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By John D. Saxon

Alabama is an at-will employment state. An employer can terminate an employee for any reason, for no reason, or for a bad reason. The employer doesn’t have to have a reason, and he doesn’t have to give a reason.[1]

So, if a terminated employee comes to your office, at-will employment ends the discussion, right? Wrong. An employer can terminate an employee (or refuse to hire, demote, or pass over for promotion) for any reason as long as it is not an illegal reason.

This article provides an introduction to the many causes of action which exist under federal and state law to assist you in representing employees mistreated in the workplace.

Exceptions to At-Will Employment

There are some exceptions to at-will employment. Some employees (senior corporate executives, on-air television personalities, head football coaches) have written contracts. Obviously, their employment is governed by the language of their contracts.

If an employee is a member of a union, the terms and conditions of employment are determined by a written collective bargaining agreement.

In the education arena, a non-probationary (tenured) employee has a property interest in her job and cannot be summarily dismissed without a hearing and without specified reasons.

If an employer has an employee handbook, progressive discipline scheme, or a set of written regulations which govern terms and conditions of employment, there may be language which would protect an employee against dismissal.[2] In order to create a contract, the language in the handbook must be sufficiently clear and specific so as to constitute an actual offer rather than a mere statement of policy.

In the case of Ex parte Graham, the Alabama Supreme Court determined that provisions of a former employer’s personnel manual were sufficiently clear and specific to constitute an offer of a unilateral contract of employment.[3] The handbook not only did not contain the appropriate disclaimer language, it contained language that precluded discipline except for cause, and it set forth a grievance procedure that had to be followed prior to an employee’s termination.

If the employer did not live up to certain terms of employment or promises and commitments, the employee might have a cause of action for breach of contract, especially if the prospective employee gave up an existing job to take a new job.[4]

Finally, if the employer made representations of fact in the recruitment and negotiations which induced a prospective employee to accept employment, but then did not live up to those promises and commitments, the employee may have a cause of action for fraud.[5]

Federal Employment Discrimination Laws

The principal federal statute providing protection from workplace discrimination is Title VII of the Civil Rights Act of 1964.[6] It prohibits discrimination based on race, color, religion, sex or gender (including pregnancy), or national origin. The Supreme Court has subsequently construed sex or gender to prohibit sexual harassment, both opposite sex, and same sex, harassment, and to prevent discrimination based on sexual orientation and transgender status.

Section 1981 of the Civil Rights Act of 1866 was the first United States federal law to define citizenship and affirm that all citizens are equally protected by the law. It gives all U.S. citizens the same right to “make and enforce contracts”.[7]

Three years after enacting Title VII, Congress added age to the protected categories of Title VII with the Age Discrimination in Employment Act of 1967 (“ADEA”), protecting employees 40 years of age and older from adverse workplace actions.[8]

In 1990, Congress added another protected category–disability–by enacting the Americans with Disabilities Act of 1990 (“ADA”). It prevents discrimination against an employee who is a qualified individual with a disability who can, with or without accommodation, perform the essential functions of his job.[9]

The Rehabilitation Act of 1973 (Rehab Act) prohibits discrimination on the basis of disability in programs conducted by federal agencies, in programs receiving federal financial assistance, in federal employment, and in the employment practices of federal contractors.[10]

The standards for determining employment discrimination under the Rehab Act are the same as those used in Title I of the ADA: It protects “qualified individuals with disabilities.” An “individual with a disability” is a person who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such impairment, or is regarded as having such an impairment. “Qualified” means the person satisfies the job-related requirements of the position the person holds (or is applying for) and can perform its essential functions with or without a reasonable accommodation.

The Family and Medical Leave Act (“FMLA”) was signed into law in 1993.[11] It provides up to 12 weeks of leave for either the birth of a child (for both mother and father) or for a serious health condition of the employee or an immediate family member. The employer cannot interfere with the employee’s right to take the leave and, under all but a few circumstances, the employee’s job is guaranteed when they return to work.

In 2008, Congress passed the Genetic Information Nondiscrimination Act (“GINA”), which bars an employer from using an employee’s genetic information when making hiring, termination, job placement, or promotion decisions.[12]

The Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”) protects the employment of active and reserve military personnel called to active duty. USERRA mandates that returning service members must be promptly re-employed in the same position that they would have had had they not been absent for military service, with the same status, seniority, and compensation.[13]

The Employee Retirement Income Security Act of 1974 (“ERISA”) is a complicated tax and labor law that establishes minimum standards for pension plans in private industry. Among other provisions, it not only protects the rights of individuals covered by these plans, but also prevents termination of an employee to avoid vesting in his pension.[14]

The Fair Labor Standards Act of 1938 (“FLSA) creates the right to a minimum wage, determines when workers are on the clock, and requires time-and-a-half overtime pay when covered (non-exempt) employees work more than 40 hours a week.[15]

The Equal Pay Act of 1963 (“EPA”) amended the FLSA to abolish wage disparity based on gender between men and women who perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions.[16]

For causes of action under Title VII, ADA, ADEA, and GINA, an employee must first file a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) within 180 days of the discriminatory act. After its investigation, the EEOC will issue a dismissal and a notice of rights. This “right to sue” letter is your client’s permission to file suit in federal district court, which must be done within 90 days of receipt.

