Is at Will at Risk?

Courts Expand Exceptions to the Employment at Will Doctrine Under Indiana Law

Indiana follows the doctrine of employment at will, which generally means that either party may terminate the employment relationship, with or without reason, as long as the reason does not violate the law. The Indiana Supreme Court has recognized only a few narrow exceptions to the employment at will doctrine under Indiana law. Several recent Indiana decisions, however, have expanded the scope of those exceptions. As a result of these court decisions, employers can be held responsible not only for terminating an employee, but also for causing an employee to quit.

One exception to the employment at will doctrine, frequently called the "Frampton" exception (which is the name of the case that established the exception), allows an employee to bring a claim against an employer if the employee is fired in retaliation for exercising a statutorily-protected right. In the Frampton case, an employee was fired for seeking worker's compensation benefits. The Indiana Supreme Court later recognized a public policy exception by permitting an employee to bring a claim against an employer if the employee is fired for refusing to commit an illegal act for which the employee would be personally liable. Both of these exceptions create a claim for retaliatory discharge under Indiana law.

In further expanding these exceptions, the Indiana Supreme Court concluded in December 2009 that an at-will employee can bring a claim against an employer for constructive retaliatory discharge. Constructive retaliatory discharge can occur when an employer's behavior creates working conditions so intolerable that an employee is essentially forced to resign because of the exercise of a statutorily-protected right. Under the specific facts of that case, however, the Indiana Supreme Court found that the employee's claim did not fall within any exception.

More recently, the Indiana Court of Appeals found that an employee had presented enough evidence to bring a claim under the Frampton exception for constructive discharge in retaliation for filing worker's compensation claims. In the case, the plaintiff worked as a highway maintenance worker and had several work-related accidents which required multiple surgeries, physical therapy and numerous work restrictions. The plaintiff claimed management ridiculed him for his injuries and his numerous worker's compensation claims, including calling him names and telling him that they thought he was faking his injuries. He also claimed that management ignored his work restrictions and forced him to perform job duties that violated those restrictions. The plaintiff alleged that he eventually quit because he was continually forced to work outside of his medical restrictions. The court focused its decision on the employer's disregard for the employee's medical restrictions. It found that constructive retaliatory discharge can occur if an employer puts an employee at risk of physical harm by, knowingly or with deliberate indifference, forcing an employee to perform work duties that violate the employee's medical restrictions.

This case is important for several reasons. Although employers may have formal complaint and grievance procedures in place, these procedures will not necessarily insulate employers from a claim for constructive retaliatory discharge. The employer attempted to argue that the plaintiff should not be allowed to bring his claim because he did not follow his employer's official complaint process. However, the court still permitted his suit to move forward. This means that employers may not rely solely on their formal complaint and grievance procedures to protect them from employee claims that the work conditions were intolerable.

This case also demonstrates the importance of an employer's compliance with an employee's medical work restrictions. The case emphasizes the need for supervisors and management to be trained on how to properly handle an employee's medical work restrictions, and highlights the importance of continually monitoring how such restrictions are being handled.

If you have any questions about employment at will in Indiana or the constructive retaliatory discharge exception, please contact Tami Earnhart or another member of Ice Miller LLP's Labor and Employment Practice Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.