will employees which violate only private rights or interests.(9)
The Court suggested that examples of private rights, the protection of which should be left to the General Assembly, include the rights of employees filing workers' compensation claims to be free from acts of retaliation by their employer,(10) the rights of employees filing safety or health complaints to be free from acts of retaliation by their employer,(11) and the rights of persons with disabilities to be free from employment discrimination under the Virginia Code.(12)
Applying these principles to the claim of Kaye Miller, the Court ruled that Miller could not assert a Bowman claim against SEVAMP, since the alleged violations were of private rights rather than public policies. The Court explained that the retaliatory discharge, if proven, "would impinge only upon private rights established by the employer's internal regulations. It would have no impact upon any public policy established by existing laws for the protection of the public generally."(13)
BOWMAN CLAIMS BASED UPON THE VIRGINIA HUMAN RIGHTS ACT
The Virginia Human Rights Act
The Virginia Human Rights Act,(14) enacted in 1987, provides in pertinent part:
Conduct which violates Virginia or federal statute or regulation governing discrimination or Title 7 of the Civil Rights Act of 1964 as amended or the Fair Labor Standards Act on the basis of race, color, religion, national origin, sex, age, marital status or disability shall be an "unlawful discriminatory practice" for the purposes of this chapter.
Until the statute was amended in May of 1995, it also provided:
Nothing in this chapter creates, nor shall it be construed to create, an independent or private cause of action to enforce its provisions. Nor shall the policies or provisions of this chapter be construed to allow tort actions to be instituted instead of or in addition to the current statutory actions for unlawful discrimination.(15)
Can the Virginia Human Rights Act serve as a basis for a Bowman claim? That question was answered, temporarily, by the Lockhart case.
The Lockhart Case (Race Discrimination and Sexual Harassment)
In Lockhart v. Commonwealth Education Systems Corp.,(16) the Virginia Supreme Court considered whether a Bowman claim could be based on race discrimination in violation of the Virginia Human Rights Act. In the companion case of Wright v. Donnelly & Company,(17) the Court considered the same question regarding a sexual harassment claim. The Court answered both questions in the affirmative:
We hold that Ms. Lockhart and Ms. Wright pled viable causes of action. In Bowman, we recognized the plaintiff's rights to bring actions for wrongful discharge based upon violations of Virginia's public policy that a stockholder should be permitted to exercise the right to vote stock free of duress and intimidation from corporate management. Here, however, we are concerned with rights of even greater importance, the personal freedom to pursue employment free of discrimination based upon race or gender. Indeed, there are few, if any, greater restrictions on personal freedoms than an employee can suffer than to be terminated because of discrimination based upon race or gender.
The General Assembly has declared this Commonwealth's strong public policy against employment discrimination based upon race or gender [in the Virginia Rights Act, Virginia Code section 2.1-715].(18)
As to the provisions of the Virginia Human Rights Act declaring that the Act did not create a private cause of action, the Court stated:
We recognize that the Virginia Human Rights Act does not create any new causes of action. Code § 2.1-725. Here, we do not rely upon the Virginia Human Rights Act to create new causes of action. Rather, we rely solely on the narrow exception that we recognized in 1985 in Bowman, decided two years before the enactment of the Virginia Human Rights Act.(19)
Thus, the Court apparently relied upon the fact that the Bowman cause of action, in general, was "created" prior to the enactment of the VHRA. The Court did not explain how it could reconcile its decision with the express provisions of the Act that "the policies or provisions of this chapter [shall not be] construed to allow tort actions to be instituted instead of or in addition to the current statutory actions for unlawful discrimination," and Justice Compton, along with Chief Justice Carrico and Justice Stephenson, dissented on the grounds that the Court's decision was in conflict with the statute.
Since Lockhart, Bowman claims based upon the Virginia Human Rights Act (as opposed to some other statute) sometimes have been called "Lockhart claims." That distinction, as we will see, is significant after the Doss decision (discussed below).
Age Discrimination
Although Lockhart addressed only claims of race discrimination and sexual harassment, later cases have recognized other types of claims as falling within Lockhart. Age discrimination specifically was recognized by the Virginia Supreme Court as a cognizable Lockhart claim in its March 15, 1996 decision in Clark v. Manheim Services Corp.(20)
Disability Discrimination
Judging by the explosion of claims under the Americans with Disabilities Act, the Virginia Human Rights Act's prohibition against disability discrimination is a potentially fertile source of Bowman claims, and at least one circuit court has recognized such a Bowman claim. In Litten v. Smith(21), the Fauquier County Circuit Court stated that "it would be incongruous for a trial court to conclude that the safeguards as to age or disability would be treated differently than those of race or gender" (referring to Lockhart).