For causes of action under other federal statutes (§ 1981, FMLA, FLSA, EPA, USERRA), one may file suit directly in federal court without resort to the EEOC. ERISA requires a plan participant or beneficiary to exhaust internal administrative remedies before filing suit.

Some of these statutes only come into play if the employer reaches a prescribed number of employees. To be covered by Title VII or the ADA, an employee must work for an employer with at least 15 employees; for ADEA coverage, the requirement is 20 employees; for FMLA, it is 50.

The statute of limitations for these actions vary. As previously noted, for these statutes requiring resort to the EEOC (Title VII, ADA, ADEA, and GINA), it is 180 days from the act of discrimination. For FLSA (overtime), FLMA, and EPA claims, it is two years, three if the unlawful act was willful. USERRA has no stated statute of limitations, and expressly excludes default to the most analogous state statute of limitations. The Rehab Act, for federal employees, is 45 days. For § 1981 causes of action, it is generally four years.

Title VII, the ADA, ADEA, USERRA, GINA, EPA, § 1981, and the Rehab Act all prohibit retaliation for engaging in protected activity under the act (such as complaining to the employer’s HR manager about discrimination) and also prohibit harassment. The FMLA prohibits retaliation for taking FMLA leave and prohibits interference with attempts to take leave.

Regarding remedies, for most of these causes of action, an employee can recover back pay and other compensatory damages, punitive damages, and be reinstated if terminated. For the ADEA, EPA, and FMLA, there are no punitive damages, but if the plaintiff recovers, and a jury finds the discrimination was willful, the jury award is doubled as liquidated damages.

For ERISA, a prevailing plaintiff is limited to the benefits which could have been recovered under the plan.

For all of these statutes, a prevailing plaintiff can recover attorney’s fees and costs.

State Employment Discrimination Laws

The protections afforded Alabama workers by state law are more limited than at the federal level.

For a potential client who seeks your assistance with a valid sexual harassment case, but came in after her 180 days to file an EEOC charge has expired, all is not lost. She may have valid claims for assault and battery (six-year statute of limitations),[17] invasion of privacy (two-year statute of limitations),[18] and, if her freedom of movement was impaired, false imprisonment (two-year statute of limitations).[19] There may also be claims against the employer for negligent hiring, training, or supervision of the harassing employee.[20]

If the conduct visited upon an employee is particularly egregious, there may be a cause of action for outrage. The Alabama Supreme Court has defined the tort of outrage as “conduct that goes beyond all possible bounds of decency and is regarded as atrocious and utterly intolerable in a civilized society.”[21] In Henry v. Georgia Pacific Corp., the Alabama Supreme Court affirmed that the tort of outrage was available for cases involving egregious sexual harassment.[22]

Regarding the exceptions set out above to the at-will employment doctrine, breach of contract and fraud are also potential state causes of action. If an employer retains or refuses to return property to a terminated employee (which often happens), there may be a cause of action for conversion.[23]

From time to time, an employer will level accusations at an employee or former employee which could constitute defamation.[24]

For public employees, the facts could support a cause of action for violation of the employee’s due process rights.

There are also a number of Alabama statutes providing some protection to employees. For example, Alabama’s workers’ compensation statute prohibits retaliation against an employee who files a workers’ comp claim.[25]

Alabama also has an age discrimination statute, modeled after the federal ADEA, which, like the federal statute, covers employees 40 years of age and older.[26]

In 2019, the legislature passed (without a single no vote), and Governor Ivey signed, a state Equal Pay Act similar in most respects to the federal EPA. It abolishes wage disparity between workers as to both gender (like the federal EPA) and race. Unlike the federal statute, the statute of limitations is only two years (not two, three if willful), and there is no provision for liquidated damages.[27]

There is also a little-known state statute preventing discrimination based on disability which applies to state employees and employees of employers receiving state funds.[28] There is at least a question as to whether this statute permits a private cause of action.

For employees who are compensated in whole or in part on a commission basis and who are in sales of products to third parties for ultimate sale to the consuming public, if their employer has not paid the commissions due and owing within 30 days after demand has been made, the employee may file suit in state court and, if he prevails, receive treble damages and attorneys’ fees.[29] While the applicability of this statute to someone in sales is limited, the threat of treble damages and attorneys’ fees should significantly benefit the covered employee.

