This survey covers legislative and judicial developments in Virginia employment law between June 1986 and June 1987. It does not address the workers\u27 compensation and unemployment compensation statutes but focuses on state labor and fair employment laws and the employment-at-will doctrine

Cartier, E.

Degraeve, R.

Groeseneken, G.

Kauerauf, T.

Kerber, Andreas

Maes, H. E.

Pantisano, L.

Roussel, Ph.

Schwalke, Udo

English

Epps, Patricia K.

University of Richmond

University of Richmond Law ReviewVolume 21 | Issue 4 Article 91987Annual Survey of Virginia Law: Employment LawPatricia K. EppsFollow this and additional works at: http://scholarship.richmond.edu/lawreviewPart of the Labor and Employment Law CommonsThis Article is brought to you for free and open access by UR Scholarship Repository. It has been accepted for inclusion in University of Richmond LawReview by an authorized editor of UR Scholarship Repository. For more information, please contact scholarshiprepository@richmond.edu.Recommended CitationPatricia K. Epps, Annual Survey of Virginia Law: Employment Law, 21 U. Rich. L. Rev. 769 (1987).Available at: http://scholarship.richmond.edu/lawreview/vol21/iss4/9EMPLOYMENT LAWPatricia K. Epps*This survey covers legislative and judicial developments in Vir-ginia employment law between June 1986 and June 1987. It doesnot address the workers' compensation and unemployment com-pensation statutes but focuses on state labor and fair employmentlaws and the employment-at-will doctrine.Although federal law is the primary source of labor and fair em-ployment law,1 remedies available under Virginia common law foremployment-related disputes have expanded, most notably as a re-sult of the federal courts' recognition of a state contract claimbased on an employer's representations and handbooks. Legislativedevelopments were relatively sparse in 1987. The only significantbill enacted affecting the relationship between employers and em-ployees was the Virginia Human Rights Act.2I. EMPLOYMENT AT WILLThe Virginia Supreme Court has not considered the issue ofwhether policies contained in an employment handbook or an em-ployer's representations can become enforceable terms of an em-ployment contract. In the absence of any pronouncement from thecourt on this exception to the employment-at-will rule, decisionsfrom the state circuit courts and the federal courts interpretingVirginia law varied as to whether an employer's handbooks or rep-resentations provide the basis for a contract claim.3* Associate, Hunton & Williams, Richmond, Virginia; B.A., 1974, University of Virginia;M.A., 1979, University of Virginia; J.D., 1983, University of Virginia.1. See, e.g., Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000-e (1982); NationalLabor Relations Act, 29 U.S.C. §§ 151-169 (1982 & Supp. II 1984); Labor-Management &Relations Act, 1947, ch. 120, 61 Stat. 135 (codified as amended in scattered sections of 29U.S.C.); Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201-218 (1928 & Supp. III 1985), asamended by Act of Oct. 16, 1986, Pub. L. No. 99-486, 29 U.S.C.A. § 214 (Cum. Supp. 1987);Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, 88 Stat. 829 (codi-fied as amended in scattered sections of 5, 18, 26, 29, 31, 42, U.S.C.).2. VA. CODE ANN. §§ 2.1-714 to -725 (Repl. Vol. 1987).3. For an excellent discussion on the status of the employment-at-will rule in Virginia, seeMarshall & Wicker, The Status of the At-Will Employment Doctrine in Virginia afterBowman v. State Bank of Keysville, 20 U. RICH. L. REV. 267 (1986).UNIVERSITY OF RICHMOND LAW REVIEWTwo circuit court decisions handed down in October 1986 illus-trate the diverse views in this area. In Seitz v. Philip Morris, Inc.,4the plaintiff alleged that his discharge violated the defendant em-ployer's Policy and Procedure Manual provisions setting "justcause" as the standard for terminating employment. The circuitcourt overruled the employer's demurrer to the breach of contractclaim, holding that the lack of a specific time limit does not meanthat an at-will arrangement exists when an employment contract isalleged.' Accordingly, the plaintiff could proceed to trial and at-tempt to prove that the employment manual constitutes acontract.'In Moore v. Sadler Materials,7 the plaintiff claimed that his dis-charge was in breach of an employment contract, based upon thedefendant's employment manual stating that employees would befired only for stated reasons constituting good cause. The circuitcourt sustained the defendant's motion to dismiss, holding that thelanguage in the manual could not be used for purposes of creatingthe terms of a contract where the contract provides no definite pe-riod of time for its duration.Virginia federal district courts