Sara Smolik
Rodgers, Powers & Schwartz LLP
18 Tremont St., Suite 500
Boston, MA 02108
(617) 727-7010
sara@theemploymentlawyers.com

            The following is a memorandum I have drafted in support of awarding tort damages to successful plaintiffs alleging wrongful termination in violation of public policy. Although it is unsettled in Massachusetts whether the courts view wrongful termination claims as sounding in contract or in tort, the Supreme Judicial Court has indicated a likelihood that tort damages are available. I believe that both employers and employees would benefit from clarification of this issue. A definitive ruling as to whether the claim sounds in contract or tort would remove much of the ambiguity concerning the claim’s statute of limitations as well as the damages available to successful plaintiffs. This memorandum is written as a hypothetical amicus brief in support of awarding tort damages in wrongful termination cases. Although written from the perspective of the plaintiff’s bar, the arguments encompassed herein should assist both plaintiffs’ and defense counsel in approaching these claims, whether in court or during settlement discussions.

Memorandum In Support Of Awarding Tort Damages to Victims of
Wrongful Termination In Violation of Public Policy

Argument

1. Massachusetts Has Repeatedly Suggested That Tort Damages Are Available to Successful Plaintiffs for Claims of Wrongful Termination in Violation of Public Policy.

            Massachusetts has expressed a preference for tort damages in claims for wrongful termination of public policy and has indicated that such claims sound in tort, not contract. See Flesner v. Technical Communications Corp., 410 Mass. 805, 813 & n.8 (1991) (declining to adopt a rule as to whether tort damages are recoverable in the absence of a fully-developed factual record, but stating that a “majority of other jurisdictions” have held that such claims sound in tort); Hobson v. McLean Hosp. Corp., 402 Mass. 413, 417 & n.3 (1988) (noting that the appropriate measure of damages in a wrongful termination claim is unanswered in Massachusetts); Maddaloni v. Western Mass. Bus Lines, Inc., 386 Mass. 877, n. 7 (1982) (limiting damages in a case involving the breach of the covenant of good faith and fair dealing to contract damages, but reserving the question of “in what circumstances public policy may require additional damages, or a different measure of damages” for another day). Compare King v. Driscoll, 424 Mass. 1, 8 (1996) (upholding trial court judge’s ruling that wrongful termination claim supported tort damages) and DeRose v. Putnam Mgmt. Co., 398 Mass. 205, 212 & n.7 (1986) (first recognizing wrongful termination claim under a contract theory, as pled by the plaintiff, but recognizing that other jurisdictions “have permitted the plaintiff to seek liability in tort for violations of public policy.”). The theory of liability is important because it determines the kinds of damages available to a successful plaintiff. King, 424 Mass. at 8.
            In Flesner, the Supreme Judicial Court suggested that tort damages, if properly pled, would be available to successful plaintiffs in wrongful discharge cases. 410 Mass. at 813. Noting that the majority of other jurisdictions to consider the question had ruled that wrongful discharge claims gave rise to tort damages, the Flesner court suggested that Massachusetts might also recognize such damages, including damages for emotional distress. Id. at 813 & n.8. Because the court’s role in Flesner was to review a grant of summary judgment, it declined to adopt a rule without a well-developed factual record from which to draw. Id. at 813.
            Looking to the language in Flesner, which states the possibility and prevalence – throughout most jurisdictions – for tort damages in wrongful discharge cases, at least one Superior Court has properly held that tort damages, including damages for emotional distress, are recoverable in wrongful discharge cases. Daigle v. DeGregorio Constr. Corp., Inc., 1995 Mass. Super. LEXIS 761, *10 (1995) (declining to award damages for emotional distress because “[p]laintiff’s evidence focused solely on lost wages rather than any type of intangible harm.”). See also Apessos v. Mem’l Press Group, 15 Mass. L. Rep. 322, *4 (Mass. Super. Ct. 2002) (“Massachusetts recognizes a common law claim (sounding in tort) for wrongful termination of an at will employee.”).

2. In the Interest of Fully Compensating Victims of Wrongful Discharge and Preventing Future Violations of Public Policy, Massachusetts Should Formally Recognize Claims for Wrongful Termination in Violation of Public Policy As Sounding in Tort.

