Jottings By An Employer's Lawyer

Thursday, May 24, 2007

A Belated Valentine's Day Message - $4 MDV for Sandia Labs Employee

For some reason some MDV's seem to be escaping my attention recently, including one that was initially reported on February 14. From an Albuquerque Journal story reprinted at Thinking About Vigilantism, Update on Sandia National Laboratories "Vigilante", detailing with some juror comments the return of a $4 million dollar verdict by a New Mexico jury in favor of a Sandia Lab employee who had been terminated after his "back-hacking" efforts uncovered evidence that he disclosed to the FBI about national security breaches.

$2 million of the award was punitive damages. Although it is hard to get all the details from this story, it appears part of the issue was that he didn't disclose to his employer that it was the FBI he was working with.

I was led to the story by a post on Rosario D. Vega-Lynn's New Mexico Labor and Employment Law blog, which I read regularly through my RSS reader. For some reason her April 16th post, Letter to the Editor, just showed up this afternoon. It's a letter to the Albuquerque Journal following one of their stories about the trial, which must have talked about the trial strategy of the defense.

The letter writer was happy to learn the "kind of arguments to expect from really big law firms who specialize in defending corporations." Since that hits pretty close to home, I was curious to see how those arguments were viewed. Among them, with the writer's editorial comments in parentheses, were:
  • (Can you believe their reported argument) the fired employee "was an at-will employee and therefore not entitled to due process"
  • a jury had "no business" second-guessing the employer's decision (because, after all, at will employment means anyone can always be fired for any reason or no reason, and, that such a rule is surely stated somewhere in the stuff they— and all corporations— make people sign to get hired in the first place).

Then the writer took off on the notion of employment at will, laying it at the feet of Ronald Reagan and the Republican party (at least 43 didn't get blamed for this):

When Ronald Reagan became president in 1981, a coincident discovery was also made in anthropology that people are actually "human capital" walking upright. Soon thereafter, "employment at will," a doctrine originally intended (and appropriate) for sole proprietors who hire other individuals, was embraced instead by corporations as the cure-all for any pesky problems with the human capital. Employee handbooks were uniformly rewritten to say so, and to this day, "conservatives," while speaking vaguely of "values" they usually can't define, are actually the political enablers of corporations seeking in law to evade responsibility for any mistreatment of any employee— no matter how outrageous. The "at-will" doctrine is as sacred to the Republican Party as the Pledge of Allegiance.

Obviously not a fan of the at will employee argument, which struck home as earlier this year I had been facing a New Mexico jury trial where that issue was going to be prominently featured — whether I wanted it to be or not. The letter made me even happier that the case was otherwise resolved.

Not to quibble with the writer — but actually the two arguments correctly state the law. Unless Sandia is considered a government employer, it is not required to provide due process and there are a number employment decisions that pretty much use the exact words quoted, that juries and courts are not to serve as super-hr departments second guessing an employer's decision.

And with respect to blaming Ronald Reagan for employment at will, the concept actually goes back a lot further. In Texas we cite East Line and R.R.R. Co. v. Scott, 10 S.W. 99, 102 (Tex. 1888), almost 100 years earlier as establishing the law in Texas.

But having said that, I can certainly see why the arguments would not be appealing to a jury, and why when I give a talk about employment law trials, one of the points I emphasize is that trial is not a time for legal theories, classic example — employment at will. My experience is that a jury want facts that support the "why" an employee was fired, regardless of the legal standard.


The letter-writer may be wrong, but s/he's typical. Empirically, most at-will employees believe they can only be fired for cause. See Pauline Kim, Bargaining with Imperfect Information: A Study of Worker Perceptions of Legal Protection in an At-Will World, 83 CORNELL L. REV. 105 (1997).

Rick Bales
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