Issues in Employment Law
August 2002
An employer cannot terminate an employee for such employee's refusal to commit an unlawful act.
The Fifth Circuit Court of Appeals, the court responsible for Federal Law in Texas, Louisiana, and Mississippi, in Klumpe v. IBP, Inc. (No. 01-11008) said that terminating an employee for refusing to commit a criminal act such as using deception to fraudulently secure the execution of a document would make the employer liable for wrongful discharge.
It is generally regarded as against public policy to punish an employee for refusing to violate another express public policy by breaking the law. This creates an exception to the usual "employment-at-will" doctrine and permits an action for wrongful discharge.
Employers are liable for acts committed by their employees within the scope of their employment, which is not limited to the mere performance of express duties.
The Fourth Circuit Court of Appeals, the court responsible for Federal Law in responsible for the Federal Law in Virginia, Maryland, West Virginia, North Carolina, and South Carolina, in Ross v. Bryan (No. 98-2817), recently revisited the "scope of employment" question, which although specifically covering a car accident is still instructive in other contexts. Under Virginia law, an act is within the scope of employment if it was (1) "fairly and naturally incident to the employer's business," (2) done while the employee was engaged with the business, (3) done mistakenly or ill-advisably to further the employer's interests, and (4) not arising "wholly from some external, independent and personal motive on the part of the employee.
For example, a management employee who acts to fire an employee who had complained of harassment is arguably attempting to protect the employer. This unlawful act would be "within the scope of employment" thereby subjecting the employer to vicarious liability for the manager's act.