            Given the Court’s history of permitting plaintiffs in wrongful termination cases to seek tort damages, the Supreme Judicial Court should take this opportunity to clarify the law and announce that claims for wrongful termination in violation of public policy sound in tort. See Hobson v. McLean Hosp. Corp., 402 Mass. 413, 414 (1989). In Hobson, where the plaintiff brought an action for the “common law tort” of wrongful termination in violation of public policy, the lower court had granted the employer’s motion to strike as to some of the plaintiff’s requested forms of relief. Id., at 414, 417 n.3. The Supreme Judicial Court wisely vacated the lower court’s ruling on the grounds that “the appropriate measure of damages where an at-will employee is discharged in violation of public policy is unanswered in this State and is not presented on a complete record here.” Id. at 417 n.3. In so doing, the Hobson court made it clear that judges do not have the discretion to deny plaintiffs the ability to seek tort damages in cases alleging wrongful termination of public policy and indicated that such relief would be upheld.
            Further, permitting employees discharged in violation of public policy to seek tort remedies promotes the interests of public policy by allowing greater damages against those employers who use economic pressure to coerce behavior that violates the stated goals of the Commonwealth. For example, in DeRose v. Putnam Mgmt. Co., 398 Mass. 205, 213 (1986), the court upheld the lower court’s instruction to the jury to award the plaintiff, who had successfully argued that his employer terminated him for refusing to give false testimony in a criminal investigation. Id. at 206. The jury awarded $9,000. Id. at 213. This sum hardly compensates a wrongfully terminated employee for the harm suffered or the expense of bringing a civil complaint, nor does the amount adequately punish or deter illegal conduct on the part of the employer.

1. Massachusetts should follow the majority of other jurisdictions that permit tort damages for successful claims of wrongful termination in violation of public policy.

            A majority of jurisdictions permit tort recovery for wrongful termination in violation of public policy. See Flesner v. Technical Communications Corp., 410 Mass. 805, 813 n.8 (1991) (citing cases); DeRose v. Putnam Mgmt. Co., 398 Mass. 205, 212 n.7 (1986) (“We are aware that a number of cases have permitted the plaintiff to seek liability in tort for violations of public policy.”). See also Porter v. City of Manchester, 151 N.H. 30, 43 (N.H. 2004) (“Except in a few states, tort remedies are awarded when the discharge violated public policy.”).

1. Because a claim for wrongful discharge is designed to protect an employee from the harms that result from an unlawful discharge, Massachusetts should recognize such claims as sounding in tort.

            Unlike actions in contract, which protect the interests of consenting parties in having promises performed, actions in tort “protect the interest in freedom from various kinds of harm.” Brockmeyer v. Dun & Bradstreet, 335 N.W.2d 834, 841 n.14 (Wis. 1983). The interest protected by a claim for wrongful termination is freedom from intentional conduct designed to cause harm, specifically, a retaliatory discharge. See  Porter v. City of Manchester, 151 N.H. 30, 38-39 (2004); cf. Kirley v. Kirley, 25 Mass. App. Ct. 651, 653 (Mass. App. Ct. 1988) (holding that a “corporate freeze-out” claim sounds in tort because “there is no promise to be enforced, the duty is one imposed by law because of the nature of the relationship and not because of an agreement between the parties.”). In addition, the responsibility that the prohibition on wrongful termination in violation of public policy imposes on the employer is one born out of the social policy of the Commonwealth rather than the intentions of the employer and the employee. See Falcon v. Leger, 62 Mass. App. Ct. 352, 365 (2004); Prosser, Law of Torts, (4th ed., 1971) § 92 at 613. (“The duties of conduct which give rise to [tort actions] are imposed by the law and are based primarily upon social policy and not necessarily upon the will or intention of the parties.”)
            Although a claim for wrongful termination in violation of public policy is an exception to the at-will employment doctrine, the action at the center of such a claim is a tortious act, not a breach of contract. See Flesner v. Technical Communications Corp., 410 Mass. 805, 810 (1991). According the at-will rule, an employer’s termination of the employment is not a breach of the contract because the very terms of the agreement provide that either party may terminate it, with or without cause, at any time. See Shanholtz v. Monongahela Power Co., 165 W. Va. 305, 310 (1980). The illegal act, under a claim for wrongful termination, therefore, “is not the act of discharging the plaintiff (the employer had that right under the alleged at-will employment contract), but the act of contravening public policy in carrying out such discharge.” Id.
            The Supreme Judicial Court’s own efforts to alleviate confusion between claims for wrongful discharge in violation of public policy and claims for breach of the covenant of good faith and fair dealing, so-called Fortune claims, is further evidence of this important distinction between tort and contract. See King v. Driscoll, 424 Mass. 1, 3 -4 (1996). Unlike the wrongful termination claim described herein, claims for breach of the covenant of good faith and fair dealing do sound in contract because the wrong at issue in such cases is the alleged breach of a covenant which is implied in every employment contract in Massachusetts. Fortune v. Nat’l Cash Register Co., 373 Mass. 96, 104 (1977). At the heart of a Fortune claim is an assertion that the employer has attempted to extract a financial benefit from the employee’s services without providing the benefit to the employee that is contemplated by the contract. See Gram v. Liberty Mut. Ins. Co., 384 Mass. 659, 665-66 (1981) (“We have recognized the right of recovery for a bad faith termination of a business relationship which involved overreaching by one party seeking to deny the reasonable expectations of the other party to a financial benefit of the relationship.”). Unlike a Fortune claim that is brought to protect a party’s reasonable contractual expectations, a claim for wrongful termination of public policy prevents an employer from undermining the public policies of the Commonwealth through the application of economic pressure on individual employees. DeRose v. Putnam Mgmt. Co., 398 Mass. 205, 208-09 (1986). Such a termination falls squarely within the provenance of tort, and successful wrongful termination plaintiffs should thus be entitled to tort damages.

