TORT THEORIES IN WRONGFUL TERMINATION CASES

by

Roger E. Kohn, Esq.

Certain torts arise with particular frequency in wrongful termination litigation. This article will briefly review some of the elements of those torts which tend to be of particular importance in this area of law.

In Sheltra v. Smith, 136 Vt. 472, 392 A.2d 431 (1978), the Vermont Supreme Court recognized the tort of intentional infliction of emotional distress, sometimes known as the tort of outrage. The elements of that tort are:

Outrageous conduct, done intentionally or with reckless disregard of the probability of causing emotional distress, resulting in the suffering of extreme emotional distress, actually or proximately caused by the outrageous conduct.

Id., 136 Vt. at 476.

In the wrongful termination case of Crump v. P & C Food Markets, Inc., 154 Vt. 284, 296, 576 A.2d 441 (1990), the Vermont Supreme Court upheld a jury verdict based upon this tort upon the following evidence:

Plaintiff's evidence showed that defendant's representative summoned plaintiff to a lengthy meeting without notice, continued the meeting without a break for rest or food, repeatedly badgered him to amend and sign a statement, and that plaintiff did not feel free to leave the meeting. Immediately after the meeting, defendant's representative directed plaintiff to clean out his desk, a summary dismissal after eighteen years of service.

Id., 154 Vt. at 296-97.

In Birkenhead v. Coombs, 143 Vt. 167, 174-75, 465 A.2d 244 (1983), a landlord-tenant case, the Vermont Supreme Court upheld a jury verdict of intentional infliction of emotional distress based upon the following evidence:

Plaintiffs concede that the evidence introduced describes defendant as being shaky, upset, afraid and, at times, crying as a result of their "self help" tactics.

143 Vt. at 174. The Vermont Supreme Court rejected the argument of plaintiff (defendant on the counterclaim) that "some distress must be expected in landlord-tenant disputes, and the distress exhibited by defendant fell far short of the extreme or emotional distress required by Sheltra v. Smith." Id. The verdict in Birkenhead which was upheld by the Vermont Supreme Court was an award of only $500.00 in compensatory damages and $750.00 in punitive damages.

This tort has its genesis in the Restatement of Torts. The elements are described in the Restatement of Torts (Second) §46.¹ The Restatement formulation of this tort quite clearly contemplates very extreme conduct, resulting in very extreme emotional distress. There are a large number of cases from other jurisdictions requiring exceptionally extreme damage for the tort to be used. This is apparently because the Restatement was essentially inventing a new tort which had not previously been recognized.

It should also be noted that the Restatement requires that the elements be made out to the court before the case can go to the jury:

It is for the court to determine whether on the evidence severe emotional distress can be found; it is for the jury to determine whether, on the evidence, it has in fact existed.

Restatement (Second) of Torts §46, Comment j.

The type of damage suffered by the plaintiff in Crump v. P & C Food Markets, Inc., and particularly the type of damage suffered by the plaintiff in Birkenhead v. Coombs, is probably not sufficient to make out a claim under the Restatement formulation, as expressed in the comments to the Restatement. After all, the compensatory award in Birkenhead was only $500.00; accordingly, the damage could not have been too extreme or great!

The author contends, however, that the limitations on extreme emotional distress and extremely outrageous action envisioned by the Restatement are no longer appropriate, and that the Vermont Supreme Court should not backtrack, but should continue to allow damages to be awarded without proof of extraordinary stress or extraordinarily outrageous action.

The tort of intentional interference with contractual relationship is well established in Vermont. E.g., Trepanier v. Getting Organized, Inc., 155 Vt. 259, 268-70, 583 A.2d 583 (1990); Williams v. Chittenden Trust Co., 145 Vt. 76, 80, 484 A.2d 911 (1984); Vermont National Bank v. Dowrick, 144 Vt. 504, 510, 481 A.2d 396 (1984); Giroux v. Lussier, 127 Vt. 520, 523, 253 A.2d 151 (1969); Mitchell v. Aldrich, 122 Vt. 19, 23, 163 A.2d 833 (1960). See In Re Kelton Motors, Inc., 127 B.R. 548, 552 (D.Vt. 1991) (Parker, J.). As the Supreme Court held in Giroux v. Lussier, supra:

"The law protects man's interest in reasonable expectations of economic advantage. One who unjustifiably interferes with the contract of another is guilty of a wrong and must pay for that mischief."

