Wrongful Termination in Oregon

by Joel Christiansen on August 16, 2012

Oregon law provides remedies for some employees who are “wrongfully” terminated. “Wrongful termination” refers to a termination that violates a law, contract, or public policy. Absent a legal violation, an employee does not typically have recourse for a termination, even if an employer’s reasons seem unfair, unjustified, or false.

Most employment in Oregon falls under the “at will” employment doctrine. At-will employment means that employers are generally permitted to “discharge an employee at any time and for any reason, or for no reason at all.” Simpson v. Western Graphics, 293 Or 96, 99 (1982); Nees v. Hocks, 272 Or 210 (1975). The Oregon Supreme Court wrote that, “either party may terminate the [employment] contract for any reason, even for a bad cause.” Sheets v. Knights, 308 Or 220, 233 (1989)(emphasis added). At-will employment also means that employers are not typically required to show good cause or justification for terminating an employee’s employment.

However, Oregon law contains several exceptions to at-will employment. These exceptions allow employees to assert wrongful termination claims and other employment-related legal claims against former employers.

Common exceptions to at-will employment (e.g., things that might make a termination “wrongful”) include: (1) retaliation; (2) whistleblowing violations; (3) discrimination; (4) breach of contract; and (5) violations of public policy.

Wrongful Termination Based on Retaliation

Employers are prohibited from retaliating against an employee because the employee engaged in legally protected activities. To succeed in a retaliation claim, an employee must be able to prove three things: (1) the employee was engaged in a legally protected activity; (2) the legally protected activity prompted the employer’s actions; and (3) the employer’s actions had adverse consequences for the employee.

The employee must have engaged in a legally protected activity.

Oregon law specifies several protected activities. Employers cannot punish employees for engaging in these activities. They include:

  • Reporting illegal conduct (ORS 659A.199)
  • Opposing unlawful practices (ORS 659A.030(1)(f))
  • Making wage claims or providing testimony regarding wage claims (ORS 652.355; ORS 653.060)
  • Filing a workers’ compensation complaint. (ORS 659A.040)
  • Requesting disability accommodations. (ORS 659A.109)
  • Invoking rights to protected family or medical leave. (ORS 659A.183(2))
  • Reporting health and safety issues at the workplace. (ORS 654.062)
  • Reporting safety-related issues in a hospital, nursing home, or assisted living facility. (ORS 441.174; ORS 443.765(5)(c); ORS 659A.233)
  • Instituting or cooperating with legal proceedings. (ORS 659A.230)
  • Testifying at an unemployment hearing. (ORS 659A.233)
  • Exercising rights related to service in the Armed Forces or National Guard. (ORS 659A.082(2)(c))

In addition to Oregon law, federal law contains several additional protections, including: Occupational Safety & Health Act, 29 U.S.C. § 660(c); Surface Transportation Assistance Act, 49 U.S.C. § 31105; Asbestos Hazard Emergency Response Act, 15 U.S.C. § 2651; International Safety Container Act, 46 U.S.C. App. § 1506; Energy Reorganization Act of 1974, 42 U.S.C. § 5851; Clean Air Act, 42 U.S.C. § 7622; Safe Drinking Water Act, 42 U.S.C. § 300j-9(i); Federal Water Pollution Control Act, 33 U.S.C. § 1367; Toxic Substances Control Act, 15 U.S.C. § 2622; Solid Waste Disposal Act, 42 U.S.C. § 6971; Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9610; Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, 49 U.S.C. § 42121; Sarbanes-Oxley Act, 18 U.S.C. § 1514A; Pipeline Safety Improvement Act, 49 U.S.C. § 60129; Federal Rail Safety Act, 49 U.S.C. § 20109; National Transit Systems Security Act, 6 U.S.C. § 1142; Consumer Product Safety Improvement Act, 15 U.S.C. § 2087.

The legally protected activity must have prompted the employer’s actions.

There are a number of ways an employee can demonstrate that the legally protected activity prompted the employer to act. Employees may provide direct evidence of retaliation, such as an employer’s negative comments about the employee’s protected conduct. See e.g., Bahri v. Home Depot Usa, Inc., 242 F.Supp.2d 922 (D. Or., 2002)(“If the plaintiff offers direct evidence of discriminatory motive, a triable issue on the actual motivation is created ‘even if the evidence is not substantial.’”)(quoting Godwin v. Hunt Wesson, Inc., 150 F.3d 1217, 1221 (9th Cir. 1998)).

However, courts have acknowledged that where “the issue is the employer’s motive for firing a worker, there rarely will be direct evidence of that motive and the effect that it had on the employer’s action.” Chase v. Vernam, 199 Or.App. 129, 110 P.3d 128 (2005) (citing Portland Assn. of Teachers v. Mult. Sch. Dist. No. 1, 171 Or.App. 616, 624 (2000)). Therefore, employees may use circumstantial evidence to prove a connection between legally protected activity and an employer’s actions.

For example, an employee may be able to establish a link between protected conduct and a termination by proving that the two events happened within a close time. Huber v. Or. Dep’t of Educ., 235 Or.App. 230 (2010); Herbert v. Altimeter, Inc., 230 Or.App. 715, 724 (2009)(close temporal proximity of an employee’s engagement in protected activity to termination of employment is circumstantial evidence that the employer had an impermissible motive).

The employer’s actions had adverse consequences for the employee.

In wrongful termination cases, the adverse consequence is usually a termination. However, earlier adverse consequences such as demotions, reductions in hours or pay, or assignment to less favorable working conditions, may also support a claim for retaliation.

Wrongful Termination Based on Whistleblowing Violations

Whistleblower protection laws protect employees who report certain unlawful or harmful activities. Whistleblowing claims are similar to and often overlap with retaliation claims.