have shown a greater inclinationto allow wrongful discharge claims based on express contracts de-rived from employer's representations, handbooks and personnelpolicies.' These courts have not only accepted the proposition thatan enforceable contract may result from an employer's expressionof personnel policies and procedures, they have applied generalcontract principles to modification of these "agreements" as well.In Thompson v. Kings Entertainment Co.,9 the plaintiff, whowas employed at a theme park, received an employee's manual in1980 defining dismissal as a separation initiated by the park "forcause." The park was subsequently sold and the plaintiff's new em-ployer, Kings Entertainment, gave him an employee's handbook in4. 6 Va. Cir. 428 (Richmond 1986).5. Id. at 429-30.6. At trial, the defendant moved the court to strike the evidence upon conclusion of theplaintiff's case as to liability. The defendant argued that there was no evidence to go to thejury and it was entitled to judgment as a matter of law. The court granted defendant'smotion to strike. See Seitz v. Philip Morris, Inc., At Law No. Lk-848-1 (Richmond, July 21,1987).7. No. L-3076 (Virginia Beach, Oct. 21, 1986).8. For a discussion of the major federal court decisions in this area, see Marshall &Wicker, supra note 3, at 284-88.9. 653 F. Supp. 871 (E.D. Va. 1987).[Vol. 21:769EMPLOYMENT LAW1985 wliich stated that employment was terminable at will. Afterthe plaintiff was discharged, he sued Kings for breach of contract,claiming that the 1980 manual served to rebut the at-willpresumption.Ruling on Kings' motion for summary judgment, the districtcourt rejected the contention that the provisions contained in the1980 manual were not enforceable terms of the plaintiff's employ-ment. The court adopted the suggestion in an earlier handbook de-cision from the Western District of Virginia, Thompson v. Ameri-can Motor Inns, Inc.,10 that an employee could demonstrate that ahandbook constitutes an offer of benefits in exchange for continuedlabor and that acceptance is demonstrated by reading and signify-ing that he understands the handbook's terms and conditions ofemployment, and working according to those terms and condi-tions.1" Applying this analysis, the court found that the plaintiffhad produced evidence sufficient for a finding of offer and assentto the 1980 manual's provision for termination for cause. 2 Thecourt dismissed Kings' argument that the 1985 handbook con-verted plaintiff to an at-will employee, finding that Kings had notproduced sufficient evidence to conclusively establish that theplaintiff assented to the 1985 handbook's terms. It rejected Kings'view that the plaintiff's acceptance should be inferred from hiscontinuing to work with knowledge of the 1985 handbook's terms,concluding that inaction cannot be construed as assent under gen-eral contract principles. 3The Fourth Circuit Court of Appeals has not had occasion toreview the federal district court decisions on the enforceability ofterms contained in an employment handbook. In Costantino v.Jaycor,4 the Fourth Circuit merely noted that the trial court cor-rectly had refused to admit in evidence an employment manualwhich specified only cause and reduction in force as bases for ter-mination of employment. The plaintiff had claimed his dischargebreached this term of employment but failed to establish that thehandbook was applicable to him as an executive employee. 5 Thusthe question of whether the handbook was evidence sufficient torebut the at-will presumption was not before the court.10. 623 F. Supp. 409 (W.D. Va. 1985).11. Kings Entertainment Co., 653 F. Supp. at 874.12. Id. at 874-75.13. Id. at 875-76.14. No. 86-2559 (4th Cir. April 14, 1987).15. Id. slip op. at 4.1987]UNIVERSITY OF RICHMOND LAW REVIEWCostantino, however, did address another exception to 'the at-will employment rule which has been accepted in several other ju-risdictions: the implied covenant of good faith and fair dealing.The Fourth Circuit affirmed the district court's rejection of a con-tract claim based on an implied covenant, stating:In light of the Supreme Court of Virginia's characterization of anemployment contract of unlimited duration as 'a contract of hazard,'Edwards Co. v. Deihl, we are not satisfied that Virginia would recog-nize a covenant of good faith and fair dealing if the court weresquarely presented with the issue today.18II. FAIR EMPLOYMENT LAWSThe General Assembly passed Virginia's first comprehensiveanti-discrimination bill in the 1987 session. The Human Rights Actmakes unlawful any discrimination on the basis of race, color, reli-gion, national origin, sex, age, marital status or disability, in em-ployment as well as in public accomodations, including