Pregnancy Discrimination
Does discharge due to pregnancy give rise to a Bowman claim? According to the Twenty-First Judicial Circuit (Henry County, Patrick County, City of Martinsville), it does not. In its 1995 letter opinion in Spencer v. Tultex Corp.(22) and Riddle v. Tultex Corp.(23), that court sustained a demurrer to a Bowman claim based on pregnancy discrimination. The court explained, "The Court in Bowman and Lockhart established narrow exceptions to the employment-at will doctrine, limited to discharges that violate public policy as set forth in Virginia statutes. As the Virginia statute in question, §2.1-715, does not specifically enumerate pregnancy as a protected status, to the extent [the motion for judgment alleges] discrimination on the basis of pregnancy, the demurrer is sustained."(24) The Circuit Court for the City of Roanoke reached a similar conclusion in its December 19, 1995 decision in Bailey v. Scott Gallaher, Inc..(25)
However, in its December 11, 1995 decision in Smith v. Cinebar Productions, Inc.,(26) the Newport News Circuit Court recognized a Bowman claim based on pregnancy discrimination. It stated:
This Court finds that a female fired on account of pregnancy has a state law tort claim for wrongful discharge just as the Lockhart plaintiff had a state cause of action against her employer for sex discrimination in employment. The position of the defendants that the Commonwealth would not include pregnancy discrimination in its public policy against sex discrimination ignores the historical interest of the Commonwealth in pregnancy.
Bailey v. Scott-Gallaher, Inc.
On January 10, 1997, the Virginia Supreme Court issued its ruling in Bailey v. Scott-Gallaher, Inc. In Bailey, a pregnant employee requested leave ordered by her doctor, and the employer granted that leave request. After she gave birth and her doctor released her to return to work, the employer discharged her. According to the employee, the reasons given by the employer were that "she was no longer dependable since she had delivered a child; [her] place was at home with her child; babies get sick sometimes and [she] would have to miss work to care for her child; and the company needed someone more dependable."
In a four to three decision, the Virginia Supreme Court ruled that the employee's discharge constituted sex discrimination violating the public policy reflected in the Virginia Human Rights Act, which prohibited employment discrimination on the basis of sex (but did not expressly prohibit employment discrimination on the basis of pregnancy). According to the majority of the Court, "Bailey's factual allegations, if proven true, would support a reasonable inference by the finder of fact that [the company] terminated Bailey solely because of her status as a woman who is also a working mother." Justice Compton, Chief Justice Carrico, and Justice Stephenson dissented.
Although Bailey has been widely reported as being a pregnancy discrimination case, the case does not appear to involve pregnancy discrimination within the meaning of the federal Pregnancy Discrimination Act (an Amendment to Title VII) -- the requested pregnancy leave was granted by the employer, and the employee had been medically certified as fit to return to work at the time she was fired. Rather, the case involved discrimination based upon the employee's status as a parent (i.e, "a working mother"). The net effect of Bailey may be that, for purposes of Bowman and Lockhart claims and for purposes of Virginia Human Rights Act statutory claims, the scope of pregnancy discrimination has been expanded far beyond its meaning under Title VII, and will include discrimination based upon the employee's parental obligations. While Bailey involved a female employee, there appears to be no reason why the same logic would not apply to a male employee "who is also a working [father]." In fact, treating employee-fathers less favorably than employee-mothers probably would violate both Title VII and the VHRA, and itself could support a Bowman claim by a discharged father. The long term consequences of Bailey, however, are uncertain, because Bailey involved conduct prior to the 1995 amendments to the Virginia Human Rights Act, a.k.a. the "Lockhart Amendments."
THE "LOCKHART AMENDMENTS" AND THEIR AFTERMATH
The 1995 Amendments to the Virginia Human Rights Act
In response to Lockhart, in May of 1995 the Virginia General Assembly passed what has been come to be known as "the Lockhart Amendments" to the provisions of the VHRA which had previously disavowed creation of an independent cause of action by the statute. As amended, the VHRA provides in subsection A:
Nothing in this chapter creates, nor shall it be construed to create, an independent or private cause of action to enforce its provisions, except as specifically provided in subsections B and C of this section.(27)
Subsection B provides:
No employer employing more than five but less than fifteen persons shall discharge any such employee on the basis of race, color, religion, national origin or sex, or of age if the employee is forty years or older.
