Virginia Supreme Court Holds that Individuals May Be Held Personally Liable for Wrongful Discharges

by Saul Ewing LLP
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Summary

States are beginning to permit wrongful discharge claims against individuals, putting supervisors and managers at risk for personal liability.

What Happened

Earlier this month, the Virginia Supreme Court ruled that individuals may be held personally liable for wrongful discharge claims. Specifically, the Court held in VanBuren v. Grubb that plaintiffs may assert a common law tort claim of wrongful discharge in violation of Virginia public policy against individuals who — despite not being the actual "employer" — participated in the wrongful discharge. This means that supervisors and managers are now at risk for individual liability.

Several other jurisdictions permit wrongful discharge claims to be asserted against individuals in some circumstances, including the District of Columbia, Arizona, Iowa, New Jersey, Pennsylvania, and West Virginia. In contrast, most federal employment laws, such as Title VII of the Civil Rights Act of 1964 ("Title VII"), the Age Discrimination in Employment Act, the Family and Medical Leave Act and others do not allow individuals to be held personally liable for an unlawful discharge claim.

Background

The plaintiff, a former nurse at Virginia Highlands Orthopedic Spine Center LLC, alleged that her supervisor made a series of unwanted sexual advances toward her. According to the plaintiff, after she refused the sexual advances, her supervisor, Dr. Stephen A. Grubbs, terminated her employment. The plaintiff further alleged that she was offered five weeks of severance pay "to remain silent about the sexual harassment she had endured."

Following her termination, the plaintiff filed suit in the United States District Court for the Western District of Virginia, asserting two claims: (1) gender discrimination in violation of Title VII; and (2) common law claim of wrongful discharge in violation of Virginia public policy. In support of her common law claim, the plaintiff, who was married, argued that she was fired for refusing to engage in criminal conduct: adultery, and open and gross lewdness and lasciviousness. According to the plaintiff, her termination violated the Virginia public policy as reflected in the Virginia criminal code.

After the lawsuit was filed, Dr. Grubbs moved to dismiss the common law claim, arguing that he could not be held personally liable for a wrongful discharge claim. The district court agreed, and granted the motion to dismiss. The plaintiff then appealed to the federal Court of Appeals for the Fourth Circuit. However, instead of deciding the issue regarding individual liability, the Fourth Circuit "certified" — or transferred — the individual liability question to the Virginia Supreme Court to decide. The Fourth Circuit certified this question because it was unable to predict how the Virginia Supreme Court would rule on this issue.

While Virginia has long recognized a "public policy" exception to the employment at-will doctrine, this exception has been narrowly construed. Under the public policy exception, a plaintiff may assert a common law wrongful discharge claim, so long as the discharge violated Virginia public policy. Typically, the plaintiff argues that he/she was terminated for refusing to engage in criminal conduct, and that the discharge violated the public policy as reflected in the Virginia criminal code. Prior to VanBuren, public policy (or "Bowman") claims could only be asserted against the employer, not individuals. In VanBuren, however, the Virginia Supreme Court held that individuals, under certain circumstances, may be held personally liable for a wrongful discharge in violation of Virginia public policy.

In order to impose personal liability, the employee must actually "participate" in the wrongful discharge. As the Virginia Supreme Court stated in VanBuren, the employee's "personal actions [must] be shown to have violated the relevant public policy." While it is unclear what level of "participation" is necessary in order to trigger individual liability, managers and supervisors will most likely be the targets of wrongful discharge claims. In fact, the Virginia Supreme Court in VanBuren explicitly referred to "supervisors" and "managers" as potential targets of such claims.

What it Means for Employers

Based upon VanBuren, employers are no longer the sole targets of wrongful discharge lawsuits. Individuals who "participated" in the wrongful discharge of an employee, i.e. managers and supervisors, may also be targeted. Because the Court did not provide much guidance on the level of participation needed to impose personal liability, there will be much confusion — and disagreement — among the courts regarding this issue, which only increases the likelihood of more litigation.

Finally, it is important to emphasize that VanBuren only addressed common law wrongful discharge claims under Virginia law. The Court's holding did not address, and had nothing to do with, federal employment law — which differs significantly on the issue of personal liability for wrongful discharges.

For more information on this subject, please contact Henry A. Platt or Brett S. Covington.

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Saul Ewing LLP
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