1. Because wrongful discharge is a common law theory that protects private employees who engage in important, whistleblowing behavior, successful plaintiffs should be awarded tort damages similar to those available to public employees under the Massachusetts Whistleblower statute.

            In Flesner, Massachusetts expanded the scope of protected activity that may give rise to a claim for wrongful termination to include “performing important public deeds, even though the law does not absolutely require the performance of such a deed.” Flesner v. Technical Communications Corp., 410 Mass. 805, 810-11 (1991). Specifically, the Flesner court noted that “whistleblowing” may fall into this category. Id. at 811 n.3.  In Massachusetts, statutory whistleblower claims brought by public employees under Chapter 149, §§ 185 and 187 provide “all remedies available in common law tort actions,” including recovery for front pay and emotional distress. Larch v. Mansfield Mun. Elec. Dep’t, 272 F.3d 63, 74 (1st Cir. 2001). The statutory protections for public sector whistleblowers, combined with the Supreme Judicial Court’s language in Flesner announcing similar protections for private sector whistleblowers, underscores the Commonwealth’s interest in preventing retaliation against employees whose actions serve the public interest.  The availability of tort damages for common law wrongful discharge claims creates a greater incentive for employers to comply with the law protecting whistleblowers. Tort remedies also provide both increased incentives to employees to perform “important public deeds” and appropriate remedies where employees suffer retaliation as a result of serving the public interest.

1. Tort remedies available against individual defendants for claims of intentional interference with advantageous relations should also be available against employers who terminate an employee in violation of public policy.

             
            Juries may award plaintiffs tort remedies against individual defendants for successful claims of intentional interference with advantageous relations. Pino v. Protection Maritime Ins. Co. Ltd., 490 F.Supp. 277, 280 (D. Mass. 1980); Draghetti v. Chmielewski, 416 Mass. 808, 819 (1994). These include damages for loss of earning capacity, emotional distress, loss of self-esteem and harm to reputation where such damages are foreseeable. Pino, 490 F.Supp at 280; Draghetti, 416 Mass. at 819; Mailhiot v. Liberty Bank & Trust Co., 24 Mass. App. Ct. 525, 528 (1987). In the interest of fairness, employers who interfere with an employee’s livelihood through a tortious termination should be subject to the same penalties as an individual tort feaser; the exposure of an employer that wrongfully terminates an employee in violation of public policy should be at least as great as that of an individual defendant who maliciously interferes with an employee’s employment relationship.           

3. Plaintiffs Who Bring Successful Claims for Wrongful Termination in Violation of Public Policy Should Be Entitled to Recover the Full Panoply of Damages Compensable Under Tort Doctrine.

            Other jurisdictions, recognizing that claims for wrongful termination in violation of public policy sound in tort, have allowed tort remedies to successful plaintiffs, including: back pay, front pay, punitive damages and emotional distress. Reust v. Alaska Petroleum Contractors, Inc., 127 P.3d 807 (Alaska 2005) (upholding awards for back and front pay, emotional distress and punitive damages); Tameny v. Atlantic Richfield Co., 27 Cal. 3d 167, 178 (1980); Torosyan v. Boehringer Ingelheim Pharm, Inc., 662 A.2d 89 (Conn. 1995) (upholding award of “future lost wages”); Norris v. Hawaiian Airlines, Inc., 842 P.2d 634, 637 (Haw. 1992) (holding that tort recovery includes special damages, including compensation for out-of-pocket expenses, financial losses, general damages for pain, suffering and emotional distress and punitive damages); Porter v. City of Manchester, 151 N.H. 30 (N.H. 2004) (upholding award of front pay); Harless v. First Nat’l Bank In Fairmont, 289 S.E.2d 692 (W. Va. 1982) (upholding award of emotional distress damages and holding punitive damages available where employer’s conduct is wanton or willful). Although punitive damages are not available in Massachusetts unless explicitly authorized by statute (Flesner v. Technical Communications Corp., 410 Mass. 805, 813 (1991)), victims of wrongful discharge in violation of public policy should be permitted to collect interest on their awards under Mass. Gen. Laws Ch. 231, Section 6B.