Subsection C provides, in pertinent part:
The employee may bring an action in a general district or circuit court having jurisdiction over the employer who allegedly discharged the employee in violation of this section.
Subsection C then defines the remedies available to an employee in a VHRA suit. Those remedies are limited to back pay, usually with a twelve month cap, interest, and attorney's fees of up to twenty-five percent of the amount recovered. The Lockhart Amendments specifically forbid the court from awarding compensatory damages, punitive damages, or reinstatement.
Subsection D, which was clearly addressed to the Lockhart decision, provides in pertinent part as follows:
Causes of action based upon the public policies reflected in this chapter shall be exclusively limited to those actions, procedures and remedies, if any, afforded by applicable federal or state civil rights statutes or local ordinances....
The Effect of the Amendments
The legislature's intent to limit Lockhart seemed apparent from these amendments, which became effective July 1, 1995. Nevertheless, it remained to be seen whether the VHRA amendments would be interpreted as preempting Bowman claims based upon the policies involving the Virginia Human Rights Act.
Arguably, all Lockhart claims remained viable on the theory, suggested in Lockhart, that a Bowman cause of action predated the VHRA and is independent of it. The federal court in Alexandria, in fact, reached precisely that conclusion in its November 7, 1995 decision in Ecklund v. Ruisz Technology. Ltd.. According to Judge Brinkema:
Although the Virginia Legislature may have recently tried to overrule Lockhart by stating that causes of action to enforce the public polices reflected in the Virginia Human Rights Act are exclusively limited to those provided by the statute, the new statute merely restates the original statute using slightly different language. The Virginia Supreme Court carefully avoided the restrictions in the old statute in relying instead on its own precedent in Bowman. Because Bowman predates the Va. H.R.A., this line of cases is clearly unaffected by the revised statute.(28) The same conclusion was reached by the Richmond Circuit Court in its May 20, 1996 decision in Lundy v. Cole Vision Corp.(29)
It also was arguable that the amendments applied only to the six-to fourteen-employee "notch," and that Bowman claims like those asserted in Lockhart would remain viable outside the notch. At least one court, in view of the Lockhart Amendments, followed that lead. In Hunley v. First Union Bank of Virginia,(30) the federal court in Roanoke held that neither a Bowman claim nor a VHRA claim for age discrimination could be asserted by an employee, since the employer employed more than fifteen employees and therefore fell outside the VHRA six to fourteen employee notch.
Two Virginia Supreme Court decisions since the Lockhart Amendments seemed to signal the Court's continued recognition of Lockhart claims. In its January 12, 1996 decision in Lawrence Chrysler Plymouth Corp. v. Brooks(31) and in its March 15, 1996 decision in Clark v. Manheim Services Corp.,(32) the Court cited Lockhart as authority for its decision. At least one circuit court -- the York County Circuit Court in Sanders v Matthews(33) -- has cited Clark as indicating the continued viability of Lockhart. In July of 1996, the federal court in Harrisonburg in Roberts v. Wal-Mart Stores, Inc. opined that Brooks suggested the Virginia Supreme Court did not view the VHRA amendments as overruling Lockhart. Nevertheless, the position of the Virginia Supreme Court on this issue remained an open question until Doss (discussed below), with courts reaching different conclusions and issuing conflicting opinions.
Retroactivity of the Lockhart Amendments
Assuming the Lockhart Amendments did effectively overrule Lockhart, another important issue is whether the Lockhart Amendments may be applied retroactively. In Litten v. Smith(34), the Fauquier County Circuit Court held that they may not, and a similar conclusion was reached by the Richmond Circuit Court on August 1, 1996 in Wilson v. Continental Cablevision of Richmond, Inc.(35) Most courts which have considered the issue have agreed.
DOSS V. JAMCO, INC.
The Doss Decision
On October 31, 1997, the Virginia Supreme Court issued its decision in Doss v. JAMCO, Inc. While some commentators have heralded the decision as the death-knell of wrongful discharge in Virginia, that conclusion is probably unwarranted. While Doss probably spells the end of Lockhart claims, Bowman claims based upon statutes other than the Virginia Human Rights Act likely will remain viable.
In Doss, Laura L. Doss sued her former employer, JAMCO, Inc., for alleged pregnancy discrimination. The suit was filed in federal court, which certified the following certified question to the Virginia Supreme Court:
Does Va. Code § 2.1-725(D) [of the Virginia Human Rights Act] prohibit a common law cause of action based upon the public policies reflected in the Virginia Human Rights Act, Va. Code § 2.1-714 et seq.?
