Virginia Business Litigation Lawyer Blog

In Virginia, employment is presumed to be at-will, but that presumption can be rebutted with evidence that the employment is for a specific period of time or that it can be terminated only for just cause. Virginia law says that contracts are to be construed as written and if the terms of the contract are clear, then those terms are to be given their plain meaning. A separate writing that is referenced in a written contract is construed as part of that agreement only if it is referred to with specificity and there is some expression of an intent to incorporate its terms into the agreement. As explained in a recent opinion by Judge Bruce D. White of Fairfax, "in order to incorporate the provisions of another document into the employment contract, the plain language of the employment contract must clearly reference and incorporate the terms of the document being incorporated."

Johnson v. Versar was a lawsuit brought by William Johnson, Alexis Kayanan and Davy Jon Daniels against their former employer Versar, a government contractor based in Springfield, Virginia, for alleged breach of their employment contracts. They claimed that their employment was not at-will but was for a definite term. They based their argument on the fact that they received certain documents upon accepting employment that referenced Versar's by-laws, which provided that officers "may be removed" by a majority vote of the board of directors. Because a resolution was never passed, they claimed that they were terminated in violation of their employment agreements.

Judge White sustained Versar's demurrer with prejudice and dismissed the case. The Court found that the plaintiffs were at-will employees because the by-laws were not specifically and intentionally incorporated into the employment agreement. None of the offer letters referenced the by-laws, and the accompanying documents that did reference the by-laws did not indicate any intent to incorporate their terms as part of the employment agreement.

The Court went on to say that even if the by-laws were incorporated into the employment contract, the language of the by-laws was not strong enough to overcome the plaintiffs' at-will status. The by-laws only provided for how an officer "may" be removed. The use of that permissive word indicates that the possibilities for removal were not intended to be exhaustive. The by-laws did not provide that the employees could be removed only for just cause or that their employment was for a definite term, so their employment was deemed to be at-will.

A Lincoln-Mercury dealer in the Virginia Beach area has settled a lawsuit filed earlier this year by a former employee who claimed that she was subjected to a campaign of sexual harassment by the dealership's general manager.

On March 4, 2011, Carla Mercado, who worked as a car saleswoman until she was fired in March 2009, sued Lynnhaven Lincoln-Mercury Inc. for sexual harassment, discrimination and retaliation, asserting that Juan Lewis, the general manager, repeatedly groped her and made unwanted sexual advances and suggestions. On October 21, 2011, U.S. District Judge Raymond A. Jackson denied Lynnhaven's motion for summary judgment and its partial motion to dismiss the complaint. Faced with having a jury decide the merits of Ms. Mercado's claims, the parties mutually decided to settle the case on the courthouse steps, the day the trial was scheduled to begin.

According to the complaint, Lewis repeatedly made remarks of a sexual nature to Mercado on the job and asked her to have oral sex with him. On one occasion, according to the complaint, he told her that the only way she would get a promotion is if she performed that sexual act on him. At one time, the complaint reads, he forcibly kissed her. These comments and actions, the complaint says, "were an integral part of Juan Lewis's custom, business practice, and course of dealing with certain women at Lincoln-Mercury, while fulfilling his role as General Manager at the dealership."

Then, the complaint alleges, when Mercado rebuffed Lewis's advances, he and other employees of the dealership "commenced a campaign of retaliatory action" against her, including increasing her Sunday hours, rejecting her "deals" for vehicles and diverting them to other salespeople, and refusing to engage her in conversation. Ultimately, according to the complaint, she was terminated in retaliation for failing to comply with Lewis's sexual demands.

Mercado sued for hostile work environment sexual harassment, quid pro quo discrimination, retaliation, intentional infliction of emotional distress, assault, battery, and wrongful termination in violation of public policy. She sought damages of up to $5 million.

The dealership responded that Mercado was actually fired for not coming to work on Sundays and that it has a policy of treating unexcused absences as equivalent to a resignation. It also responded that at no point did the harassment affect a "tangible employment action" and that it was not sufficiently severe or pervasive to satisfy the law's requirements.

