Maryland Court of Appeals Clarifies Scope of Wrongful Discharge Tort

Date: September 26, 2011

Maryland courts have long recognized a common law right of action for employees who allege that they were terminated in violation of a public policy.  While the parameters of this cause of action defy easy explanation, the Court of Appeals' recent decision in Parks v. Alpharma, Inc., sheds some light on just what constitutes the sort of public policy that will support a wrongful discharge claim.  This article takes a closer look at the wrongful discharge tort and the Court of Appeals' most recent attempt to clarify its reach. 

Debra Parks marketed prescription drugs for the pharmaceutical company Alpharma, Inc. until her employment was terminated in 2006.  According to Parks, she was terminated as a result of her internal complaints to management regarding the company's alleged failure to inform the Food and Drug Administration that one of its drugs was potentially fatal if taken by a patient who was actively consuming alcohol.  Parks subsequently filed a lawsuit against Alpharma in the Circuit Court for Baltimore City alleging a single claim: wrongful discharge. 

The tort of wrongful discharge was originally recognized in Maryland by the Court of Appeals' 1981 decision in Adler v. American Standard Corp.  The tort is an exception to the general principal of at-will employment and is based on a judicial recognition that society has an interest in preventing employers from terminating employees for certain reasons that would run afoul of recognized public policies.  The question of what constitutes a public policy that is both sufficiently clear and sufficiently important to support a wrongful discharge claim has been the subject of extensive litigation since the tort was first recognized in Adler.  The issue was again confronted by the Court of Appeals with regard to Parks' claim after her lawsuit was dismissed by the Circuit Court. 

Parks identified three sources of public policy which she alleged had been violated by Alpharma and which she contended were sufficient to support her wrongful discharge claim: the Maryland Consumer Protection Act and the Federal Trade Commission Act, each of which prohibits certain unfair and deceptive trade practices, and the series of federal regulations which governs when a prescription drug label must be revised to include warnings concerning known hazards.  Parks alleged that Alpharma had fired her in retaliation for her having investigated and reported Alpharma's alleged non-compliance with the three laws. 

In the course of its analysis of Parks' claim, the Court of Appeals offered a useful synopsis of the wrongful discharge tort, by which it acknowledged that those cases in which the tort was held to apply could be roughly grouped into several categories: (1) cases in which an employee is discharged for performing an act which he or she has a specific legal duty to perform, such as a teacher required by law to report suspected child abuse, (2) cases in which an employee is discharged for refusing to engage in criminal conduct, (3) cases in which an employee is discharged for exercising a legal right, such as filing a workers' compensation claim, and (4) cases in which an employee is discharged for reporting the employer's failure to perform a specific legal duty. 

It was this fourth category which Parks sought to invoke by her allegation that she was terminated for reporting Alpharma's actions with regard to its drug.  The Court of Appeals, however, held that the statutory provisions cited by Parks were not a sufficiently clear source of public policy to support a wrongful discharge claim.  This decision is quite significant for employers, as a decision by the Court of Appeals to the contrary would have opened the door for any employee terminated after reporting any arguably questionable business practice to pursue a wrongful discharge claim based upon the public policy against “unfair and deceptive” trade practices expressed in the state and federal consumer protection statutes.  This concern was directly invoked by the Court of Appeals in its decision, as the Court noted that the broad language of the consumer protection statutes undermined their utility in the context of a wrongful discharge claim, as the specific obligations of an employer pursuant to these statutes are often not readily apparent.  The Court thus concluded that a mere allegation that an employer has violated such a statute, in the absence of an allegation that the employer breached a clearly identifiable legal duty imposed by the statute, is an insufficient basis on which to find a violation of public policy for purposes of a wrongful discharge claim. 

Takeaway for Employers
Employers considering the termination of an employee must be cognizant of the existence of the wrongful discharge tort and must take care not to base employment decisions on grounds that would run afoul of well-established public policies.  Parks v. Alpharma, Inc. has provided a degree of clarity for employers by confirming that the mere allegation that an employer engaged in unfair trade practices, absent reference to a specific legal duty which the employer is alleged to have violated, will not typically be sufficient to support a wrongful discharge claim.