educationalinstitutions, and in real estate transactions. Prior to enactment ofthe Human Rights Act, Virginia law only addressed private sectoremployment discrimination on the basis of disability.'8A major feature of the legislation is the creation of the Councilon Human Rights, which is authorized to receive, investigate, seekto conciliate, hold hearings and make findings and recommenda-tions upon complaints alleging unlawful discriminatory practices."9An unlawful discriminatory practice is defined as conduct whichviolates Virginia antidiscrimination statutes or regulations, titleVII of the Civil Rights Act of 1964,20 or the Fair Labor StandardsAct.2'16. Id. slip op. at 6 (citation omitted).17. VA. CODE ANN. §§ 2.1-714 to -725 (Repl. Vol. 1987).18. See Rights of Persons with Disabilities Act, VA. CODE ANN. §§ 51.01-40 to -46 (Cum.Supp. 1986) (amended 1987). The Virginia Fair Employment Contracting Act of 1980 re-quires that state contracts of over ten thousand dollars shall contain provisions requiringthe contractor to agree not to discriminate on the basis of race, religion, color, sex, or na-tional origin during the performance of the contract. Id. § 2.1-376 (Repl. Vol. 1987). Nopenalties or enforcement procedures are provided, however.19. Id. §§ 2.1-718 to -720 (Repl. Vol. 1987).20. 42 U.S.C. §§ 2000e - 2000h-6 (1982).21. 29 U.S.C. §§ 201 - 262 (1982 & Supp. III 1985). Specifically, the Equal Pay Act provi-sions of the Fair Labor Standards Act prohibiting sex-based discrimination in payment of772 [Vol. 21:769EMPLOYMENT LAWThe Council's investigatory role is triggered by the filing of awritten complaint within 180 days of the alleged discriminatoryevent.22 In carrying out its investigation, the Council must relyupon the cooperation of the parties to obtain information; theCouncil itself does not have power to issue subpoenas. It may,however, request the Attorney General to apply to a circuit judgefor a subpoena duces tecum after it has made a good faith effort toobtain information necessary to determine whether a violation hasoccurred.23If the alleged discriminatory practice is unlawful under a Vir-ginia statute which is enforced by a state agency, the Council mustrefer the complaint to the agency.24 The Council does not have ju-risdiction over complaints filed under local ordinances prohibitingdiscrimination. 5The Council's authority does not extend to awarding damages orgranting injunctive relief; it is limited to resolving complaintsthrough conciliation. If conciliation efforts are unsuccessful, an un-solved complaint must be referred to the federal agency withjurisidiction over the complaint.2"The Act explicitly provides that the Human Rights Act does notcreate an independent or private cause of action, nor should it beconstrued to allow tort actions for unlawful discrimination.2 7 Lack-ing such an explicit pronouncement by the legislature, it mighthave been argued that a cause of action in tort existed for dis-charging an employee in violation of the public policy embodied inthe Act. This provision, therefore, was inserted to discourage a newwages for equal work are incorporated in the definition of an unlawful discriminatory prac-tice. See 29 U.S.C. § 206(d) (1982).22. The General Assembly adopted the title VII limitations period for filing a charge ofdiscrimination. See 42 U.S.C. § 2000e-5(e) (1982).23. VA. CODE ANN. § 2.1-721 (Repl. Vol. 1987).24. Id. § 2.1-717.25. Id. The 1987 General Assembly gave Virginia cities, towns, and counties the authorityto enact human rights ordinances prohibiting discrimination in employment, as well ashousing, public accommodations, credit, and education. The ordinances cannot be inconsis-tent with nor more stringent than applicable state laws. The new law also permits localitiesto establish a local commission on human rights with powers and duties granted by theHuman Rights Act. See id. § 15.1-37.3:8 (Cum. Supp. 1987). Local human rights agencieswhich were established before July 1, 1987, may continue to exercise additional powerswhich previously had been granted them. See id. § 2.1-724 (Repl. Vol. 1987). Thus, the Cityof Alexandria and County of Fairfax human relations commissions may continue to operateas deferral agencies as certified by the Equal Employment Opportunity Commission.26. Id. § 2.1-717 (Repl. Vol. 1987).27. Id. § 2.1-725.7731987]774 UNIVERSITY OF RICHMOND LAW REVIEW [Vol. 21:769exception to the employment-at-will rule under the Virginia Su-preme Court's holding in Bowman v. State Bank of Keysville."28. 229 Va. 534, 331 S.E.2d 797 (1985).

Annual Survey of Virginia Law: Employment Law

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Annual Survey of Virginia Law: Employment Law

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