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									                      Morrison Mahoney LLP
                      Employment Law Update
Morrison Mahoney LLP                                                                      Spring 2007


 Federal Law Does Not Preempt                         dismiss asserting Butler’s action was barred by §
                                                      301 of the LMRA. Section 301 of the LMRA
 Union Worker’s Chapter 151B                          provides:
             Claim
                                                              “Suits for violation of
                                                              contracts between an
        The Appeals Court of Massachusetts                    employer and a labor
recently decided that a plaintiff’s discrimination            organization
claim pursuant to M.G.L. c. 151B is not                       representing employees
intertwined with the collective bargaining                    in an industry affecting
agreement (CBA) and therefore is not                          commerce as defined in
preempted by §301 of the Federal Labor                        this Act, or between any
Management Relations Act (LMRA).                              such labor
                                                              organizations, may be
         Plaintiff, Patricia Butler, worked for the           brought in any district
defendant, Verizon New England, Inc., for                     court of the United
twenty years as a central office technician in                States having
Lowell, Massachusetts, where she resided.                     jurisdiction of the
Verizon has a CBA with International                          parties, without respect
Brotherhood of Electrical Workers, of which                   to the amount in
Butler was a member. In October 2002, Verizon                 controversy or without
relocated Butler and her entire work group to                 regard to the citizenship
Manchester, New Hampshire. Butler sought an                   of the parties.”
accommodation from Verizon stating that her
multiple sclerosis, which she was diagnosed with               The Superior Court Judge granted
in 1989, prevented her from driving long              Verizon’s motion and Butler appealed this
distances and the extra driving time would            decision. The Appeals Court stated that
aggravate her illness. Verizon denied Butler’s        “whether Butler’s action is preempted turns on
request. Butler then took leave under the             whether her claim of discrimination under G.L.
Family Medical Leave Act until January 2003.          c. 151B asserts a nonnegotiable State law right
When Butler returned from leave, Verizon              independent of the CBA… or whether the claim
denied her second request to be transferred back      is ‘inextricably intertwined’ with that
to Lowell. Butler then retired fearing that she       agreement.” After reviewing Lingle v. Norge Div.
would be fired for missing too much work and          of Magic Chef, Inc., 486 U.S. 399 (1988) and
lose her retirement benefits.                         Allis-Chalmers Corp. v. Lueck, 471 U.S. 202
                                                      (1985), the Appeals Court of Massachusetts
        Butler filed a claim with the MCAD and        reversed the Superior Court’s decision. The
then commenced an action in the Superior              Appeals Court concluded that Butler’s
Court alleging Verizon’s failure to accommodate       discrimination claim did not develop out of any
her was handicap discrimination in violation of       contractual rights established by the CBA nor
M.G.L. c. 151B. Verizon filed a motion to