The Virginia Supreme Court, in a 7-0 decision, answered the certified question in the affirmative. The Court ruled that the General Assembly, by passing the Lockhart Amendments, expressed a clear intention to abrogate the common law Lockhart cause of action for wrongful discharge based upon the Virginia Human Rights Act.
The Effect of Doss
It is safe to say that Lockhart claims are now a thing of the past (provided, of course, they are based upon alleged wrongful discharge occurring prior to the Lockhart Amendments). But does Doss spell the death-knell for all wrongful discharge claims based upon violation of public policy? In the opinion of this author, it does not, because Bowman claims based upon anything other than the Virginia Human Rights Act probably will remain available to discharged employees.
Laura Doss based her wrongful discharge claim "upon the public policy of Virginia as embodied in the Virginia Human Rights Act and 'as expressed in Title VII of the Civil Rights Act of 1964 ... and elsewhere.' " The Virginia Supreme Court, however, expressly limited its holding to "the public policies reflected in the Virginia Human Rights Act," adding:
[W]e express no opinion concerning the public policy of Virginia as it might be articulated in sources other than the Virginia Human Rights Act.
Other portions of the Court's written opinion similarly express the Court's intention to limit its holding to Lockhart claims, i.e, Bowman claims based upon the Virginia Human Rights Act. Accordingly, it is difficult to read the Court's decision as suggesting that wrongful discharge claims based upon other articulations of public policy, i.e., Non-VHRA Bowman claims, are affected by the ruling.
BOWMAN CLAIMS UNAFFECTED BY DOSS
Because Bowman claims other than Lockhart claims are unlikely to be affected by Doss, it is important to consider the potential grounds for post-Doss Bowman claims. Such claims probably will be asserted by discharged employees with increasing frequency.
Return to Bowman
What other grounds for liability may exist for a Bowman claim? The Bowman decision identified a few. According to Bowman, discharge of an employee for the employee refusing to ask to be excused from jury duty would support a Bowman claim. A Bowman claim would be available to an employee who is discharged for refusal to perform an illegal act. A Bowman claim would likewise be available to an employee who is discharged in retaliation for insisting the employer comply with state or federal laws relating to food labeling(36) or consumer credit protection.(37)
Virginia Workers' Compensation Act
In Kerns v. Shirley Well Drilling,(38) the Frederick County Circuit Court suggested that a Bowman claim could be established if an employee proved he was discharged in retaliation for filing a workers' compensation claim for a work-related injury. The public policy supporting such a Bowman claim was articulated in the Virginia Workers' Compensation Act at Virginia Code section 65.1-40.1 (now Virginia Code section 65.2-308), which prohibited discharge of an employee "solely" because he filed a workers' compensation claim.
Virginia Unemployment Compensation Act
In 1990, the Richmond Circuit Court held that discharge in retaliation for seeking unemployment compensation under the Virginia Unemployment Compensation Act would give rise to a Bowman claim. In Roland v. Bon Air Cleaners, Inc.,(39) Linda Roland filed a V.E.C. claim for partial unemployment compensation benefits after Bon Air Cleaners reduced her workload. Bon Air Cleaners then reduced her workload to nothing, but several days before the V.E.C. hearing rehired her. On the date of the V.E.C. hearing, however, Bon Air Cleaners fired her, allegedly in retaliation for her filing an unemployment compensation claim. The Richmond Circuit Court held that Roland's allegation, if proven, would constitute a discharge in violation of the statutorily guaranteed rights of unemployed or underemployed workers to seek benefits under the Virginia Unemployment Compensation Act. These were not mere private rights granted by an employer, according to the court, and therefore would support a Bowman claim.
The Virginia Payment of Wage Law
The Fairfax Circuit Court in its 1990 decision in Millsap v. Synon, Inc.(40) recognized a Bowman claim based upon the Virginia Payment of Wage Law, Virginia Code section 40.1-29. In Millsap, the employee claimed the employer was routinely late in paying sales commissions. The employee filed a V.E.C. wage claim, and was terminated. This, if true, was held to be actionable under Bowman.
The Virginians with Disabilities Act
The Virginians with Disabilities Act,(41) prohibits discrimination against an otherwise qualified person with a disability solely because of their disability. Could it serve as the basis for a Bowman claim for disability-related discharge?
