In a case of first impression, the Virginia Supreme Court has ruled that supervisors and managers can be held individually liable for public policy wrongful discharge under Virginia common law. In VanBuren v. Grubb, No. 120348 (Nov. 1, 2012), the Court held that a former employee of a medical practice could sue her former supervisor individually after he allegedly discharged her for refusing his sexual advances.  

Facts

Angela VanBuren worked as a nurse at the Virginia Highlands Orthopedic Spine Center from 2003 until 2008. She alleged that soon after joining that practice, she was subjected to sexual harassment by her supervisor, Virginia Highlands’ owner Dr. Stephen Grubb.  She alleged that he would “hug her, rub her back, waist, breast and other inappropriate areas, and attempt to kiss her.”  In May 2006, while the two were traveling on business, VanBuren rebuffed Grubb’s advances and told him that “she was not going to have sex with him” and that “he needed to leave.” Finally, in March 2008, after VanBuren had married, Grubb allegedly asked her whether she planned to stay with her husband. VanBuren claimed that when she told him she did, Grubb fired her. 

Wrongful Discharge Suit

VanBuren sued Grubb and Virginia Highlands asserting, among other things, a claim for public policy wrongful discharge under Bowman v. State Bank of Keysville, 229 Va. 534, 331 S.E.2d 797 (1985). She alleged that she had been discharged because she had refused to engage in criminal conduct: adultery and “open and gross lewdness and lasciviousness” in violation of Va. Code §§ 18.2-345 and 18.2-365. 

Grubb moved to dismiss VanBuren’s complaint on the grounds that he was not individually subject to suit.  The district court granted Grubb’s motion, concluding that, if asked, the Virginia Supreme Court would find that wrongful discharge claims by an employee are cognizable only against an employer and not against supervisors or co-employees in their individual capacity.

Appeals Court Decision

On appeal, the Fourth Circuit appeals court, in a rare move, certified the question to the Virginia Supreme Court, which slightly restated the Fourth Circuit’s question as:

Does Virginia law recognize a common law tort claim of wrongful discharge in violation of established public policy against an individual who was not the plaintiff’s actual employer but who was the actor in violation of public policy and who participated in the wrongful firing of the plaintiff, such as in the capacity of a supervisor or manager?

(When an unsettled question of state law is determinative in a case, a federal court has but rarely exercised the authority to “certify” a legal question to the state supreme court.)

High Court Decision

Writing for the majority, Virginia Supreme Court Justice Leroy F. Millette, Jr. reviewed Virginia case law regarding public policy wrongful discharge, a cause of action first recognized in Bowman. Justice Millette noted that VanBuren undoubtedly stated a claim against Virginia Highlands based on her allegation that she was discharged for refusing to engage in criminal conduct; the question was whether Grubb also could be held liable based on VanBuren’s allegations.

The Court ruled supervisors and managers can be held individually liable for public policy wrongful discharge. It acknowledged that public policy wrongful discharge is a “narrow exception” to the at-will employment doctrine. However, the Court rested its holding on the nature of agency relationships, noting that in Virginia “employers and employees are deemed to be jointly liable and jointly suable for the employee’s wrongful act.” The Court also noted that several other states had concluded that individuals could be personally liable for tortious acts committed in an employment setting.

In reaching its holding, the Court rejected Grubb’s argument that “as only the employer has the ability to effect a discharge, the liability must cease there.” Instead, the Court reasoned:

In a wrongful discharge case, the tortious act is not the discharge itself; rather, the discharge becomes tortious by virtue of the wrongful reasons behind it. Where those tortious reasons arise from the unlawful actions of the actor effecting the discharge, he or she should share in liability. Here, VanBuren was fired because she would not give in to Grubb’s unlawful demands. As Grubb was her supervisor and owner of the company, we conclude that, if her allegations are proven, he too should be subject to liability, just as he would be had he engaged in any other tortious conduct.

Finally, the Court noted that “the purpose of the wrongful discharge tort — namely, the deterrence of discharge in violation of public policy — is best served if individual employees in a position of power are held personally liable for their tortious conduct.”   

It is not clear whether the Court’s holding is limited to situations in which the putative defendant is an owner. Although the Court did not unambiguously restrict its holding in this way, and the restated question did not refer at all to ownership, some of the language used in the Court’s opinion implies that ownership or at least a “position of power” was a factor in its decision. On the other hand, the Court’s discussion of general tort theory (“Limiting liability to the employer would follow a contract construct. Wrongful discharge, however, is an action sounding in tort.”) and agency relationships supports the view that any manager or supervisor could be liable for this type of claim. Future cases likely will clarify whether a supervisor or manager who does not have an ownership interest in the employer entity can nonetheless be individually liable for this tort.

Dissent 

Echoing the arguments advanced by individual defendant Grubb, three dissenters agreed with the district court that only an employer can be liable for this tort, because only an employer can wrongfully terminate an employee. The dissenters relied on the fact that public policy wrongful discharge is a narrow exception to the doctrine of at-will employment, and observed that an individual manager who carries out a wrongful discharge acts solely as a representative of the employer. The dissenters, like the majority, cited cases from other jurisdictions holding that an individual supervisor cannot be liable for wrongful discharge. According to the dissenters, because the individual defendant did not, as an individual, owe any legal duty to refrain from unlawfully discharging the plaintiff, he could not be liable to her for this particular tort. 

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VanBuren expands the potential liability of individual supervisors and managers in Virginia to terminated employees, but only in cases where an employer already would be liable because an underlying public policy violation is found. To avoid liability, employers and managers should continue to ensure that all employee terminations are based on legitimate, lawful business reasons and are supported by strong documentation. Moreover, employers and supervisors that apply policies evenhandedly and treat employees with fairness and respect are less likely to be subjected to employment-related claims, and better positioned to effectively defend those claims when they arise.