No Wrongful Discharge Claim For Firing Of Employee/Shareholder In Retaliation For Her Exercise Of Her Statutory Inspection Rights

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You probably know that North Carolina is an employment-at-will state. That means that in the absence of any employment contract, you can be fired from your job at any time, for good reason, no reason at all, or even a bad reason.

There's a skinny exception to that rule: that an employee cannot be terminated for a purpose that contravenes public policy. So here's a head-scratcher for you: can a company terminate an employee for exercising her statutory right as a shareholder to inspect the company's books and records?

That was an issue before the Business Court in Brady v. Van Vlaanderen, 2013 NCBC 37, in which the Plaintiff, a minority shareholder and employee of a corporation called United Tool, said she was terminated in retaliation for attempting to exercise her shareholder rights to inspect the corporation's records.

Judge Gale dismissed her wrongful discharge claim in an Order last week, relying on two out-of- state cases. He said he would not "adopt an additional public policy exception to North Carolina's terminable at will doctrine." Op. ¶31.

Knowledgeable North Carolina readers of this blog might say "but what about Meiselman?"

For non-North Carolina readers of this blog (like my dad) , and those otherwise ignorant of the North Carolina Supreme Court's important decision in  Meiselman, Meiselman v. Meiselman, 309 N.C. 279, 307 S.E.2d 551 (1983) (probably including my dad), that case holds that a shareholder may not be treated by the corporation in a manner contrary to her "reasonable expectations."

Judge Gale indeed did take Meiselman into account, and said that "Plaintiff should pursue her claim for salary and benefits, if at all, through her Meiselman claim." Op. ¶31.

No wrongful discharge claim for being retaliated against for exercising her inspection rights, but a Meiselman claim for the same bad conduct by the corporation. So that's six of one, half a dozen of the other, right? I'm not so sure. Let me know what you think.

 

Topics:  At-Will Employment, Employment Contract, Hiring & Firing, Retaliation, Termination

Published In: Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Brooks Pierce | Attorney Advertising

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