In 1994, the federal court in Richmond said no. In Mannell v. American Tobacco Co.,(42) an employee brought an action against her employer under the Americans With Disabilities Act and ERISA, alleging her employer discriminated against her on the basis of a disability, namely Chronic Fatigue Immune Deficiency Syndrome. She also asserted a Bowman claim, relying upon the Virginians with Disabilities Act. The court held that the VDA could not support a Bowman claim, because the VDA provided that "the relief available for violations of this chapter shall be limited to the relief set forth in [Virginia Code section 51.5-46]," the private remedies section of the VDA. The court rejected the plaintiff's argument that Lockhart, by analogy, suggested the VDA would support a Bowman claim. The Court noted that the VDA, unlike the VHRA, did authorize a private cause of action under the statute. In 1996, a similar conclusion was reached by the federal court in Charlottesville in Shiflett v. GE FANUC Automation.(43)
In Bradick v. Grumman Data Systems Corp.,(44) however, the Virginia Supreme Court held otherwise. In Bradick, a federal court certified the following question to the Virginia Supreme Court:
Does the common law of Virginia provide a wrongful discharge remedy to an employee of an employer covered by the [federal] Rehabilitation Act of 1973 ..., where the employee is discharged on account of his disability or the employer's perception of his disability?
The Virginia Supreme Court answered the question in the affirmative. The Court explained:
We have never before considered whether the narrow exception recognized in Bowman permits a cause of action for unlawful discharge from at-will employment based upon a disability. However, it is not disputed that both the [Virginia Human Rights Act] and the Virginians with Disabilities Act ... contain clear expressions of Virginia's public policy opposing discrimination against disabled persons.
Accordingly, the Court ruled:
[B]ased on the public policy expressed in the VDA and the VHRA at the time of Grumman data's alleged act of discrimination, the common law of Virginia provides a wrongful discharge remedy to an employee ... of an employer covered by the federal Rehabilitation Act of 1973 where the employee is discharged on account of his disability or the employer's perception of his disability under the narrow exception recognized in Bowman.
Doss appears to prevent Bowman claims such as those asserted in Bradick from being asserted, to the extent such claims are based upon the Virginia Human Rights Act. On the other hand, nothing in Doss suggests that conclusion should be applied to Bowman claims based upon the Virginians with Disabilities Act.
The Virginia Fair Employment Contracting Act
One of the newest types of Bowman claims was recognized by the Richmond Circuit Court on August 1, 1996 in Wilson v. Continental Cablevision of Richmond, Inc. There, the plaintiffs were former employees of a government contractor who were terminated by the contractor. They asserted a Bowman claim based upon the Virginia Fair Employment Contracting Act,(45) which prohibits discrimination on the basis of race, color, religion, sex, or national origin by the Commonwealth, its agencies, and government contractors. The circuit court overruled the defendant's demurrer to that claim.
Can Federal Statutes Support a Bowman Claim?
The Virginia Supreme Court, in its January 12, 1996 decision in Lawrence Chrysler Plymouth Corp. v. Brooks,(46) provided guidance in regard to what claims fall within Bowman and what claims do not:
Brooks contends that even though he is an employee at-will, Lawrence Chrysler wrongfully discharged him in violation of Virginia's public policy and that "the public policy of Virginia need not be found in an express statutory command." We disagree.
Unlike the plaintiffs in Bowman and Lockhart, Brooks does not have a cause of action for wrongful discharge because he is unable to identify any Virginia statute establishing a public policy that Lawrence Chrysler violated. We also reject Brooks' attempt to expand the narrow exception we recognized in Bowman by relying upon so called "common law duties of the dealership.(47)"
Brooks thereby suggested, but did not expressly hold, that public policy supporting a Bowman claim must be identifiable from a Virginia statute. In its January 18, 1996 decision in Stallings v. Leeds,(48) the Martinsville Circuit Court followed Brooks and has dismissed a Bowman sexual harassment claim which did not identify an applicable Virginia statute.
A strong argument to the contrary, however, can be made, for at least two reasons. First, the Virginia Supreme Court in Brooks did not have before it an issue involving a federal statute, and so did not have occasion to rule on this issue. Second, one of the examples of a Bowman claim offered by the Virginia Supreme Court in Bowman was "federal consumer credit protection laws."