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did her claim depend upon the interpretation of      stock (his brother owned the other 50%) and
the CBA. The Appeals Court further reasoned          was one of its directors. In August 1994,
that even though analysis of Butler’s                Cashman and his brother agreed to liquidate the
discrimination claim may require the same            company and hired an individual named David
factual considerations as the contractual            Ferrari to supervise the liquidation and act as
determination of whether the transfer implicated     CEO.
the workforce adjustment provisions of the
CBA, the parallelism does not render her                     As of early June 1995, Cashman had not
discrimination claim dependent on the CBA.           received the most recent installment of the
“’When the meaning of a contract terms is not        $20,000 monthly payments that he was to be
the subject of dispute, the bare fact that a         given as part of the agreement to liquidate.
collective-bargaining agreement will be              Cashman called Blackstone and demanded this
consulted in the course of state-law litigation      payment, which Blackstone refused to issue.
plainly does not require the claim to be             Cashman then called Ferrari and complained
extinguished.’” Since Butler’s claim was             that Blackstone was wrongfully withholding his
independent of the CBA for §301 preemption           payment.
purposes, the Appeals Court denied Verizon’s
motion to dismiss.                                            Subsequently, Cashman allegedly made
                                                     threats against Blackstone's life to Ferrari.
         Although the Appeals Court allowed          Ferrari contacted both Cashman's brother and
Butler’s case to proceed, it cautioned that          his attorney and was told that Cashman's
further facts may be developed for a motion for      statements had been made out of anger and were
summary judgment indicating that the CBA is          not meant as serious. Cashman then apologized
intertwined with Butler’s discrimination claim       to Ferrari for his comments and assured him that
and federal law does preempt. The future of the      he did not intend to harm Blackstone. The next
Appeals Court decision is unclear, but for now it    day, Ferrari informed Blackstone of Cashman's
will not be easy for employers to attain dismissal   threats, but not of his subsequent conversation
of discrimination claims by relying on the CBA.      with Cashman. Following this conversation,
                                                     Blackstone left the office and finished the
                                                     remaining term of his contract by working from
                                                     home, in spite of the fact that he was requested
 SJC Reaffirms Actual Malice                         on numerous occasions to return to the office.
Standard for Corporate Officials
                                                              Blackstone subsequently brought suit for
                                                     intentional interference with advantageous
         The Massachusetts Supreme Judicial          relations, claiming that Cashman's threats had
Court has reiterated, in its recent Blackstone v.    wrongly compelled him not to renew his
Cashman decision, that a corporate director is       employment relationship with the company.
entitled to an "actual malice" jury instruction in   Following decisions in Blackstone's favor by the
a claim brought by an employee for intentional       Superior Court and the Appeals Court, the
interference with advantageous economic              Supreme Judicial Court reversed the trial verdict
relations.                                           against Cashman, holding that the trial judge
                                                     had erred in declining to instruct the jury that,
        The plaintiff, Thomas Blackstone, was        in order to find Cashman liable for intentional
employed as the CFO and Vice President of J          interference as a corporate official, it would need
.M. Cashman, Inc. His employment contract            to find that he had acted with actual malice -
was to expire on June 30, 1995. The defendant,       which the SJC has defined as "a spiteful,
James Cashman, owned 50% of the company's            malignant purpose, unrelated to the legitimate

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corporate interest" - in connection with the         Columbia Law School Professor Herbert
events that led to Blackstone's departure.           Wechsler, argued that the ALI should “make
                                                     clear as it proceeds, the areas in which it thinks
          The Blackstone decision serves as a        renovation is in order.” He quoted the report of
reaffirmation of the SJC's concern that corporate    a committee chaired by Judge Learned Hand
officials not be unduly limited in their business    stating that the ALI should study rules which are
decisions by fear of personal liability toward       “founded upon historical accident, … unjustified
employees. Although employees may be able to         by any principle of justice, … unsupportable in
establish intentional-interference claims against    principle and evil in action.” Such studies may
their employers in some circumstances, the           lead to “pronounced adverse criticism in narrow
burden of proof in such cases is significant.        situations that courts could feel free to change
                                                     previous rules without waiting for legislative
                                                     authority.” (“The Course of the Restatements”
                                                     by Herbert Wechsler, ABA Journal Feb. 1969
 RESTATING EMPLOYMENT                                Vol. 55, 147). Needless to say what “areas” of
    LAW – THE AT WILL                                the law should receive “renovation” is a topic of
       DOCTRINE                                      frequent, indeed endless, debate among members
                                                     of the Institute.
 AND THE PUBLIC POLICY
       EXCEPTION                                               Few rules of law are more firmly
                                                     established than absent agreement or statute to
                                                     the contrary, the employer (or employee) may
                 BY                                  terminate the relationship at will with or without
         RICHARD L. NEUMEIER                         cause. The rule originates in the nineteenth
                                                     century. One statement of the rule is Payne v.
         The American Law Institute                  Western and Atlantic Railroad, 81 Tenn. 507
(“Institute”) was formed in 1923 by a group of       (1884) which proclaimed an employer’s right to
prominent judges, academics, and attorneys.          discharge employees “for good cause or for no
Since then the Institute has “restated” the law in   cause or even for bad cause” and “even for cause
many areas. It began with torts and contracts        morally wrong.” This rule is followed in 49
(which have been restated a second and third         states. The exception is Montana which
time) and continued with other projects              enacted a wrongful dismissal law. The at will
including trusts and estates, property, etc.         rule has been subjected to criticism in scores of
Restatements are drafted by law professors           academic articles. Since the beginning of the
(called Reporters by the Institute), considered by   Employment Law Restatement Project the
subgroups of the Institute, and ultimately voted     Reporters have been subjected to much pressure,
on by the Institute as a whole at its annual         primarily from the plaintiff’s bar, to “correct” the
meeting in May. The Restatements carry               injustices of the at will rule. Thus far they have
considerable authority in the courts. In 1923        resisted.
employment law was not the source of much
litigation. Times have changed. In 2002 the                  The current formulation of the “Black
Institute decided to tackle the job of restating     Letter” Rule states:
employment law.
                                                             § 3.01 Presumption of
        Since the beginning of the Institute                 At-Will Employment.
members have debated whether any
Restatement should merely say what the law is
or suggest “improvements.” Former Director,

