Justices rule on constructive discharge issue

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The Indiana Supreme Court decided Tuesday that a claim for constructive retaliatory discharge falls within the state's public policy exemption to the employment-at-will doctrine.

The opinion, Brennan Baker and Moisture Management v. Tremco Inc. and Rick Gibson, No. 29S02-0902-CV-65, addressed only three of five issues Brennan Baker raised on appeal: constructive retaliatory discharge; whether a noncompetition agreement is unenforceable because Baker's new company actually competes with a subsidiary of his former employer, Tremco; and whether a statement from his former supervisor, Rick Gibson, was slanderous per se so as to create an actionable defamation claim.

Baker worked for Tremco selling construction and maintenance of roofing systems. After 13 years with the company, he resigned following a dispute regarding the company's sales and bidding practices, believing they were illegal. Baker then formed Moisture Management, which provided a service similar to one provided by a Tremco subsidiary.

Baker sued Tremco for a declaration the noncompete covenant he signed is unenforceable and also asserted claims for wrongful termination, defamation, and violation of Indiana's blacklisting statute. Tremco counterclaimed seeking enforcement of the covenant and said that Baker breached his contract. The trial court granted summary judgment in favor of Tremco and Gibson and issued injunctive relief against Baker and his new company.

Baker claimed when he told Tremco he didn't want to participate in the company's allegedly unlawful pricing practices, he was advised he would be fired, so instead, Baker resigned. The Supreme Court concluded that a constructive retaliatory discharge falls within the ambit of the narrowly drawn public policy exception to the employment-at-will doctrine.

The reason for the discharge must fit within the exception as recognized by Frampton v. Cent. Ind. Gas Co., 260 Ind. 249, 297, N.E.2d 425 (1973) and McClanahan v. Remington Freight Lines Inc., 514 N.E.2d 390, 392-93 (Ind. 1988); Baker's claim isn't within the ambit of the recognized exceptions, wrote Chief Justice Randall T. Shepard.

"At its heart, Baker's constructive discharge claim rest on his allegation that the roofing activities conducted under this statutory regime (Indiana Code Section 20-20-1-1) contravene other statutes about bidding public projects," he wrote. "We can be agnostic on such a question of statutory construction and still conclude as a matter of common law that it is not on par with the rights and obligations recognized as a basis for discharge complaints in Frampton and McClanahan."

Using Ohio law and Baker's deposition to settle the noncompete issue, the justices affirmed the trial court finding that Baker was competing for business he had been conducting for Tremco with his new company, Moisture Management.

Finally, the high court addressed Baker's claim that Gibson made defamatory statements per se when he told someone Baker had engaged in inappropriate sales practices. Gibson's statement was far too vague to conclude that they were "so obvious and naturally harmful that proof their injurious character can be dispensed with," wrote the chief justice.


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  1. I think the cops are doing a great job locking up criminals. The Murder rates in the inner cities are skyrocketing and you think that too any people are being incarcerated. Maybe we need to lock up more of them. We have the ACLU, BLM, NAACP, Civil right Division of the DOJ, the innocent Project etc. We have court system with an appeal process that can go on for years, with attorneys supplied by the government. I'm confused as to how that translates into the idea that the defendants are not being represented properly. Maybe the attorneys need to do more Pro-Bono work

  2. We do not have 10% of our population (which would mean about 32 million) incarcerated. It's closer to 2%.

  3. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  4. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  5. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.