Oregon recently enacted a broad private whistleblower protection statute that makes it an unlawful employment practice for an employer to:

discharge, demote, suspend or in any manner discriminate or retaliate against an employee with regard to promotion, compensation or other terms, conditions or privileges of employment for the reason that the employee has in good faith reported information that the employee believes is evidence of a violation of a state or federal law, rule or regulation.

ORS 659A.199(1).

Oregon law also protects employees who initiate or aid criminal or civil proceedings. ORS 659A.230. Finally, public employees in Oregon are protected from employer discipline based on disclosures of  “[m]ismanagement, gross waste of funds or abuse of authority or substantial and specific danger to public health and safety resulting from action of the state, agency or political subdivision.” ORS 659A.203(1).

To prove a wrongful termination case based on a whistleblowing violation, an employee must be able to prove: (1) the whistleblowing activity is protected under a law, rule, or regulation; (2) the employee’s protected whistleblowing activity prompted the employer’s action; and (3) the employer’s action adversely impacted the employee.

Wrongful Termination Based on Discrimination

Employers may not fire an employee because of an employee’s status in a protected class. Employers who make employment decisions based on protected classes may be liable for wrongful termination claims based on unlawful discrimination.

Oregon employment discrimination statutes, including ORS 659A.030, outline a list of protected classes, including:

  • Race, color, religion, sex, sexual orientation, national origin, marital status, and age (ORS 659A.030)
  • Injured worker status (ORS 659A.030)
  • Disability (ORS 659A.100 et seq.)
  • Medical leave (ORS 659A.150 et seq.)
  • Uniformed Service Status (ORS 659A.082)
  • Victims of Domestic Violence, Harassment, Sexual Assault or Stalking (ORS 659A.290)
  • Credit History (ORS 659A.320)

Much like wrongful termination claims based on retaliation, employees who wish to assert discrimination claims must usually prove three things: (1) the employee belonged to a protected class; (2) the employee’s status in the legally protected class prompted the employer’s actions; and (3) The employer’s actions had adverse consequences for the employee.

Wrongful Termination Based on Breach of Contract

An employer may be liable for wrongful termination where it breaches a contract for a fixed term of employment. Bramhall v. ICN Medical Laboratories, Inc., 284 Or 279  (1978)(affirming jury verdict in an action for damages for breach of a five-year employment contract). Conversely, an employer may bring a breach of contract action against an employee who quits before a fixed-term contract expires. Pierce v. Douglas School Dist., 297 Or 363, 371 (1984).

If an employee has a contract providing for a definite term, it may be wrongful for an employer to terminate the employee before employment begins. Vuylsteke v. Broan, 172 Or App 74, 91–92 (2001). The same may also be true even if an employer terminates an at-will employment relationship before work begins. Cocchiara v. Lithia Motors, Inc., 247 Or.App. 545 (2011).

Wrongful Termination Based on Violation of Public Policy

Oregon law prohibits employers from violating public policy when firing a worker. Before Oregon courts will recognize a claim for wrongful termination based on a violation of public policy, employees must be able to identify a specific law setting out the relevant policy.

Wrongful termination claims based on public policy are a relatively recent creation in Oregon. The Oregon Supreme Court first recognized these claims in 1975 in the case of Nees v. Hocks, 272 Or 210 (1975). The case involved a woman who was fired for serving jury duty. There was no statute, rule or regulation that specifically prohibited the employer from terminating an employee because of her jury duty obligations. However, reflecting on the societal importance of jury duty, the court concluded “there can be circumstances in which an employer discharges an employee for such a socially undesirable motive that the employer must respond in damages for any injury done.” Id at 218.

Since Nees, the courts have grappled with which types of motives are “socially undesirable” enough to warrant employer liability. The court has specified two categories of “socially undesirable motives” that may give rise to wrongful termination claims based on public policy:

  • Employees discharged for fulfilling or desiring to perform an important societal obligation or duty; and
  • Employees who are discharged for exercising employment-related rights of public importance.

Delaney v. Taco Time Int’l, Inc., 297 Or 10, 14–16 (1984).

The easiest way to summarize the two categories is to provide examples. Below are a few examples of wrongful discharge cases where courts held that an employee was discharged for fulfilling or desiring to perform an important societal obligation or duty:

  • Employee fired for serving on jury duty. Nees v. Hocks, 272 Or 210, 219 (1975);
  • Nursing home employee fired for threatening to report patient abuse to the state. McQuary v. Bel Air Convalescent Home, Inc., 69 Or App 107, 110 (1984);
  • Employee fired for refusing to make false and defamatory statements about co-worker. Delaney v. Taco Time Int’l, Inc., 297 Or 10, 14–16 (1984);
  • Bank employee fired for refusing to disclose confidential customer information. Banaitis v. Mitsubishi Bank, 129 Or App 371, 379–380 (1984)

Below are a few examples of wrongful discharge cases where courts held that an employee was discharged for exercising employment-related rights of public importance:

  • Employee fired for resisting supervisor’s sexual harassment. Holien v. Sears, Roebuck & Co., 298 Or 76, 90 (1984);
  • Employees fired for attempting organized negotiation with their employer. Rauda v. Oregon Roses, Inc., 147 Or App 106, 115 (1997), vacated, 329 Or 265 (1999);
  • Employee fired for attempting to take leave under Oregon Family Leave Act. Yeager v. Providence Health System, 195 Or App 134 (2004), rev. denied, 337 Or. 658 (2004)

Attorney Representation in Wrongful Termination Cases

If you believe you were fired because of your race, color, national origin, gender, religion, age, disability, or genetic information, you should talk to a lawyer right away. There are strict time limits and rules that apply to discrimination claims; for example, in many cases employees must file a complaint of discrimination with a state or federal agency before you may sue your employer in court.