Employment Law Robert T

University of Richmond Law Review Volume 25 | Issue 4 Article 11 1991 Annual Survey of Virginia Law: Employment Law Robert T. Billingsley Thomas J. Dillon III Follow this and additional works at: http://scholarship.richmond.edu/lawreview Part of the Labor and Employment Law Commons Recommended Citation Robert T. Billingsley & Thomas J. Dillon III, Annual Survey of Virginia Law: Employment Law, 25 U. Rich. L. Rev. 759 (1991). Available at: http://scholarship.richmond.edu/lawreview/vol25/iss4/11 This Article is brought to you for free and open access by the Law School Journals at UR Scholarship Repository. It has been accepted for inclusion in University of Richmond Law Review by an authorized editor of UR Scholarship Repository. For more information, please contact [email protected]. EMPLOYMENT LAW Robert T. Billingsley* Thomas J. Dillon, III** I. INTRODUCTION This article surveys the judicial and legislative developments in Virginia employment law between June 1990 and June 1991. De- velopments in the areas of worker's compensation and unemploy- ment compensation, each of which has its own distinctive body of law, are outside the scope of this article. During the period covered by this article there were few signifi- cant judicial developments in the area of employment law. Several cases dealt with the topic of wrongful discharge, with both the Su- preme Court of Virginia and Virginia's circuit courts adding to the growing body of law in this area. The courts also continued to wrestle with the reasonableness test for covenants not to compete. But, the most extensive developments in the area of employment law area occurred in the legislative arena. The Virginia General As- sembly adopted a number of legislative changes to the Code of Vir- ginia ("Code") which affect Virginia employment law and practice. II. JUDICIAL DEVELOPMENTS A. Wrongful Discharge Litigation With its decision in Falls v. Virginia State Bar,' the Supreme Court of Virginia finally resolved a debate that had been raging among Virginia employment law specialists for a number of years. The debate concerned the applicability of the statute of frauds2 to * Principal, Hirschler, Fleischer, Weinberg, Cox & Allen, P.C., Richmond, Virginia; A.B., 1976, College of William and Mary; J.D., 1980, The T.C. Williams School of Law, University of Richmond. ** Associate, Hirschler, Fleischer, Weinberg, Cox & Allen, P.C., Richmond, Virginia; B.A., 1987, Richmond College, University of Richmond; J.D., 1990, The T.C. Williams School of Law, University of Richmond. 1. 240 Va. 416, 397 S.E.2d 671 (1990). 2. The Virginia statute of frauds provides, in pertinent part, that "[u]nless a promise, contract, agreement, representation, assurance, or ratification, or some memorandum or note thereof, is in writing and signed by the party to be charged or his agent, no action shall 759 760 UNIVERSITY OF RICHMOND LAW REVIEW [Vol. 25:759 an oral employment contract providing for "just cause" dismissal. The issue was first addressed by the court in Silverman v. Bernot.3 In Silverman, an employer had orally promised his employee that if she would remain in his service until she reached age sixty-two or until his death, whichever occurred first, she would receive a pension for the rest of her life. The court first observed that the crucial inquiry under the statute of frauds is whether a contract could be performed fully on either side within a year from its effective date. It then held that the contract was not invalidated by the statute of frauds since it could have been performed fully within a year after its effective date - for example, if the employer had died.4 The court thus distinguished between termination of a contract by operation of law and completion by performance. The court also suggested that the statute of frauds defense might have succeeded if the contract had provided only for the employee to work for the employer until age sixty-two.5 Thereafter, in Frazier v. Colonial Williamsburg Foundation," the United States District Court for the Eastern District of Vir- ginia held that the statute of frauds did not apply to an oral "just cause" employment contract because such a contract "could be performed within one year since, for example, [the employee] could have been discharged for cause within a year of having been hired."'7 Although the Fourth Circuit ultimately rejected this hold- ing because of the district court's failure to observe the distinction made in Silverman between "termination by operation of law" and 8 "completion by performance", Frazierprovided a glimmer of hope to plaintiffs seeking to overcome the statute of frauds defense. All sides anxiously awaited the decision of the Supreme Court of Vir- ginia in Falls v. Virginia State Bar. be brought ... [u]pon any agreement that is not to be performed within a year ... " VA. CODE ANN. § 11-2(8) (Cum. Supp. 1991). 