127 Vt. at 523.

Trepanier, supra, applied the doctrine of an employment-at-will context, holding:

In order "to be liable for interference with a contractual relationship, the defendant must have intentionally and improperly induced or caused [a person] not to perform under its contract with the plaintiff." [Citation omitted.] This tort provides protection even to contracts terminable at will. [Citation omitted.] The intent element is satisfied even "if the actor does not act with the desire to interfere with the contract but knows that interference will be substantially certain to occur as a result of his or her action."

155 Vt. at 268. The doctrine does not apply if there is an acceptable purpose behind the interference, and interference is therefore not improper if it results from "honest advice." Id.

The Restatement makes it clear that one who intentionally causes a third person not to perform a contract or enter into a prospective contract by giving advice acts non-tortiously only if the advice is truthful and honest. Restatement (Second) of Torts §772.

This doctrine is most often used in employment termination cases by claiming that a co-employee or a supervisor intentionally interfered with plaintiff's employment contract with his employer.

This tort is particularly useful to plaintiff's attorneys because the Vermont Supreme Court has made clear that any justification for interference with a contract is an affirmative defense, to be proven by the defendant:

[I]t is clear that in Vermont, any justification for an intentional interference with a person's contractual relation with another must be set forth and proved by the defendant as an affirmative defense.

Payne v. Rozendaal, 147 Vt. 488, 496, 520 A.2d 586 (1986).

C. Defamation

The standard for defamation in an employment case was set forth by the Vermont Supreme Court in Crump v. P & C Food Markets, Inc., 154 Vt. 284, 576 A.2d 441 (1990). These elements are:

"(1) a false or defamatory statement concerning another; (2) some negligence, or greater fault, in publishing the statement; (3) publication to at least one third person; (4) lack of privilege in the publication; (5) special damages, unless actionable per se; and (6) some actual harm so as to warrant compensatory damages."

154 Vt. at 291 (quoting previous Vermont cases). The court in Crump also noted that the First Amendment to the United States Constitution has modified the elements of defamation in cases where the plaintiff is a "public figure" or "possibly, if the defendant is engaged in the dissemination of information to subscribers or the general public." The modifications to the defamation doctrine applicable in the cases of a public figure or a public official are beyond the scope of this article, but this issue was discussed by the Vermont Supreme Court in Palmer v. Bennington School District, 159 Vt. 31, 615 A.2d 498 (1992).

In Lent v. Huntoon, 143 Vt. 539, 470 A.2d 1162 (1983), the Vermont Supreme Court undertook a thorough review of the law of defamation. The Court upheld in that case a $40,000.00 compensatory and punitive damages verdict, based upon a letter sent by the defendants to their customers claiming that plaintiff had been discharged for "sound business reasons", plus additional clearly slanderous verbal statements concerning plaintiff (including allegations that he had a criminal record "a mile long", and had stolen merchandise from the defendants). Id. at 544-45. The Vermont Supreme Court held:

In the appropriate circumstances we recognize that libel per se may be found either solely from the writing or from the writing together with extrinsic evidence. Similarly the question of whether an ambiguous writing is defamatory or not is a jury question under either set of circumstances.

Id. at 548 (emphasis added). Given the confusion in the use of the terms "defamation per se" and "defamation per quod", the Vermont Supreme Court urged the future use of the terms "libel as a matter of law" or "slander as a matter of law" in cases in which the trial court preliminary determines that the communication was defamatory on its face, without the necessity of extrinsic evidence being provided. If extrinsic evidence must be provided, it is a jury question as to whether the writing is defamatory.

Defamation is used most frequently in employment termination cases in two ways. First, an argument is made that a co-employee or the employee's supervisor defamed the employee to other persons within the employing entity. Such communications are likely to be conditionally privileged, but are not likely to be absolutely privileged.