Virginia is a "deferral state" for Title VII purposes, meaning that it has a state law prohibiting discriminatory employment practices and has a state or local agency (e.g., the Virginia Council on Human Rights) authorized to grant relief from such practices. To allege discriminatory employment practices in deferral states like Virginia, prior to filing any lawsuit, an aggrieved employee must exhaust administrative remedies by initiating an EEOC charge within 300 days. Otherwise, the claim will be forever barred. (See 42 U.S.C. § 2000e-5(e)(1)). In a case decided recently by Judge Spencer of the Eastern District of Virginia, a plaintiff found this out the hard way.

In McKelvy v. Capital One Services, LLC, the plaintiff was an African-American Director of IT services, over 40 years of age. After obtaining a "right-to-sue" letter from the EEOC, he sued Capital One, claiming that the removal of his supervisory responsibilities and the failure to promote him was based on his race or his age, and thus violated Title VII's prohibitions against unlawful discrimination in employment. Finding that the alleged discrimination took place more than 300 days before the plaintiff filed his EEOC charge, the court granted summary judgment in Capital One's favor and dismissed the plaintiff's claims with prejudice.

The court also observed that, even if the plaintiff had not failed to exhaust administrative remedies, he could not prevail on his claim because he failed to present supportive facts (beyond his personal belief), to rebut Capital One's assertion that his direct reports were taken away because other associates complained about his leadership style and because of some poor performance appraisals. To survive a motion for summary judgment, a plaintiff must come forward with supportive evidence.

When deciding summary judgment motions in cases involving alleged employment discrimination, courts follow the "McDonnel Douglas" framework, which examines: (1) whether the plaintiff has stated a prima facie case of employment discrimination; (2) whether the employer can propound a legitimate, non-discriminatory justification for the adverse employment action taken against the plaintiff; and (3) whether the plaintiff can rebut the asserted legitimate, non-discriminatory justification with evidence that it is merely a pretext for unlawful discrimination.

To establish the first element--a prima facie case of employment discrimination--the plaintiff was required to come forward with evidence showing that (1) he was a member of a protected group; (2) he applied for the position in question; (3) he was qualified for the position; and (4) he was rejected for the position under circumstances giving rise to an inference of unlawful discrimination. He failed to meet that test, as no evidence was presented showing that race or age played a role in filling these positions. The plaintiff relied instead on his own subjective assessments of his qualifications and job performance. Unsupported speculation, the court held, is not enough to defeat a summary judgment motion.

Virginia employment lawyers who represent plaintiffs are often looking for creative legal theories to help their clients receive justice. Employees seeking redress for perceived wrongful termination face a steep hurdle in the employment-at-will doctrine, under which a private employer, subject to certain exceptions, is free to discharge its employees at any time, for any reason or no reason at all, without incurring civil liability. While it is usually the corporate employer who gets cast in the role of defendant, plaintiffs' lawyers have occasionally tried to impose liability on the individual manager who terminated or discriminated against the employee, usually without much success. A recent decision from the Eastern District of Virginia's Richmond Division, however, opens the door to possible claims of "tortious interference" against the individual bad actor.

Williams v. Autozone Stores, Inc. is a sexual harassment case brought under Title VII of the Civil Rights Act of 1964, which prohibits harassment of employees where the conduct is sufficiently severe or pervasive to create a "hostile work environment," or where the harassing conduct results in a tangible change in an employee's employment status or benefits (such as getting fired). Williams, a former employee of Autozone, claimed that her manager, Willie Pugh, touched her inappropriately and made sexually-charged comments toward her. After asking Pugh to stop, Williams alleges that he wrote her up for nonexistent problems and that she was consequently transferred to a different store and eventually fired. Williams sued Autozone for alleged discrimination, but also sued Pugh himself on the theory that he tortiously interfered with her employment contract with Autozone. Autozone moved to dismiss the claim, arguing that Pugh was an agent of the company and that a company cannot interfere with its own contracts, but Judge Spencer allowed the claim to go forward.

