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In virtually every state, employees are “at-will.” So long as there is no contract of employment, employees can be fired for any reason or no reason so long as the termination does not violate public policy. The battle in the courts is how to define the so-called “public policy exception.” ACQUITTAL OF MURDER CHARGE DID NOT SAVE EMPLOYMENT The limits of this exception were illustrated vividly by the 8th U.S. Circuit Court of Appeals’ decision in the recent case of Olander v. State Farm Mutual Automobile Insurance Co. In Olander, the plaintiff was an insurance agent for State Farm who was accused of the murder of one of his neighbors. The company asked that he take a leave of absence while the criminal charges were resolved. The offer provided that Olander would not solicit business as a State Farm agent and that all of his business would be reassigned. Olander declined (although it is hard to imagine he had many options). State Farm then invoked the clause in the agency contract that he was an employee at-will and terminated his employment. Olander was convicted of manslaughter, but this conviction was overturned on appeal. He was tried a second time and acquitted of all charges. He then brought suit against State Farm claiming that his contract made his employment terminable only “for cause” and was not terminable at will. While the 8th Circuit focused on whether the district court (having jurisdiction due to diversity) should have considered parol evidence in interpreting the contract, perhaps the more far-reaching issue was whether the “presumption of innocence” that is inherent in our criminal proceedings, is a public policy strong enough to offset the at-will nature of employment. In Olander, as in every other state or federal case to discuss the issue, the answer is that the presumption of innocence is not the type of clear public policy that can support a viable claim for wrongful discharge. PRESUMPTION OF INNOCENCE EXCLUSIVELY CRIMINAL LAW CONCEPT As the 1st Circuit noted in DeFazio v. Delta Air Lines, Inc., 1994 U.S. App. LEXIS 22901 (1st Cir. 1994), the “presumption [of innocence] serves to focus a jury on what a prosecutor must establish to obtain a conviction in a criminal case. It has no applicability in the employment context and, consequently, does not warrant invocation of the public policy exception.” One of the earliest, and strongest cases, rejecting the presumption of innocence in the employment context is Cisco v. United Parcel Services, Inc., 476 A.2d 1340 (Pa. Super. 1984). In this case, Cisco was a driver for UPS who was accused of theft while on the job. Although he was ultimately acquitted of the crime of which he was accused, UPS fired Cisco anyway. He then sued for his job back. The Pennsylvania appellate court upheld the lower court’s decision granting summary judgment, on the grounds that the presumption of innocence applied to the trial, but was not to be “superimposed into an accused’s remaining life experiences.” LIMITED WORKPLACE INVESTIGATIONS While it is the rare employment situation where an employee is accused but then acquitted of a crime, employers are frequently faced with situations where they believe an employee to have engaged in wrongdoing, or where one employee accuses the other of inappropriate, maybe illegal, conduct. The employer will then often call counsel to report the accusation or belief and to then hedge by saying “but there is no proof” that this happened. Sometimes even the term “ due process” will find its way into the questions posed to counsel. The answer to these questions can be easily extrapolated from the “presumption of innocence” cases. Simply put, if an acquittal by a jury (legal “proof” of innocence) will not save an employee’s job, then an employer will be legally justified in acting on its doubt about the employee’s innocence. As explained by the Maryland Court of Appeals in Beery v. Maryland Medical Laboratory, Inc., 597 A.2d 516 (Md. App. 1991), “[the employee] claimed that she was fired because she had been wrongfully accused of conduct that violated company policy and constituted the crime of theft. [F]iring her on the basis of a fellow employee’s unsubstantiated allegations, without proof and, indeed, without fully investigating the matter, may very well have been improper — even foolish — but can hardly be said to contravene any clear mandate of public policy.” This is not to suggest that rumor and innuendo justify terminating an employee. And it is important to keep in mind the critical caveat to “at-will” employment — that federal and state anti-discrimination laws prevent disparate treatment of employees. If an employee in a protected category is terminated based upon an unsubstantiated allegation of wrongdoing, the employer should be prepared to terminate everyone accused of the same action in the same manner (which could invite anarchy in the workplace). Additionally, unionized and public employees may well have “due process” rights or may be employees terminable only “for cause.” Rather, the Olander case emphasizes the national trend narrowly applying the at-will concept, even in the face of innocence, proven in the courtroom or the workplace. Sidney R. Steinberg is a partner in Post & Schell’s (www.postschell.com) business law and litigation department. He concentrates his national litigation and consulting practice in the field of employment and employee relations law. Steinberg has lectured extensively on all aspects of employment law, including Title VII, the FMLA and the ADA.

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