What makes a termination “wrongful” in Oregon?
In my experience, a significant number of employers and employees are confused about exactly what the “wrongful” part of wrongful termination means.
There’s a good reason for the confusion. Oregon employers are governed by a myriad of state and federal laws, rules, and regulations. Additionally, many employment relationships involve written and unwritten policies, practices, and standards. It can be tough to define the difference between right and wrong.
The following article is a brief overview of some circumstances where a termination might be considered “wrongful” under Oregon law. Please be advised that this article is not intended to provide legal advice. If you have questions about a particular legal issue, please contact a lawyer.
When it comes to determining whether a termination is wrongful, Oregon’s “at-will” employment law is a good place to start.
At-will employment is the starting point for most Oregon employment cases. In 1986, the Oregon Supreme Court explained the well-established concept that “[g]enerally an employer may discharge an employe at any time and for any reason, absent a contractual, statutory or constitutional requirement.” Patton v. J.C. Penny Co., Inc., 301 Or 117, 118 (1986). Unless there is some law or agreement prohibiting a firing, an employer can fire an employee for any reason or no reason at all. In fact, the court later remarked 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).
In other words, an Oregon employer may terminate an employee for any reason or no reason at all – as long as the reason does not breach a contract or violate a law. The same generally goes for any kind of adverse employment action (write-ups, suspensions, demotions, pay decreases, etc.) There’s no law requiring employers to justify every decision they make.
At-will employment is intended to promote free enterprise. The idea is that we don’t want the law to interfere with the free market. We don’t want to tell the market which causes justify terminating an employee and which do not. Likewise, we don’t want to a legal mandate requiring employees to have good cause to quit their jobs. As the court wrote in Patton, “It may seem harsh that an employer can fire an [employee] because of dislike of the [employee’s] personal lifestyle, but because the plaintiff cannot show that the actions fit under an exception to the general rule, plaintiff is subject to the traditional doctrine of ‘fire at will.’” That harsh rule applies both ways.
Free market aside, lawmakers realize that at-will employment has its limitations. Therefore, the law still prohibits certain types of terminations.
Breach of Contract
When an employee and employer enter into an enforceable contract, the law may provide remedies if one of the parties breaches that contract. The idea is simple: we want employers and employees to honor their commitments.
But here’s the catch. Many employment contracts are still at-will contracts that either party can terminate at any time. Therefore, many employment contracts that apply during the employment relationship will not guarantee employment for any particular length of time. Additionally, most employment contracts may be modified by the parties throughout the employment relationship.
Over the years, lawmakers concluded there are certain human traits that we don’t want to “punish.” There are also certain types of conduct that we do not want to suppress. So we enact statutes that prevent employers from taking adverse employment actions against employees because of their status in protected classes (age, sex, race, religion, etc.). We also pass statutes that prevent employers from taking adverse employment actions because of an employee’s pursuit of protected activities (making discrimination complaints, reporting criminal activity, labor organizing, etc.). These statutes provide remedies for aggrieved employees.
In addition to contracts and statutes, there are a series of court opinions that make certain terminations “wrongful” under Oregon tort law.
Wrongful termination tort claims are a relatively recent creation. The Oregon Supreme Court first recognized wrongful termination 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. Reflecting on the societal importance of jury duty, the court concluded “that 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.
- 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).
In true lawyerly style, these categories have been bent and twisted, hacked at and creatively expanded. There are lots of questions to ask. What makes something a duty or obligation? What makes a societal obligation or duty important? How can you tell if an employee actually desired to perform an obligation or duty? What are employment-related rights? What does it mean to exercise an employment-related right? The list goes on and on.
Probably the easiest way to summarize the two categories is to give some examples. Here are 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)
Here 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 (Or., 2004)