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        Absent an agreement,                           1982); Bard v. Bath Iron Works, 590 A. 2d 152
        statutory provision, or                        (Me. 1991) (noting that Maine has yet to
        public-policy rule to                          recognize a common-law cause of action for
        the contrary, an                               wrongful discharge); Weider v. Skala, 609 N.E.
        employment                                     2d 105 (NY 1992) (reaffirming that New York
        relationship is                                does not recognize wrongful discharge in
        terminable at the will                         violation of public policy); Murphy v. American
        of either party.                               Home Products Corp., 448 N.E. 2d 86 (NY.
                                                       1983) (refusing to recognize tort of wrongful dis-
1
 Restatement of the Law Third – Employment             charge); Pacheo v. Raytheon Co., 623 A. 2d 464
Law, Discussion Draft (April 27,                       (R.I. 1993) (holding that Rhode Island does not
2006)(hereinafter Discussion Draft), p. 1.             recognize tort of wrongful discharge as a cause of
                                                       action). Cf. Mont. Code Ann. §§39-2-901 to -
          Although all jurisdictions except            915 (preempting common-law claims of wrongful
Montana recognize the employment at will               discharge in violation of public policy while
doctrine, almost all also recognize the public         creating statutory action for dismissal without
policy exception. Only seven states do not             good cause).
recognize the tort of retaliation in violation of
public policy: See Reich v. Holiday Inn, 454 So.              The scope of this exception in the
2d 982 (Ala. 1984) (dismissing a claim of              Restatement has been subject to much debate.
retaliation in violation of public policy when an      The current version reads:
employee was fired for refusing to commit an
illegal act); Demarco v. Publix Super Mkt., Inc.,              § 4.01 Retaliation in
360 So. 2d 134 (Fla. 1980) (noting that where                  Violation of Public
an employment agreement is for an indefinite                   Policy
time, an employer can terminate an employee for
any reason without incurring liability); Mr. B's               An employer is subject
Oil Co. v. Register, 351 S.E. 2d 533 (Ga. Ct.                  to tort liability for
App. 1986) (reaffirming that in the absence of a               retaliating against an
controlling written contract of employment,                    employee in violation
there is no cause of action against the employer               of public policy, unless
for alleged wrongful termination); Gil v. Metal                a statute provides an
Service Corp., 412 So. 2d 706 (La. Ct. App.                    adequate alternative
                                                               remedy.
1
  Mr. Neumeier is a partner in the Boston office of    (Discussion Draft, p. 45). The exception
Morrison Mahoney LLP and has more than 25 years        excludes many claims including, for example, all
experience in defending employment cases before the
                                                       statutory anti-discrimination claims and claims
Massachusetts Commission Against Discrimination,
the Superior Court and Federal Court. He is a
                                                       where there are other protections, such as the
member of the American Law Institute and since         Sarbanes Oxley Act.
2002 has been a member of the Consultative Group
for the Restatement of the Law- Employment Law.                 The courts which recognize the tort of
He has argued three cases before the Massachusetts     retaliation emphasize that the discharge must
Supreme Judicial Court involving the public policy     violate some “public” policy, not merely be
exception to the employment at will doctrine: Mello    privately unfair or improper. The Employment
v. Stop & Shop Co., 402 Mass. 555 (1988), Flesner v.
Technical Communications Corp., 410 Mass. 805
(1991), and King v. Driscoll, et al., 418 Mass. 576
(1994).

