Retaliatory Discharge Case in Indiana Rules in Favor of Employee

Retaliatory Discharge Case in Indiana Rules in Favor of Employee

It is well-established that Indiana is an “employment at-will” State. Generally speaking, this means that an employee who is not employed pursuant to a written contract can be fired for any reason at any time, so long as the termination does not violate statutory protections. Conversely, an employee can voluntarily terminate his employment at any time and for any reason and the employer has no cause of action against him for doing so.

However, in Indiana, there is a line of cases going back to the Indiana Supreme Court’s 1973 decision in Frampton v. Central Indiana Gas Co., which established a narrow exception to the employment at-will rule. The exception states that an employee has a cause of action against his employer if he is discharged in retaliation for exercising his statutorily-conferred right to seek worker’s compensation benefits. In other words, if an employee can establish that he was fired in retaliation for filing a worker’s compensation claim, the employee can bring a cause of action for wrongful discharge against the employer.

The Frampton decision established that an employee who is actually terminated has that right of action. A recent case from the Indiana Court of Appeals entitled Randy Tony v. Elkhart County found that the employee also has a cause of action for constructive discharge. In a constructive discharge case, an employee is not actually terminated, but his working conditions are so intolerable that the employee reasonably feels that he has no option but to resign.

The Tony case has a long history referenced in the Appeals Court decision. Tony was employed by the Elkhart County Highway Department from 1993 to 2002. Tony received an injury to his right arm.

While being treated, plaintiff alleged that his supervisor referred to him in derogatory terms such as “trouble boy” and “winey butt.” Another supervisor also called him a “faker.” He was told not to make complaints to people “up the line.” Once he was released from his treatment, he was assigned permanent lifting restrictions, and was returned to work. Tony alleged that he was consistently assigned jobs that violated those restrictions. Apparently, this case did not ripen into a worker’s compensation claim, but the Court was very interested in the allegations plaintiff made about his supervisors.

In 2001, plaintiff had another injury when he was struck by a vehicle while performing maintenance on the highway. He was again treated and released with restrictions. Tony claimed again that his supervisors consistently assigned him work in violation of those restrictions. Ultimately, his supervisor directed him to service a vehicle which required such strenuous tasks as heavy lifting and crawling underneath his vehicle, in violation of his restrictions. After approximately an hour, Tony walked off the job and never returned to work. It is this injury which gave rise to his constructive discharge claim. In that case, in 2006 the Court of Appeals held that an employee may state a cause of action for constructive retaliatory discharge if he or she has been forced to resign as a result of exercising his or her statutory right to worker’s compensation benefits. In other words, the Court of Appeals held that the employee had a valid cause of action for constructive discharge (as opposed to actual discharge) if he is retaliated against for exercising his statutory right to seek worker’s compensation benefits.

Once the Court of Appeals found that plaintiff had a cause of action for retaliatory discharge, he filed suit against the employer. The trial court granted summary judgment in favor of the employer, finding that plaintiff had not been constructively discharged. The plaintiff appealed the case to the Indiana Court of Appeals, which reversed the trial court decision. The Appellate Court conducted an extensive factual review, and sited the prior incidents where plaintiff allegedly had been called names by his supervisors, and had been assigned to jobs which violated his work restrictions.

The Appeals Court also took note of a recent Supreme Court Decision on retaliatory discharge. In that Decision, the Indiana Supreme Court agreed with the Appeals Court in plaintiff’s 2006 case where the Appeals Court held that the plaintiff had a viable action for constructive retaliatory discharge. The Indiana Supreme Court gave the following standard: “The constructive discharge doctrine acknowledges the fact that some employee resignations are involuntary, and further presents employers who wrongfully force an employee to resign to escape any sort of liability for their actions.” Constructive discharge arises when an employer purposefully creates working conditions that are so intolerable that an employee has no other option but to resign.

Using that standard, the Appeals Court noted that, following the two worker’s compensation claims filed by plaintiff, plaintiff alleged that the employer behaved toward him in a hostile fashion, verbally chastising him, ignoring his work restrictions, and asking him to perform jobs which placed him at risk of further injury. Ultimately, the Court of Appeals concluded that plaintiff was constructively discharged, and ruled in plaintiff’s favor on the wrongful discharge claim.

It is worth noting that the Court cited several cases holding that an employee must not be unreasonably sensitive to his work environment. However, when the work environment actually imposes a grave threat to the employee’s physical activity, that environment can be considered intolerable, and will justify a constructive discharge claim. The standard is whether the employee is subjected to “unreasonable risk of physical harm.”

For Indiana employers, this case is important in several respects. First, it demonstrates that the Court looks closely at specific allegations made by plaintiffs against their employers. Second, it shows that the Court is sensitive to allegations by employees that they were forced to violate their work restrictions, as well as allegations that they were verbally abused because of making a worker’s compensation claim. Finally, it establishes that an employee does not have to actually be fired in order to have a cause of action for wrongful discharge. If an employee is made to work in conditions that are intolerable, given his work restrictions, an employer can still be held liable for wrongful discharge even if an employee walks off the job.

© Copyright 2010 McCray Lavallo Frank & Klingler. This article originally appeared in the firm’s Workers’ Compensation Newsletter (Winter 2010). Reprinted with permission.