1. Back pay and loss of future earning capacity should be recoverable under a theory of wrongful termination in violation of public policy.

            Included in the bundle of “make whole” relief available to successful tort plaintiffs are back and front pay, compensatory damages that are part of the “natural and probable consequences of the illegal conduct.” Conway v. Electro Switch Corp., 402 Mass. 385, 388 (1988).  Massachusetts has long awarded victims of wrongful termination in violation of public policy damages for back pay. See King v. Driscoll, 424 Mass. 1, 3 (1996); DeRose v. Putnam Mgmt. Co., 398 Mass. 205, 213 & n.8 (1986); Daigle v. DeGregorio Construction Corp., Inc., 1995 Mass. Super. LEXIS 761, *8. By recognizing that these actions properly sound in tort, successful wrongful termination plaintiffs would also be entitled to collect damages for front pay and/or loss of future earning capacity as a result of the defendant’s tortious conduct.
            In the context of successful tort plaintiffs, it is fundamental “that an award of damages to make someone whole sometimes needs to consider consequences extending into the future, and not just damages that have already been suffered.” Stonehill College v. Mass. Comm’n Against Discrimination, 441 Mass. 549, 580-81 (2004). Several states that have determined that wrongful termination in violation of public policy sounds in tort have made clear that successful plaintiffs are entitled to recover lost future earnings. E.g., Reust v. Alaska Petroleum Contractors, Inc., 127 P.3d 807, 818 (Alaska 2005) (“We now hold that when an at-will employee is wrongfully discharged, damages are appropriately measured by the likely duration of employment had the wrongful discharge not occurred.”); Porter v. City of Manchester, 151 N.H. 30, 44 (N.H. 2004) (plaintiff “entitled to recover lost future earnings which represent the difference between what the employee would have earned from his former employer and what he can expect to earn from his new employer, if the future earnings are reasonably ascertainable.”).

1. Damages for emotional distress should be recoverable under a claim for wrongful termination in violation of public policy.

            Massachusetts has adopted the rule of the Restatement and allows successful tort plaintiffs to recover damages for emotional distress when those damages are reasonably foreseeable. Draghetti v. Chmielewski, 416 Mass. 808, 819 (1994) citing Restatement (Second) of Torts § 774A(1)(c) (1977); see Mailhoit v. Liberty Bank & Trust Co., 24 Mass. App. Ct. 525, 527 (1987) (upholding emotional distress damaged on a claim for intentional interference with advantageous relations). At least one Massachusetts court has already held that victims of wrongful termination in violation of public policy should also be permitted to recover emotional distress damages if properly pled. Daigle v. DeGregorio Constr. Corp., Inc., 1995 Mass. Super. LEXIS 761, *10 (1995). Under the well-established rules of the Commonwealth permitting tort victims to recover damages for emotional distress suffered as a proximate cause of the defendant’s actions, emotional distress damages should be available to successful plaintiffs claiming wrongful termination in violation of public policy.

1. Damage awards compensating employees terminated in violation of public policy should be subject to interest pursuant to Mass. G.L. Ch. 231, § 6B.

            Successful tort plaintiffs are entitled to interest on damages awards. Mass. G.L. ch. 231, § 6B. The application of interest extends to awards for future loss of earning capacity. Carey v. General Motors Corp., 377 Mass. 736, 746 (1979); Kuppens v. Davies, 38 Mass. App. Ct. 498, 500 (Mass. App. Ct. 1995) (“[I]n tort cases for personal injuries or property damage, compensation for future lost wages will be treated conceptually as an already incurred loss of earning capacity.”). Because loss of earning capacity, awarded as compensation for future lost wages, is a present loss, such an award will be subject to interest. See Conway v. Electro Switch Corp., 402 Mass. 385, 391 n.9 (1988).

Conclusion

            Massachusetts, following the majority of jurisdictions across the country, has properly suggested that claims for wrongful termination in violation of public policy sound in tort. As such, successful plaintiffs in these cases should be awarded the full panoply of tort remedies, including back pay, loss of future earning capacity/front pay, damages for emotional distress and loss of reputation, and interest. By making tort remedies available to private sector whistleblowers, Massachusetts creates appropriate incentives to encourage private employees and employers to conform with the state public policies of the Commonwealth. In addition, tort remedies provide the proper measure of damages to victims of intentional, retaliatory discharge who suffer harm as a result. For the reasons stated above, Massachusetts should allow plaintiffs in wrongful termination in violation of public policy cases to seek tort remedies.