Thursday, October 4, 2007

How narrow is the scope of the public policy tort in Ohio?

Just as it seemed that Ohio courts were narrowing the scope of the wrongful discharge public policy tort, they toss a curve ball. Hycomp, Inc., a manufacturer of airplane engine parts, terminated David Zajc, one of its quality control managers, after he refused to ship a part he deemed either noncompliant with contract specifications or had quality issues. Zajc claimed that his termination jeopardized the clearly defined public policy found in the Uniform Commercial Code, the Ohio Products Liability Act, and federal aviation regulations. The trial court disagreed and dismissed Zajc's claim on Hycomp's motion for summary judgment. The Cuyahoga County Court of Appeals, however, reversed that dismissal. It agreed with Zajc that the UCC (which permits a buyer to reject nonconforming products), the Products Liability Act (which imposes strict liability where the risks exceed the benefits of a product design), and federal aviation laws and regulations (which authorize the FAA to regulate the production of aircrafts and provide for a inspection system for subcontracted parts). According to the Court, it is irrelevant that those laws do not expressly prohibit Zajc's termination, but that it is enough that the termination places those public policies in jeopardy, notwithstanding that Zajc never complained, but merely refused to carry out his bosses directive to ship the at-issue parts.

The dissent argues that Zajc's claim is nothing more than a back door whistleblower claim, that there is no evidence that Zajc complained about any safety concerns, and that even if he did, he failed to comply with the mandatory prerequisites of the Whistleblower Act. In the words of the dissenting Judge Gallagher:

Absent facts demonstrating a clear safety concern, I do not find any clear public policy expressed in the above statutes that would be jeopardized by the termination of an employee who disagrees with his employer about whether a part is nonconforming or defective and then disobeys instructions to ship the goods.... In this case, Zajc is asking us to find a clear public policy that an employer cannot discharge an employee who disagrees about the quality of parts and refuses to ship the parts without any showing that public safety is being endangered. I do not believe that Zajc has shown that the narrow public policy exception to the employment at-will doctrine should be extended to the limited facts of this case.

Those who are regular readers of this blog will not be surprised that I think the dissent has the better of the argument. The tougher question is how to interpret the implications of this decision. For the past several years, we've seen a tightening of the public policies that will support a wrongful discharge claim. The Zajc case, though, seems to open up a can of worms by permitting employees to shoehorn a termination into a tangentially implicated statute. For employers, the bottom line is to make employment decisions based on legitimate, non-discriminatory, non-retaliatory business reasons. Companies should never fail to take a legitimate employment action out of a fear of being sued. Cases like Zajc, however, certainly inject a little more uncertainty into the process for companies and for the lawyers advise them.

A copy of Zajc v. Hycomp, Inc. is available for download here.

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