Virginia courts have reached varying conclusions on this issue, some finding that a Bowman claim can be based upon a federal statute. For example, in the 1988 case of Fielder v. Southco, Inc. of South Carolina,(49) the United States District Court for the Western District of Virginia allowed a Bowman claim to go forward based upon a federal anti-retaliation statute. In Fielder, William Fielder claimed he was discharged in retaliation for reporting instances of sexual harassment of female employees by his supervisor. The court found such a claim was actionable under Bowman:
The public policy advanced by the plaintiff was the protection of female employees from sexual harassment by their supervisors. This is clearly a policy which is designed to protect the rights of all employees to be free from a sexually hostile work environment. Indeed, Congress has codified this public policy at 42 U.S.C. § 2000e-3, which provides in pertinent part that it is an unlawful employment practice to discriminate against any employee because that employee has "opposed any practice made an unlawful employment practice by this subchapter."(50)
A similar conclusion was reached in October of 1995 by the federal court in Harrisonburg, which held in Hensler v. O'Sullivan Corp.(51) that a Bowman claim could be based upon Title VII of the Civil Rights Act of 1964. The court, noting that the Bowman opinion cited federal consumer protection laws, stated that it "believes that the public policy referred to in Bowman and Lockhart was not limited to state laws." The York County Circuit Court in its 1995 decision in Sanders v Matthews(52) also appears to have recognized Title VII as supporting a Lockhart claim, in that case for race discrimination. In 1995 the Fairfax Circuit Court in McBroom v. DynCorp.(53) allowed a Bowman claim to proceed based upon Virginia Code section 18.2-178 (larceny by false pretenses) and the Federal False Claims Act. In McBroom, the court stated, "although the statutes whose policies were violated in Bowman and Lockhart were state statutes, no language in either of those Supreme Court opinions limited the applicable public policies to those underlying state, rather than federal, statutes."
Contrary authority, however, can be found. For example, a footnote in the Virginia Supreme Court's 1994 Lockhart decision suggests that a federal statute would not support a Bowman claim. In Lockhart, the Court stated that "a common law tort action alleging wrongful discharge ... is governed solely by state, not federal, law."(54) The rule suggested by the Lockhart footnote has been followed in some recent cases. For example, in Spencer v. Tultex Corp.(55) and Riddle v. Tultex Corp.(56), the circuit court for the Twenty-First Judicial Circuit held that Bowman claims are "limited to discharges which violate public policy set forth in the Virginia statutes." A similar conclusion was reached by the federal court in Richmond in Childress v. City of Richmond,(57) in which the court opined that the Bowman exception to the employment-at-will rule "is limited to policy as embodied by state statutes, not federal ones."
There is no clear answer to this question at the present time, and the issue will probably be resolved only by a Virginia Supreme Court decision expressly ruling on it.
Contract Renewal
Bowman applies to situations where an employee is discharged. What if an employee has a contract for a definite term, and the employer refuses to renew it? If the refusal was in violation of a public policy, might that support a Bowman claim?
The Virginia Supreme Court has not addressed this question directly. However, the views of Justice Whiting and Chief Justice Carrico can be discerned from their dissent in a 1995 non-Bowman case. In Commercial Business Systems, Inc. v. Bellsouth Services, Inc.,(58) they stated:
We apply two "narrow" exceptions to the termination rights of at-will employment contracts. Each is based on public policy articulated in statutory provisions. [Citing Lockhart.] .... Here, we are dealing with a claim of an allegedly improper refusal to renew a contract rather than an allegedly improper termination of an at-will contract. However, the same principles apply in both instances.
This appears to suggest that at least some of the Justices of the Virginia Supreme Court would recognize a Bowman refusal-to-renew claim, although a reliable answer to this question is not yet available.
Constructive Discharge
What if the employee quits, allegedly due to intolerable working conditions? Is there such a thing as a Bowman claim for constructive discharge?
A number of courts have refused to recognize such Bowman claims. Cases to that effect include Reed v. Cardiology Associates, P.C.(59) from the Portsmouth Circuit Court (sexual harassment), Jones v. Professional Hospitality Resources, Inc.(60) from the Virginia Beach Circuit Court (sexual harassment), and Whitehurst v. Liosatos(61) from the Virginia Beach Circuit Court (sexual harassment).
