Belts, suspenders, and overalls–the pointless and harmful growth of wrongful discharge law

September 17, 2015 | By ETHAN BLEVINS

Mr. Burns agonizing over the chaos of modern employment law

The Supreme Court of Washington is on a crusade to protect workers from evil bosses even when it’s unnecessary and hurts everyone.

Washington, like most states, has an at-will employment rule. Employers and employees are free to terminate an employment relationship at any time. This at-will rule promotes freedom of contract, economic liberty, and freedom of association.

The rule also benefits both employers and employees. Each party is protected by the self-interest of the other, because each will pay a high price for exercising the right to fire or resign. Individual ambition thus serves the interests of both employer and employee. The best answer to employer exploitation is a vibrant job market. When jobs abound, employees can wield leverage to better their circumstance or jump ship when things go awry.

Even though the labor market solves most employment issues, courts have chipped away at the at-will rule. One exception to at-will employment is a tort called wrongful discharge in violation of public policy. This tort allows an employee to sue his boss if his termination undermined an important public policy. For example, if your boss fires you because you exercised a legal right or refused to commit a crime, you may have a claim for wrongful discharge in violation of public policy.

This tort has caused confusion and turmoil in the workplace. Employers, fearful of lawsuits, turn to skittish hiring practices that slow the job market and hesitate to fire crummy employees. The result is bad for everyone except for the handful of employees and lawyers who successfully sue their bosses.

Yet the Supreme Court of Washington decided today to expand the tort of wrongful discharge in violation of public policy–even when it’s not necessary to protect public policy. The Court decided three cases that basically ask the same question: if other laws or policies already protect the public policy at stake, should the employee still be able to sue for wrongful discharge in violation of public policy?  In one of the three cases, for example, the federal government already offered a way to receive damages, backpay, and reinstatement for employees who were terminated for refusing to violate a federal trucking regulation. When the plaintiff let the deadline for getting federal relief float by, he expected to still be able to sue in state court under the wrongful discharge tort.

This renewed erosion of at-will employment ignores the protections employees already enjoy and the costs that an expanded tort will inflict on employers and employees alike. The free market already ensures that self-interest will usually protect employees. And in these cases, an adequate alternative remedy already exists for the terminated employee. Despite these layers of armor, the Court overruled its own prior precedent and added another shield. This is like adding a belt and suspenders to a pair of overalls. The pants are going nowhere.

Employees shouldn’t thank the Court for its “protection.” The Court’s ruling increases the risks employers face whenever they hire or fire. Instead of one potential lawsuit from a termination, employers could face two: one under the tort for wrongful discharge, and one under whatever other federal or state law is available. The double-dipping will only serve to make employers more shy about hiring and firing. This perverse result cramps the best solution to employer exploitation in the first place–a healthy job market.

To see our briefs in two of the three cases, go here and here.