A conditional privilege is overcome by a showing of malice. Crump explained that malice consists of two types:

For the purposes of clarity in this discussion, we will use the following full-phrase definitions for each type: "knowledge of the statement's falsity or with reckless disregard of its truth," id, or "conduct manifesting personal ill will, reckless or wanton disregard of plaintiff's rights, or carried out under circumstances evidencing insult or oppression," id. at 550, 470 A.2d at 1170. The first type of malice may be inferred.

154 Vt. at 293. Accordingly, in order to prevail, the plaintiff must prove malice on the part of the publisher of the defamation, within the definitions set forth in the Crump case.

Second, the issue of defamation arises frequently when the reasons for the termination are communicated to a future potential employer. The "leading edge" area of defamation law in the employment context is whether the requirement that defamation be "published" can be dispensed with in the employment context, since an employee may be compelled to publish the reason himself to a new employer, because new employers usually want to know why the previous employment terminated. See generally, Blythe, Workplace Defamation: Public Policy, Compelled Self-Publication, and the Vermont Constitution, 16 Vt.L.Rev. 341 (1991).

If intentional action is alleged, and the action does not otherwise fit within one of the established torts, an argument can be made that the wrong should still be compensable. The Restatement (Second) of Torts sets forth the following rule:

One who intentionally causes injury to another is subject to a liability to the other for that injury, if his conduct is generally culpable and not justifiable under the circumstances. This liability may be imposed although the actor's conduct does not come within a traditional category of tort liability.

Restatement (Second) of Torts §870. See also, e.g., Porter v. Crawford & Co., 611 S.W.2d 265, 268-72 (Mo.Ct.Ap. 1981), which sets forth a complete discussion of the development of this tort, and cites the seminal cases in its development. This tort is sometimes referred to as the "prima facie tort" or the "innominate tort." Comment a of Restatement §870 states that this section:

is intended to serve as a guide for determining when liability should be imposed for harm that was intentionally inflicted, even though the conduct does not come within the requirements of one of the well established and named intentional torts.

As far as the author has been able to determine, the Vermont Supreme Court has not yet had an opportunity to refer to the principles set forth in Section 870 of the Restatement, nor the line of cases discussed in Porter v. Crawford & Co., supra. It would be a very unusual case in which intentional conduct is alleged, and there has been no violation of one of the established torts. Nevertheless, if it is necessary to rely upon the doctrine of "prima facie tort", it is likely that the Vermont Supreme Court -- if faced with a proper case -- would adopt the principles set forth in the Restatement.

Article 4 of the Vermont Constitution states:

Every person within this state ought to find a certain remedy, by having resource of the laws, for all injuries or wrongs which he may receive in his person, property, or character . . . .

This constitutional provision is additional support for the proposition that if plaintiff has been wronged, he is entitled to receive damages, whether or not the wrongful conduct fits into the parameters of a traditional common law tort. This was one of the factors relied upon by the Missouri Court of Appeals in Porter v. Crawford & Co., supra:

The concept is consistent with the mandate of our organic law that there should be a remedy for every injury. Mo. Const. Art. I, §14.

611 S.W.2d at 272.

Similar constitutional arguments have been raised before the Vermont Supreme Court on a number of occasions, but the Court has not found it necessary to deal with the issue directly. For example, in Wolfe v. Yudichak, 153 Vt. 235, 571 A.2d 592 (1989), the Court found that the Vermont Worker's Compensation Act did not bar a claim by a member of the Norwich University fire brigade against Norwich University. Article 4 of the Vermont Constitution was raised, but the issue did not need to be reached by the Court. Id. at 238. The due process aspects of Article 4 have been relied on. Vincent v. Vermont State Retirement Bd., 148 Vt. 531, 534 n.2, 536 A.2d 925 (1987). A full discussion of Article Fourth of the Vermont Constitution, and its application to Vermont law of wrongful employment termination is set forth in Blythe, Workplace Defamation: Public Policy, Compelled Self-Publication, and the Vermont Constitution, 16 Vt.L.Rev. 341 (1991).

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¹The Restatement also defines a separate, although somewhat related, tort for intentional infliction of emotional distress in which illness or bodily harm results. Restatement of Torts (Second) §312. The parameters of this tort should also be explored, in a case in which illness or bodily injury results.