By now, most employers recognize the risk of a wrongful discharge claim arising from an employee's dismissal for a reason that violates state public policy - typically, a discharge for the employee's performance of a legal duty, the employee's exercise of a legal right, or an employee's refusal to perform an illegal act. When called upon to do so, courts have sometimes extended these public policy concepts to adverse employment actions other than discharges. (Some court decisions in Colorado and Arizona have questioned whether the public policy exception to at-will employment should be expanded to cover actions other than dismissals.) In the latest case to speak to the subject, the Idaho federal district court recently recognized a public policy cause of action for an employee who was not fired, but arguably was constructively discharged. Hurst v IHC Health Svs, Inc, 4:10-cv-00387-BLW (D. Idaho, Sept. 15, 2011).
In Hurst, an employee who worked on a full-time basis at a clinic affiliated with a hospital, and who also worked on-call approximately three times a month at the hospital, was removed from her clinic work after she became involved in a dispute as to whether the clinic's office manager was qualified to perform patient IV-line maintenance. She kept her part-time on-call work at the hospital, but the loss of her primary assignment in the clinic resulted in her hours and income being cut by approximately 90%. She then quit.
The hospital's argument that the employee had no legal claim because her employment with the hospital continued was rejected. The federal court, projecting what the Idaho Supreme Court would decide if it were presented with the question, held that the cuts in plaintiff's hours and pay were so drastic, they were tantamount to discharge under a constructive discharge theory. The Court then found the evidence sufficient to support a public policy wrongful constructive discharge claim. To hold otherwise, the Court said, would be to invite an unscrupulous employer "who wishes to punish an employee for engaging in some form of protected activity, to act without legal consequence so long as the employee is offered some form of continued employment - no matter how insignificant."
The Court expressly reserved comment on whether the Idaho Supreme Court would recognize demotions, transfers or cuts in working hours as actionable under the public policy theory.