Finally, there is an obscure statute which, while not requiring an employer to have an affirmative action plan, mandates that if an Alabama employer does have such a plan, that plan must cover Native Americans.[30]

Alabama law prohibits the discharge of, or adverse employment action against, an employee “solely because he or she serves on any jury empaneled under any state or federal statute; …”[31] The statute allows both actual and punitive damages.

Conclusion

This article has only scratched the surface. But, armed with the knowledge of these statutes and common law causes of action, a sole practitioner or lawyer in a small firm will not be limited to turning down or referring out that next employment client who comes in the door.

Endnotes

[1] Howard v. Wolff Broadcasting Corp., 611 So. 2d 307 (Ala. 1992).
[2] Dykes v. Lane Trucking, Inc., 652 So. 2d 248 (Ala. 1994).
[3] Ex parte Graham, 702 So. 2d 1215 (Ala. 1997).
[4] This mutual extra-contractual consideration of permanent employment has been held to create a non-at-will-employment contract. Scott v. Lane, 409 So. 2d 791 (Ala. 1982).
[5] Shaddix v. United Insurance Co. of America, 678 So. 2d 1097 (Ala. Civ. App. 1995); Kidder v. AmSouth Bank, N.A., 639 So. 2d 1361 (Ala. 1994); Smith v. Reynolds Metals, 497 So. 2d 93 (Ala. 1986). The common law principles and elements applicable to the proof of fraud in Alabama are likewise applicable to lawsuits arising out of the employment context. See, Mobley v. BancTec, Inc., in which U.S. District Judge Karon Bowdre, citing Alabama law, granted summary judgment on a breach of contract claim, but denied it on a fraud claim in the employment context. Memorandum Opinion, Mobley v. BancTec Inc., 2:10-cv-02649-KOB (Doc. 30), at 18-19.
[6] 42 U.S.C. § 2000e, et seq.
[7] 42 U.S.C. § 1981. The Act was primarily intended, in the aftermath of the Civil War, to protect the civil rights of citizens of African descent who were either born in, or brought to, the United States.
[8] 29 U.S. Code § 623.
[9] 42 U.S.C. § 12101.
[10] 29 U.S.C. § 701.
[11] Id. at § 28.
[12] 42 U.S.C. §§ 2000ff-2000ff-11.
[13] 38 U.S.C. § 4301.
[14] 29 U.S.C. § 1001.
[15] Id. at § 203.
[16] Id. at § 206(d).
[17] Brewery Petroleum Suppliers, Inc., 946 F.Supp. 926 (N.D. Ala. 1996).
[18] Phillips v. Smalley Maintenance Services, 435 So. 2d 705 (Ala. 1983).
[19] Ala. Code § 6-5-170 describes the tort of false imprisonment as: “False imprisonment consists in the unlawful detention of the person of another for any length of time whereby he is deprived of his personal liberty.” See Big B., Inc. v. Cottingham, 634 So. 2d 999 (Ala. 1993).
[20] Thompson v. Harvard, 235 So. 2d 853 (Ala. 1970); Mardis v. Robbins Tire Rubber Co., 669 So. 2d 885 (Ala. 1995).
[21] American Road Service v. Inmon, 394 So. 2d 361 (Ala. 1990).
[22] Henry v. Georgia Pacific Corp., 730 So. 2d 119 (Ala. 1999).
[23] In re Louis, 137 F. 3d 1280 (11^th Cir. 1998); Cothran v. Moore, 1 Ala. 423 (1854); McGrady v. Nissan Motor Acceptance Corp., 40 F.Supp. 2d 1323 (M.D. Ala. 1998). The statute of limitations for conversion under Ala. Code § 6-2-34 is six years.
[24] The Alabama Supreme Court has recognized an employee’s right to file suit against his employer based upon the theory of defamation. Harris v. School Annual Publishing Co., 466 So. 2d 963 (Ala. 1985). In this regard, the traditional law of defamation will apply.
[25] Ala. Code § 25-5-11.1 (1975).
[26] Id. at § 25-1-20.
[27] The Clarke-Figures Equal Pay Act (HB 225) became effective on September 1, 2019.
[28] Ala. Code § 21-7-8.
[29] Id. at § 8-24-3.
[30] Id. at § 25-1-10. The statute requires an employer to include in the definition of “minority” any citizen or lawful permanent U.S. resident who establishes by birth certificate, tribal records, or “other reliable records, that he or she is an American Indian or Alaskan native, having origins in any of the original peoples of North America.”
[31] Ala. Code § 12-16-8.1 (1975).