Pugh pointed out that claims for tortious interference with contract require the existence of three separate parties: the two parties to the contract, and a third party who induces one of the two contracting parties to breach the agreement. As an employee of the company, he argued, he and Autozone were the same entity, negating the possibility of a third party. Pugh also pointed out that Williams acknowledged in her complaint that Pugh was an employee acting within the scope of his employment with Autozone.

Judge Spencer responded by noting that the plaintiff's admission in her pleadings that Pugh was an agent of Autozone did not preclude a finding that Pugh acted outside the scope of his employment. A party may plead inconsistent facts, the court held, provided they relate to different claims. Turning to the question of whether Pugh's actions were necessarily the actions of Autozone, the court found that a tortious interference claim could very well be viable even when the interfering party is an employee of one of the contracting parties. The employee would be acting as a third party if his actions were taken outside the scope of his employment, such as if they "arise wholly from some external, independent, and personal motive". If there is doubt as to whether an employee was acting within the scope of his employment, the court held, then the issue should be resolved by the jury, not decided by the judge prior to trial.

The First Amendment protects a public employee from retaliation by his or her employer when the employee speaks out on a matter of public concern. But before discharged government employees go rushing into court to sue the government entity for which they worked, they would be well advised to take advantage of any and all internal grievance processes offered by the government. A recent case decided by Judge Samuel G. Wilson of the Western District of Virginia demonstrates the potential perils of skipping this important step.

In Stickley v. Sutherly, the court laid out current jurisprudence as it applies to a public employer's liability under 42 U.S.C. § 1983. (Section 1983 is a federal statute that creates liability for any local government or government officials who violate a person's clearly-established constitutional rights, such as freedom of speech). Stickley was a police lieutenant in Strasburg, Virginia. Sutherly, the chief of police, demoted Stickley and another officer for violations of department policy. Shortly thereafter, the Northern Virginia Daily (a local newspaper) published an article criticizing Sutherly's personnel practices. Prompted by the article, a member of Strasburg's Town Council asked Stickley about his demotion, and Stickley expressed his dissatisfaction about it. After the councilman confronted Sutherly about Stickley's demotion, Sutherly fired Stickley for insubordination.

Stickley, instead of pursuing the town's official grievance process, filed suit against Sutherly and the Town of Strasburg. Stickley argued that his firing was in retaliation for his exercise of his First Amendment right to speak freely about matters of public concern; namely, the personnel practices of the police department.

With regard to Stickley's complaint against the town of Strasburg, Judge Wilson explained that a municipality may be liable under Section 1983 if the violation of a constitutional right occurred as a direct result of official municipal policy or custom, but that qualified immunity would shield a municipality from such charges if a terminated employee fails to exhaust local appeal procedures available to him. Because Sutherly's decision could have been overturned through an internal appeal process, Sutherly was not a final policy-maker.

Ultimately, because no source of liability under § 1983 could be found against either Sutherly or the Town of Strasburg, the Court dismissed Stickley's suit. The lesson to be learned here is be sure to exhaust all avenues of redress provided by your employer before looking to the courts to protect your rights, especially if you work (or worked) for the government.

Getting fired or laid off is hard enough without your boss trashing your reputation to your co-workers. I receive many calls from prospective clients interested in pursuing their former employer for defamation. Virginia employers, however, have a lot of leeway in what they can say about an employee being considered for termination before they will be liable for slander or libel. Virginia recognizes a qualified privilege against defamation claims where statements by an employer are made in connection with discharging that employee. To overcome that privilege, a plaintiff must prove common law malice by clear and convincing evidence.

Consider the recent Hanover County case of Koegler v. Green, decided on September 1, 2009. Carl Koegler sued his former employer, the Richmond-East Moose Lodge, as well as several of his former co-workers and employers, for defamation. The defendants demurred (i.e., moved to dismiss the case), citing the qualified privilege, and the court agreed with them and dismissed the case. The court emphasized that defamation claims against employers in Virginia will not be permitted to go forward absent strong evidence of malice.