Contrary authority, however, exists. For example, in its October 1995 decision in Hensler v. O'Sullivan Corp.(62) the federal court in Harrisonburg held that a Bowman claim could arise in a situation involving constructive discharge rather than actual discharge. "Discharge is discharge whether the employer simply comes out and says so or conducts itself in such a manner to force the employee out of his job," according to that court. In the November 1995 decision in Ecklund v. Fuisz Technology. Ltd.(63), the Alexandria federal court allowed a Bowman constructive discharge claim based on same-sex harassment to go forward. And in its December 1995 decision in Dowdy v. Bower,(64) the Circuit Court for the City of Roanoke expressly recognized constructive discharge in the context of a Bowman claim for sexual harassment. The court adopted the federal courts' view on constructive discharge, which has long recognized such claims in actions brought under Title VII and other federal statutes. Although this state court decision relied upon the Fourth Circuit's 1986 decision in Bristow v. Daily Press, Inc.(65) as providing the federal test for constructive discharge, the March 10, 1995 Fourth Circuit decision in Martin v. Cavalier Hotel Corp.(66) should also be considered in regard to the Fourth Circuit's current criteria for constructive discharge claims.
For a time, it appeared that federal courts in Virginia might be compelled to refuse to recognize Bowman constructive discharge claims. On March 19, 1996, the Fourth Circuit ruled in an unpublished decision in Hairston v. Multi-Channel TV Cable Co.(67) that dismissal of such a claim under Federal Rule 12(b)(6) was appropriate because "no Virginia court has expanded the Lockhart exception to a claim of constructive discharge." Since that decision, however, a Virginia court did recognize such a claim. Specifically, the Richmond Circuit Court in its May 20, 1996 decision in Lundy v. Cole Vision Corp.(68) overruled a demurrer to a motion for judgment alleging constructive discharge resulting from race discrimination. Nevertheless, in July of 1996 the federal court in Norfolk in Dixon v. Denny's, Inc.(69) held that "as a matter of law that a claim for constructive discharge does not yet exist under Virginia law."
Whether federal courts in Virginia will recognize Lockhart claims for constructive discharge remains unpredictable.
SUGGESTIONS FOR EMPLOYERS
Given the evolving state of Virginia wrongful discharge law and the growing number of Bowman claims being asserted by aggrieved employees, employers should take an aggressive approach to their employment-related risk management. The following are some specific steps employers may wish to consider.
The employer should review its employment practices, and evaluate whether those practices need to be modified to reduce the risk of wrongful discharge claims. A walk-through of the entire facility is recommended.
The company's policies, especially those stated in the employee handbook, should be carefully reviewed. Do they comply with all applicable state and federal laws? Is there an effective procedure by which discrimination or harassment complaints can be handled internally? Does the employee handbook reflect the company's commitment to equal employment opportunity?
The disciplinary procedures should be audited to ensure that discipline, including discharge, is applied consistently and in a nondiscriminatory manner. The paper trail will be important in defending any Bowman claim, and supervisors may need to be reminded of the importance of properly documenting disciplinary action. Termination procedures should be reviewed and modified if appropriate.
The company should have a plan of action in place for responding to any Bowman claims which are threatened or asserted. Care should be taken to avoid any action which appears to be retaliatory.
These actions are all part of the self-evaluation process which many employers will already have in place. Nevertheless, the specific threats posed by Bowman claims should be understood and addressed, if for no other reason than that Bowman claims may expose managers and supervisors to personal liability, which may not be covered by insurance and may not be dischargeable in bankruptcy. Furthermore, if this self-evaluation process is not occurring, the employer may have exposure under the various federal and state civil rights statutes in addition to exposure to a Bowman claim. Accordingly, prudence will usually call for employers to engage in this process of self-evaluation as part of their overall risk management program.
Endnotes
1. Ray Hogge practices labor and employment law at Payne, Gates, Farthing & Radd, P.C., Dominion Tower, 999 Waterside Drive, Suite 1515, Norfolk, Virginia 23510, (757) 640-1500.
2. Other claims, such as breach of contract claims and claims alleging violations of state or federal civil rights statutes, are also sometimes called "wrongful discharge" claims. For purposes of this article, "wrongful discharge" is used only to refer to Virginia law claims for the tort of discharge in violation of public policy.
3. This article is for informational purposes only. Nothing in it constitutes or shall be construed to constitute legal advice.
4. 229 Va. 534, 331 S.E.2d 797 (1985).
5. 229 Va. 540.
6. 234 Va. 462, 362 S.E.2d 915 (1987). This case was an appeal from the Norfolk Circuit Court.
