1. Public Policy Exceptions
to Employment At-Will Rule

2. Employees who are not hired for a
fixed term or under a contract are
EMPLOYEES AT-WILL…

3. who can be fired…

4. for good reason, bad reason, or no
reason at all.

5. HOWEVER…

6. Many states have created
exceptions to the
employment at-will rule.

7. But the exceptions are narrow:
STATUTORY
JUDGE-MADE

8. Judge-Made Exceptions
• Derived from state common law
• (3) Major Categories:
– Implied (in fact) Contract Exception (ICE)
– Implied (in law) Covenant of Good Faith and Fair
Dealing Exception (CGFFD)
– Public Policy Exception (PPE)

9. PPE DOCTRINE
If termination of an at-will employment
relationship violates a clear mandate of public
policy, an employee may have a cause of action
against his employer for wrongful discharge.
Geary v. U.S. Steel Corp., 456 Pa. 171, 185 (1974)

10. As of October 2000, forty-three states (and the
District of Columbia) recognize a public policy
exception to the employment at-will rule.
The 7 states which do not have the exception are:
– Alabama
– Georgia
– Louisiana
– Maine
– Nebraska
– New York
– Rhode Island
– Florida
Source: http://www.bls.gov/opub/mlr/2001/01/art1full.pdf

11. SOURCES OF “CLEARLY MANDATED”
PUBLIC POLICY
• Statutes (state & federal)
• Constitution (state & federal)
• Broader Notions of Public Good & Civic Duty

12. So When Has a Discharge of an EE
Violated Public Policy???

13. Most Common Scenarios

14. TAKE-AWAY
An employee may have a cause of action if he is
discharged in retaliation for:
1. Refusing to commit a crime
2. Whistleblowing
3. Asserting a legal right or privilege

15. Although criminal statutes will almost
always embody a clear mandate of
public policy, not all whistleblowing
and assertions of legal
rights/privileges will meet the “clearly
mandated” threshold.

16. WHISTLEBLOWING

17. Cost ↔ Benefit Analysis
FACTORS:
1. benefit of warning public
2. cost of undue disparagement to Employer
3. importance of message
4. manner of reporting

18. But even when the benefit of
warning the public is high, a court
may decide that the manner of
reporting overrides important
policy considerations.

19. Just ask George Geary…

20. Geary v. U.S. Steel Corp.

21. The Set-Up…
U.S. Steel Corp. was selling a new product
(tubular casing) that was specifically designed
for high pressure use.

22. The Problem…
The tubes had not been tested adequately and
were potentially unsafe…

23. The Hero…
George Geary, a company salesman, used his
“close connect” with the company VP and
reported the problematic tubes…
…U.S. Steel Corp. ended up withdrawing the
product from the market…

24. ??????

25. NOT EXACTLY…

26. YOU’RE FIRED!

27. WAIT…

28. The Court Speaks…
…It may be granted that there are areas of an employee's life in
which his employer has no legitimate interest… particularly
where some recognized facet of public policy is threatened…
But this case does not require us to define in comprehensive
fashion the perimeters of this privilege, and we decline to do
so…”
…We hold only that where the complaint itself discloses a
plausible and legitimate reason for terminating an at-will
employment relationship and no clear mandate of public policy
is violated thereby, an employee at will has no right of action
against his employer for wrongful discharge.”
Id. at 183-85.

29. What Went Wrong…
Geary “Whistleblowing” Wasn’t The Problem…

30. IT WAS TO WHOM HE BLEW THE
WHISTLE…

31. The Breakdown…
Geary bypassed his immediate supervisors when he
reported the problem.
Accordingly…
“The praiseworthiness of Geary's motives
[did] not detract from the company's
legitimate interest in preserving its
normal operational procedures from
disruption.”
Id. at 183

32. Layman’s Translation---> Follow the
chain of command

33. Geary Summary
1. Pennsylvania Supreme Court first recognized the
potentiality of a non-statutory cause of action for
terminating an at-will employee.
2. The wrongful discharge, however, must violate a
“clear and compelling” mandate of public policy.
3. In a “whistleblower” situation, the employee’s
manner of reporting the wrongdoing must be
balanced against an employer’s “legitimate interest in
preserving [the company’s] normal operational
procedures from disruption.”

34. Recognized PPE Cases
In Pennsylvania, at-will employees cannot be
discharged in retaliation for:
1. Filing Workers’ Compensation Claim
2. Filing Unemployment Benefits Claim
3. Refusing to submit polygraph test
Rothrock v. Rothrock Motor Sales, Inc., 584 Pa. 297, 299 fn 1 (2005)

35. SO FAR.