The facts, according to the allegations in the complaint, were as follows: Mr. Koegler was employed by the Lodge in various positions over the years. An audit conducted by the international parent company resulted in Mr. Koegler's termination in 2008. Some of his former coworkers and managers talked to other employees about the firing. The acting Governor of the Lodge, for example, held a staff meeting and discussed what had been said in board meetings about Mr. Koegler and that Mr. Koegler had been suspended for stealing money. Another officer of the Lodge sent emails describing Mr Koegler as having "questionable character." Mr. Koegler sued for defamation and harm to his reputation.

The court held that, to state a claim for defamation, the plaintiff would have to allege sufficient facts to enable a reasonable jury to find clear and convincing evidence of "common law malice," defined as "some sinister or corrupt motive such as hatred, revenge, personal spite, ill will, or desire to injure the plaintiff; or what, as a matter of law is equivalent to malice, that the communication was made with such gross indifference and recklessness as to amount to a wanton or willful disregard of the rights of the plaintiff." In the end, the court concluded that Mr. Kroegler had not presented a case sufficient to enable a reasonably jury to find clear and convincing evidence of malice, and dismissed the case.

The Equal Employment Opportunity Commission (EEOC) claims a Kmart Super Center in Norfolk, Virginia, fired a store greeter because he used a cane, in violation of the Americans with Disabilities Act (ADA). In a lawsuit filed in the United States District Court for the Eastern District of Virginia, the EEOC alleges that the employee used a cane to walk and stand due to his spinal stenosis, a physical impairment of his back. His back problems did not prevent him from performing his duties as a greeter. Nevertheless, the suit claims, when he was observed using the cane, Kmart terminated his employment.

Prior to terminating the employee, Kmart allegedly refused to allow him to use the cane, even though his condition made it difficult to stand or walk without one, and his job required both. The EEOC filed the lawsuit only after Kmart refused to settle.

The EEOC is seeking most of the remedies permitted under the ADA, including reinstatement of the employee's job (or placement into a substantially equivalent position), back pay, compensatory damages, and punitive damages for intentional discrimination. The EEOC is also seeking an injunction (as it usually does in the ADA cases it brings) prohibiting discriminatory practices and compelling Kmart to adopt and execute a variety of policies, practices, and training programs to clarify to their employees and the general public that Kmart will takes steps to ensure it does not discriminate against persons with disabilities.

Title I of the ADA requires employers with 15 or more employees to provide qualified individuals with disabilities the same employment benefits and opportunities as everyone else, provided the employers can make any necessary accommodations without experiencing undue hardship. The employment privileges to which the ADA applies include recruitment, hiring, training, compensation, promotions, and even social activities. For more information, see Your Rights as a Disabled Employee.

Proving once again that no good deed goes unpunished, a former employee of BB&T Insurance Services to whom BB&T graciously paid 30 days of severance pay despite terminating his employment for cause--and apparently without requiring the employee to sign a release--sued the company for wrongful termination. On June 17, 2009, however, Judge Wilson of the Western District of Virginia in Harrisonburg had "no hesitancy" in tossing out the case on summary judgment.

The employee's job duties involved identifying, contacting, and providing services to existing and potential new insurance customers. To assist him in performing those duties, BB&T allowed him to use a company laptop with access to confidential files on the company's network. At the time of his termination, the employee had 8 years' worth of sensitive client information stored on his laptop.

While traveling, the employee left the laptop unattended overnight in his vehicle while it was parked in a hotel parking lot. It was stolen. When BB&T learned of the theft, it notified those of its clients affected by the data breach and offered them a credit-monitoring service. These programs cost the company over $24,000.

BB&T fired the employee for "cause," defined in the parties' employment agreement as "termination...for failure of Employee to adhere, after Employee has received written notice from [the Company] of such failure, and been given 30 days in which to cure such failure (if such failure can be cured), in any material respects to written policies, procedures, and the Code of Ethics established from time to time by [the Company]...." BB&T had distributed policies indicating in clear terms that all employees in possession of sensitive company information were obligated to protect the information, which duty included specifically a prohibition against leaving laptops unattended in vehicles.

The court threw out the employee's breach-of-contract case, rejecting his arguments that he was not bound by the parent company's policies, and that even if he were, he should have been given 30 days in which to "cure" the violation. The court found both arguments entirely lacking in merit, writing that no jury could reasonably agree with them.