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Restatement reporters2 recognize that “some                  believes arises from
courts broadly define public policy” (Discussion             employment; or
Draft, p. 69). The Reporters have rejected a
formulation based on broad general language                  (d) reporting or
and have limited the public policy exception to              planning to report
four specified areas:                                        employer’s conduct
                                                             that the employee
        § 4.02 Categories of                                 reasonably and in good
        Discharge That                                       faith believes violates a
        Violate Public Policy                                law or code of ethics
                                                             protective of the public
        A retaliation violates                               interest, or for
        public policy under §                                cooperating with an
        4.01 if the employer                                 ongoing governmental
        retaliates against an                                investigation.
        employee for:
                                                     (Discussion Draft, pp. 59-60). The exceptions
        (a) refusing to commit                       are consistent with Massachusetts law which, for
        an act that the                              example, does not recognize any public policy
        employee reasonably                          protection from termination where employees
        and in good faith                            are merely performing appropriate, socially
        believes would require                       desirable duties. See Smith-Pfeffer v.
        the employee to violate                      Superintendent of the Walter E. Fernald State
        a law or code of ethics                      School, 404 Mass. 145, 150 (1989)(no recovery
        protecting the public                        permitted for employee alleged that she was fired
        interest;                                    for opposing a reorganization plan that she
                                                     claimed would compromise service to patients).
        (b) fulfilling or                            In Massachusetts internal matters, including
        planning to fulfill an                       internal policies, cannot be the basis of the
        obligation the                               public policy protection. Id. at 151. No public
        employee reasonably                          policy violation occurs when the employee is
        and in good faith                            fired due to pressure from political sources
        believes is imposed by                       Yovino v. Fish, 27 Mass. App. Ct. 442, 444-5
        law;                                         (1989), review denied 405 Mass. 1205 (1989).
                                                     In Massachusetts the judge must determine
        (c) claiming or                              whether there is a basis for finding that a well-
        planning to claim a                          defined important public policy has been
        benefit or to assert a                       violated. Mello v. Stop & Shop Co., 402 Mass.
        right, or refusing to                        555, 561 n.7 (1988).
        waive a benefit or
        right, that the                                       According to the Reporters the public
        employee reasonably                          policy exception does not permit recovery to an
        and in good faith                            employee who is fired in the following
                                                     circumstances: (1) the worker, contrary to the
                                                     employer’s rules, leaves her delivery truck to
                                                     rescue a hostage during a bank robbery (§ 4.02,
2
  NYU Professor Samuel Estreicher is Chief
                                                     comment a, illustration 1), (2) the worker
Reporter. BU Professor Michael C. Harper and
Cornell Professor Stewart J. Schwab are Reporters.
                                                     refuses to lie to a newspaper reporter regarding

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allegations of occupational health and safety             •     Discrimination lawsuits and administrative
violations at the employer’s plant (§ 4.02,                     charges
comment b illustration 3), (3) the worker shows           •     Non-competition and non-solicitation
up late for work because, following a car                       disputes
accident on the way to work, he went to a                 •     Wrongful-termination actions
hospital to be checked out for injuries (§ 4.02,          •     Wage and hour claims
comment c, illustration 7), (4) the worker                •     Negotiating and drafting employment,
refuses an order to destroy discovery evidence,                 separation, confidentiality and other
unless the worker happens to belong to a                        employment-related agreements on behalf
“profession” where the code of ethics that would                of employers
be violated if she did so (§ 4.02, comment d,             •     Advising employers with respect to the
illustration 9), (5) the worker marries someone                 drafting and application of employment
who is also employed by the employer (§ 4.02,                   handbooks and policies
comment 10, illustration 1), (6) the worker               •     Conducting training sessions for managers
attempts to defend himself against physical                     concerning important employment issues
attack by a co-worker (§ 4.02, comment e,
illustration 13), and (7) the worker, employed by
a bank, finds out that his supervisor was              For additional information, please contact any of the
convicted of embezzling the supervisor’s prior         following attorneys:
employer and so informs the supervisor’s
manager (§ 4.01, comment a, illustration 1).           Lee Stephen MacPhee
                                                       Direct Dial: 617-439-7530
        Damages                                        E-mail:lmacphee@morrisonmahoney.com
         Most states that recognize the tort for
                                                       Scott Douglas Burke
retaliation in violation of public policy allow full
                                                       Direct Dial: (617) 439-7578
tort damages. Three states limit the remedy to
                                                       Email: sburke@morrisonmahoney.com
contract damages and thus also exclude punitive
damages. See, Knight v. Am. Guard & Alert,
Inc., 714 P. 2d 788 (Alaska 1986) (holding that
while discharges in violation of public policy are
forbidden by the implied covenant of good faith
and fair dealing, only contractual damages were
available and that no separate tort exists);
Johnson v. Kreiser’s, Inc., 433 N.W. 2d 225
(S.D. 1988) (contract action for wrongful
discharge is more appropriate than a tort
action); Brockmeyer v. Dun & Bradstreet, 335
N.W. 2d 834 (Wis. 1983) (same).



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