7. Emphasis added.
8. Emphasis in original.
9. Emphasis added.
10. Former Va. Code § 65.1-40.1; see Va. Code § 65.2-308.
11. Va. Code § 40.1-51.2:1 and -51.2:2.
12. Former Va. Code § 55.01-41 and 55.01-46; see Va. Code § 51.5-40 et seq. (Virginians with Disabilities Act).
13. Miller, 362 S.E.2d at 919.
14. Va. Code § 2.1-715.
15. Va. Code § 2.1-725.
16. 247 Va. 98, 439 S.E.2d 328 (1994).
17. Id.
18. 247 Va. at 104-05.
19. 247 Va. at 105.
20. No. 95-1495.
21. Law No. CL95-225 (Fauquier County Cir. Ct. 1/17/96) (holding the amendments did not apply to a Lockhart cause of action for age and disability discrimination which arose on August 1, 1994 and which was filed on June 29, 1995).
22. Law No. CL94-310 (Twenty-First Judicial Circuit 2/7/95).
23. Law No. CL94-284 (Twenty-First Judicial Circuit 2/7/95).
24. Id.
25. CL95-742.
26. Memorandum Opinion, Law No. 21717-RC (Newport News Cir. Ct. 12/11/95).
27. Va. Code § 2.1-725.
28. Id.
29. No. LA-3123-1, Letter Opinion (5/20/96) (Hughes, J.).
30. Memorandum Opinion, Civ. Action No. 95-759-R (W.D. Va. 10/31/95).
31. No. 95-0568.
32. No. 95-1495.
33. Law No. 6759, Order (5/28/96) (race discrimination).
34. Law No. CL95-225 (Fauquier County Cir. Ct. 1/17/96) (holding the amendments did not apply to a Lockhart cause of action for age and disability discrimination which arose on August 1, 1994 and which was filed on June 29, 1995).
35. Case No. ML-4331, Memorandum Opinion at 7 (Richmond Cir. Ct. 8/1/96).
36. Bowman, 229 Va. at 539, citing Sheets v. Teddy's Frosted Foods, Inc., 427 A.2d 385 (Conn. 1980).
37. Bowman, 229 Va. at 540, citing Harless v. First National Bank in Fairmont, 246 S.E.2d 270 (W. Va. 1978).
38. 11 V.C.O. 15 (Frederick County 1986).
39. 19 V.C.O. 184 (Richmond Cir. Ct. 1990).
40. 19 V.C.O. 261 (Fairfax Cir. Ct. 1990).
41. Va. Code § 51.5-1 et seq.
42. 871 F. Supp. 854 (E.D. Va. 1994).
43. Civil Action No. 95-0073-C, Memorandum Opinion at 4-5 (W.D. Va. 7/23/96).
44. 254 Va. 156, 486 S.E.2d 545 (6/6/97).
45. Va. Code § 2.1-374.
46. Record No. 950568, V.L.W. No. 096-6-002.
47. Id. (emphasis added).
48. Case No. CL95-171.
49. 699 F. Supp. 577 (W.D. Va. 1988).
50. 699 F. Supp. at 578.
51. Memorandum Opinion, Civ. Action No. 94-0040-H (W.D. Va. 10/31/95).
52. Law No. 6759, Order (5/28/96) (race discrimination).
53. Letter Opinion, At Law No. 139027 (Fairfax Cir. Ct. 8/7/95).
54. 247 Va. at 105 note.
55. Law No. CL94-310 (Twenty-First Judicial Circuit 2/7/95).
56. Law No. CL94-284 (Twenty-First Judicial Circuit 2/7/95).
57. Memorandum Opinion, Civ. Action No. 3:95cv662 (E.D. Va. 11/21/95).
58. 453 S.E.2d 261 (1995).
59. Order, Law Nos. 93-1481 and 94-790 (Portsmouth Cir. Ct. 11/8/94).
60. Letter Opinion, Law No. CL94-2421 (Virginia Beach Cir. Ct. 2/24/95).
61. Law No. CL95-374 (Virginia Beach Cir. Ct. 12/95).
62. Memorandum Opinion, Civ. Action No. 94-0040-H (W.D. Va. 10/31/95).
63. Memorandum Opinion, Civ. Action No. 95-469-A (E.D. Va. 11/7/95).
64. CL95-534.
65. 770 F.2d 1251 (4th Cir.), cert. denied, 457 U.S. 1082 (1986).
66. 1995 U.S. App. Lexis 4786.
67. No. 95-2363, Unpublished Opinion at 5 (4th Cir. 3/19/96).
68. No. LA-3123-1, Letter Opinion (5/20/96) (Hughes, J.).
69. Action No. 2:95cv901, Opinion and Order at 11-12 (E.D. Va. 7/29/96).
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