ILNews

Justices rule on constructive discharge issue

Back to TopE-mailPrintBookmark and Share

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.

ADVERTISEMENT

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. I enrolled America's 1st tax-free Health Savings Account (HSA) so you can trust me. I bet 1/3 of my clients were lawyers because they love tax-free deposits, growth and withdrawals or total tax freedom. Most of the time (always) these clients are uninformed about insurance law. Employer-based health insurance is simple if you read the policy. It says, Employers (lawyers) and employees who are working 30-hours-per-week are ELIGIBLE for insurance. Then I show the lawyer the TERMINATION clause which states: When you are no longer ELIGIBLE! Then I ask a closing question (sales term) to the lawyer which is, "If you have a stroke or cancer and become too sick to work can you keep your health insurance?" If the lawyer had dependent children they needed a "Dependent Conversion Privilege" in case their child got sick or hurt which the lawyers never had. Lawyers are pretty easy sales. Save premium, eliminate taxes and build wealth!

  2. Ok, so cheap laughs made about the Christian Right. hardiharhar ... All kidding aside, it is Mohammad's followers who you should be seeking divine protection from. Allahu Akbar But progressives are in denial about that, even as Europe crumbles.

  3. Father's rights? What about a mothers rights? A child's rights? Taking a child from the custody of the mother for political reasons! A miscarriage of justice! What about the welfare of the child? Has anyone considered parent alienation, the father can't erase the mother from the child's life. This child loves the mother and the home in Wisconsin, friends, school and family. It is apparent the father hates his ex-wife more than he loves his child! I hope there will be a Guardian Ad Litem, who will spend time with and get to know the child, BEFORE being brainwashed by the father. This is not just a child! A little person with rights and real needs, a stable home and a parent that cares enough to let this child at least finish the school year, where she is happy and comfortable! Where is the justice?

  4. "The commission will review applications and interview qualified candidates in March and April." Riiiiiight. Would that be the same vaulted process that brought us this result done by "qualified candidates"? http://www.theindianalawyer.com/justices-deny-transfer-to-child-custody-case/PARAMS/article/42774 Perhaps a lottery system more like the draft would be better? And let us not limit it to Indiana attorneys so as to give the untainted a fighting chance?

  5. Steal a little, and they put you in jail. Steal a lot, and they make you king. Bob Dylan ala Samuel Johnson. I had a very similar experience trying to hold due process trampling bureaucrats responsible under the law. Consider this quote and commentary:"'When the president does it, that means it is not illegal,' [Richard] Nixon told his interviewer. Those words were largely seen by the American public -- which continued to hold the ex-president in low esteem -- as a symbol of his unbowed arrogance. Most citizens still wanted to believe that no American citizen, not even the president, is above the law." BWHaahaaahaaa!!!! http://www.philly.com/philly/blogs/attytood/When-the-president-does-it-that-means-it-is-not-illegal.html

ADVERTISEMENT