3. 218 Va. 650, 239 S.E.2d 118 (1977). 4. Id. at 654-55, 239 S.E.2d at 121. 5. Id. at 654-55, 239 S.E.2d at 121-22. 6. 574 F. Supp. 318 (E.D. Va. 1983). 7. Id. at 320. 8. In Windsor v. Aegis Servs., Ltd., 691 F. Supp. 956 (E.D. Va. 1988), aff'd per curiam, 869 F.2d 796 (4th Cir. 1989), Judge Ellis of the United States District Court for the Eastern District of Virginia rejected the Frazierholding and held that an oral "just cause" employment contract is unenforceable under the statute of frauds because it cannot be performed fully within a year. In a per curiam opinion, the Fourth Circuit subsequently affirmed and adopted Judge Ellis' decision. Windsor v. Aegis Servs., Ltd., 869 F.2d 796 (4th Cir. 1989) (per curiam). 1991] EMPLOYMENT LAW In Falls, the former Director of Administration for the Virginia State Bar alleged that he had been hired by the Bar with verbal assurances that his employment would continue "as long as his performance was satisfactory."9 When Falls was subsequently discharged, allegedly without cause, he filed a suit against the Bar alleging breach of his employment contract. The trial court con- cluded that the statute of frauds barred enforcement of Falls' oral employment contract, thus sustaining the Bar's demurrer and dis- missing Falls' action. 10 On appeal, Falls argued that the statute of frauds was inapplica- ble because his employment contract was capable of being performed within a year, upon the occurrence of any one of three events: his death, resignation or discharge for cause." The Su- preme Court of Virginia, however, rejected Falls' argument. Recal- ling the distinction drawn earlier in Silverman between termination of a contract by operation of law and completion of a contract by performance, the court stated: Although occurrence of any of the three contingencies mentioned by Falls would have terminated his performance during the first year of his employment, the parties' contract did not expressly provide that the occurrence of any of these contingencies would consti- tute full performance. Absent such an agreement, upon occurrence of any of those contingencies, Falls' contract would end, not by performance, but by termination .... Because Falls' contract contains no such provision providing for full performance in the event of those contingencies, the statute of frauds is applicable."2 Another recent decision addressed the applicability of the "public policy" exception to the employment-at-will doctrine. In the 1985 decision of Bowman v. State Bank of Keysville,3 the Su- preme Court of Virginia recognized a "narrow exception" to the employment-at-will doctrine for discharges in violation of public policy. Because the court reaffirmed the validity of the employment-at-will doctrine and declined to expand the public policy exception so as to provide redress for purely private rights or inter- 9. Falls, 240 Va. at 418, 397 S.E.2d at 672. 10. Id. at 417, 397 S.E.2d at 672. 11. Id. at 418, 397 S.E.2d at 672. 12. Id. at 419, 397 S.E.2d at 672-73. 13. 229 Va. 534, 331 S.E.2d 797 (1985). UNIVERSITY OF RICHMOND LAW REVIEW [Vol. 25:759 ests," Virginia courts have been unwilling to apply the public policy exception except in cases where the discharge was either in response to the employee's refusal to commit an unlawful act or a result of the employee's exercise of a statutory right. Despite the narrowness of the public policy exception to the employment-at-will doctrine, discharged employees continue to try to bring their cases within the exception. For example, in Bussey v. Arlington County Residences, Inc.,15 an at-will employee claimed that her discharge from her job of placing mentally retarded per- sons in group homes was in response to her refusal to make placements "contrary to the federal and state regulations regarding placements of retarded individuals."Is Observing that an "employee asserting a wrongful discharge as against public policy must be a member of the class to be protected by a public right established by a law", 17 the Circuit Court of Arlington County held that the employee had failed to identify any established public policy or specific law violated by her dismissal. 8 Accordingly, the circuit court granted the employer's motion for summary judgment and dismissed the employee's wrongful discharge claim. While every employment relationship is contractual in nature,", either party to an at-will employment relationship may end the relationship at any time for any reason, or for no reason at all, upon giving reasonable notice to the other.2 0 Thus, a wrongful discharge claim is a cause of action in tort rather than contract.

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