SCOV Law Blog: At-will employment bumps up against implied contract

Straw v. Visiting Nurse and Hospice of VT/NH, 2013 VT 102 

Creative Commons photo by walknboston via Flickr

Creative Commons photo by walknboston via Flickr

Editor’s note: This piece from the SCOV Law Blog is by Andrew Delaney.

Plaintiff worked for the Visiting Nurse Association and Hospice of Vermont and New Hampshire (VNA) as a licensed advanced registered nurse practitioner for a number of years. After an incident in which a patient’s family member made a complaint, plaintiff was fired. Do not pass “Go.” Do not collect $200.

There was an employee handbook that had some discipline guidelines. For those not familiar with Vermont employment law in general, here’s the 20-second, grossly oversimplified summary: employment is, by default, “at-will” — this means that unless the parties enter an employment contract, an employee can leave at any time for any reason, and an employer can give an employee the boot at any time for any reason (other than an illegal one). If, however, there’s an employee handbook with policies, those policies can give rise to an implied employment contract. In other words, the employer doesn’t get to say “Here’s what we’re gonna do,” but then say “Um, we changed our mind — see ya.”

The basic result of this law is that employers constantly generate employment material with the big bold words “This is not a Contract.” Much like Magritte’s “This is not a pipe,” such language can be a treacherous conceit.

While the employee handbook in this case took pains to use the these-written-terms -are-not-a-binding-contract-on-us language, it did have a corrective-action disciplinary policy. Thus, when plaintiff sued, most of her claims went the way of the dodo on summary judgment, but her implied-employment-contract claim went to jury trial.

There were two jury instruction conferences. The crux of the matter is that plaintiff wanted the instructions to articulate a “just cause” standard for the jury to determine whether the VNA’s firing of plaintiff was warranted; defendant objected. The trial court got rid of the “just cause” standard and plaintiff objected to that in the second conference. After the jury charge and before the case was sent to the jury, plaintiff’s counsel more or less said “same objection” and when the trial court judge asked whether that was the bit about just cause, plaintiff’s counsel said “yes.”

Defendant’s theory is that the terms of the implied contract are what control. The SCOV tends to agree with defendant.

 

The trial court judge gave the jury a special verdict form. The first question was whether plaintiff’s at-will status was modified by the handbook. The jury said “yes.” The second question was whether plaintiff had proven that the VNA had obligated itself to follow certain procedures that it failed to follow. The jury said “no.” Game over.

Plaintiff’s primary argument is that once at-will status is modified by the terms of a disciplinary policy, then an employer can only fire an employee for “just cause.” Ergo, the jury instructions in this case prevented the jury from considering the proper standard by which her termination should have been evaluated.

But first, the majority wants to talk about preservation of objections. Here, the majority says that plaintiff’s counsel failed to preserve the objection to removal of “just cause” from the instructions because the reference to the earlier-conference-objection did not distinctly state the grounds for objection pursuant to V.R.C.P. 51(b).

[Author’s note: The opinions expressed in the rant below are solely the author's own and do not reflect the views of SCOV Law, its slave labor, the author’s firm, or — arguably — any sane and rational human being].

Excuse me for a moment while I go off on a tirade. If you’ve ever repeated yourself ad nauseum in front of a judge, you know that this is one of the quickest ways to irk the living $#!t out of her. If you’ve ever been in a lengthy trial, you know that you need to be juggling about 1,001 different things at once. Referring to an earlier-stated objection for preservation should be enough to meet a formal requirement that objections be preserved, particularly if you stated the objection with specificity and clarity the first time around. All due respect, but this is the kind of scrutiny that the weird kid with a magnifying glass applies to ants. You’ve got to be kidding me.

[We now return to our regularly scheduled programming]

At this point, the case is pretty much resolved on procedural grounds. But because there’s some confusion about the nature of an implied contract of employment, the majority addresses the issue. An employee hired for an indefinite period is an at-will employee. An employer’s inconsistent-with-at-will-employment policies and practices can modify that arrangement and create an implied employment contract.

Plaintiff’s theory, as the SCOV majority articulates it, “is that once the at-will status of an employee has been modified by an implied contract, a switch is flipped as to the proper grounds of termination for that employee, and termination is henceforth subject to a ‘just cause’ requirement.” Defendant’s theory is that the terms of the implied contract are what control. The SCOV tends to agree with defendant.

The majority first discusses “just cause,” and specifically notes that this is a term generally used in relation to termination of state employees. The majority notes that the plaintiff’s flip-switching construct would have the effect of making any variation of an at-will situation disproportionate. In effect, it would impose the same standard required to terminate state employees on private employers. This, the majority explains, would be fundamentally unfair to employers. As such, the standard must be according to the terms of the implied contract. If that sounds confusing, don’t worry: the majority explicitly acknowledges this will not be the last case to struggle with the vagaries of at-will employment and implied-employment contracts.

The majority explains that the SCOV has “created confusion with our sloppy word choice in past decisions, jumping between ‘cause,’ ‘good cause,’ and ‘just cause,’ to the chagrin of litigants and judges alike.” In an effort to clarify, the majority explains that “cause,” “good cause,” and “just cause” generally mean the same thing — better than no reason. The exception is that “just cause” is a term of art when used in the state employee collective bargaining context.

The majority neglects to mention that “just cause” is also the name of a popular PlayStation® 3 game, but that’s OK.

The majority’s analysis ends by stressing the narrowness of the issue. Because plaintiff failed to effectively object to any of the language of the charge and only argued that it should’ve had more language, the majority doesn’t consider any claims that the substance of the charge contained reversible error.

Justice Robinson concurs in the merits, but dissents on the preservation issue. As the dissent views it, the “purposes of the rules of civil procedure and the practical realities of trials” dictate a more-flexible approach.

As the dissent notes, the arguments on the objection have usually already been made once. The majority’s approach requires counsel to make the same argument again, which is inefficient and redundant. The primary purpose “of the post-charge objection requirement is to give the trial court ‘one last opportunity to avoid an error.’” As the dissent sees it, restating an already made objection in short form certainly gives the trial court that opportunity. The rigid application of the distinctly-stated-post-charge-objection requirement does not serve the underlying purpose of the rule.

To butcher a Simon & Garfunkel tune: “Here’s to you Justice Robinson … Litigators love you more than you will know …”

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