A Crack in Missouri’s Employment At Will Doctrine

by Dan Conlisk

Missouri is an at-will employment state. Generally, an employer may discharge an employee for any reason or no reason at all so long as doing so does not run afoul of various anti-discrimination laws (such as those prohibiting discrimination on the basis of race, color, sex, religion, age, disability, national origin, ancestry, etc.). But, in addition to these limitations on the employment at will doctrine, Missouri courts recognize a “public policy” exception.

Under the public policy exception, an employee may not be terminated for “(1) refusing to violate the law or any well-established and clear mandate of public policy as expressed in the constitution, statutes, regulations promulgated pursuant to statute, or rules created by a governmental body, [or] (2) reporting wrongdoing or violations of law to superiors or public authorities.” Fleshner v. Pepose Vision Institute, P.C., 304 S.W.3d 81, 92 (Mo. 2010) (en banc). For example, a bank employee may not be terminated for refusing to cooperate in the submission of misleading documents to bank regulators, a nurse may not be fired for refusing to alter a patient’s progress notes, and a company accountant may not be terminated for whistleblowing regarding the company’s accounting procedures that violate SEC regulations. If an employer terminates an employee because he or she engaged in this sort of conduct, the employee may sue for wrongful discharge.

In defending such claims, employers normally argue that the employee was not discharged for conduct protected under the public policy exception, but rather because he or she violated company rules, was late to work, performed poorly on an assignment, or the like. Historically, employers could escape liability for terminations in violation of the public policy by arguing that the employee’s protected conduct (refusing to violate the law or attempting to stop others from doing so) was not the “exclusive cause” of the termination. Essentially, if the employer could suggest that it terminated the employee because he or she was late to work or violated other company rules, the fact that the termination may also have been in retaliation for the employees’ refusal to participate in illegal conduct did not matter. Under this standard, an employee could prevail in a public policy exception/wrongful discharge case only by showing that his or her refusal to violate the law and/or whistleblowing was the “exclusive cause” for the discharge. Id. at 92-93.

But in Fleshner, the Missouri Supreme Court rejected the “exclusive cause” test and replaced it with a “contributing factor” analysis. It reasoned, in part, that “public policy requires rejection of ‘exclusive causation’” as the proper standard of proof in public policy exception cases because that standard discourages employees “from reporting their employers’ violations of the law or for refusing to violate the law.” Id. at 93. The Court explained that “[a]n employee who reported violations of the law or who refused to violate the law could be terminated, without consequence, by the employer” because, when faced with a lawsuit “alleging wrongful termination in violation of public policy, the employer could assert that, while the employee’s reporting or refusal played a part in the decision to terminate, the employee was also fired for another reason, such as reporting for work late or failing to follow the dress code.” The Court concluded that the “exclusive causation” standard “fails to accomplish [the] task of protecting employees who refuse to violate the law or public policy.”

In place of the exclusive causation standard, the Missouri Supreme Court held that that courts should employ a “contributing factor” test. Under the contributing factor test, a terminated employee can prevail in a public policy exception/wrongful discharge case by showing that – although the employer may suggest other reasons for the discharge – the employer’s motivation was in part based upon the employee’s refusal to violate public policy or the employee’s whistleblowing activities. The Court concluded that discharging an employee when he or she refused to violate the law or attempted to stop others from doing so is no less reprehensible simply because it is not the exclusive reason for the termination. Id. at 94-95.

Missouri’s employment at-will doctrine is harsh. It enables employers, with few exceptions, to terminate employees without regard to their performance, compliance with company rules, tenure or loyalty. While the public policy exception does not change this basic fact, it does provide protection to employees who are fired for doing the right thing – refusing to violate the law and/or seeking to stop others from doing so. Fleshner’s adoption of the contributing factor test makes that protection stronger; it limits employers’ ability to escape liability in public policy exception/wrongful discharge lawsuits by simply claiming that the firing was for some other, illusory reason.