Avoiding a Terminal Case of Wrongful Discharge

By Lovitz, Hyman | Risk Management, January 1990 | Go to article overview

Avoiding a Terminal Case of Wrongful Discharge


Lovitz, Hyman, Risk Management


Avoiding a Terminal Case Of Wrongful Discharge

Between 1982 and 1987, the number of wrongful discharge cases in this country doubled. According to a study released in February 1989 by the Bureau of National Affairs, damages were awarded in 78.9 percent of all defamation claims against former employers, and 25,000 such cases are now pending. Average compensation in California, for example, has been $388,500, although awards have soared to nearly $2 million and have been conferred across the nation.

Clearly, employment termination is an area of concern to everyone--employers, employees and risk managers. In the last five years, 4.7 million people, having held their jobs for three years or more, have been dismissed from employment. TIME magazine recently stated, "The dominant mood in a lot of American companies is one of fear and anxiety. Loyal corporate soldiers used to believe their employers would reward good work with job security, full benefits and decent pay. Now, they have serious doubts about whether they can expect anything beyond the next paycheck."

The article cited "drastic cost-cutting programs and massive layoffs" due to "ferocious global competition, unfriendly takeovers and unprecedented new levels of corporate debt." It said further that this leads to a determined slashing of labor costs bought with "discarded traditional notions about job security, compensation and seniority."

A result of this tumultuous situation is that a corporation's president and managers will, for the first time, align with workers against the corporation in a wrongful discharge situation. It has been traditional, in any company dispute, for management to side with the corporation against the labor force. But this is no longer the case. In the current, uncertain climate anyone can be fired for just cause or no cause. Each worker, like each company, on occasion needs to be concerned about how to "save itself." And yet, each side needs the other, advancing the possibility of a mutually-beneficial compromise.

Until recently, contract law has been generally applied to employment matters. These matters were controlled, in turn, by the concept of "terminable at will," which means an employer is free to terminate the oral employment contract at any time. The employee could also choose to leave the firm at any time. This does not appear to be the best way to do business--for either the corporation or the employee.

In recent California courtroom practice, the application of contract law has led to employees first being allowed punitive damages for breach of good faith and fair dealing in wrongful discharge suits. It also has led to punitive damages being rescinded and replaced by compensatory damages only. This is in view of a recent California Supreme Court ruling that held the employment relationship is fundamentally contractual; therefore, only contractual remedies should be available to repair the contract "paper" tear.

While the latter application of contract law was a significant victory for employers in California, it merely brought the state in line with others around the country. Contract law is essentially negative. It enforces whatever the parties in question agree upon and refuses to question the agreement's terms, fairness or the relative strengths of each party. Contract law says only that non-written contracts are "terminable at will." This concept represents an easy way out for the judicial system. However, employment issues deserve specific decisions regarding job security, seniority and severance rights and all other contestable aspects of the employment relationship. Unfortunately, this is an undertaking our court system has successfully avoided so far.

Public awareness of the employer-employee relationship has been limited to such naive beliefs that an employer must have just cause for termination, and that seniority means preferential treatment in a cutback situation. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Avoiding a Terminal Case of Wrongful Discharge
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.