16-5 Termination of the Agency Relationship (See PowerPoint Slide 16-25)

· Need to Give Public or Constructive Notice (Trade Publication) of the Termination in Order to Terminate Apparent Authority

· Also Give Private (Mailed) Notice (Letters) to Those That Have Dealt With the Agent

· Without Notice, Agent Will Have Lingering Apparent Authority (No One Knows They Have Left)

16-6 Termination of Agents Under Employment at Will (See Exhibit 16.3 and PowerPoint Slides 16-26, 16-27, 16-28, 16-29 and 16-30)

· Has No Definite Ending Date

· Usually There is No Formal Written Contract – Implied Contract

· Used to Be They Could Be Fired at Any Time; Courts Now Afford Protection

16-6a The Implied Contract (See PowerPoint Slide 16-31)

Personnel Manuals Will Be a Contract if Employees Relied on Its Procedures


Dillon v. Champion Jogbra, Inc.

819 A.2d 703 (Vt. 2002)

FACTS: Dillon was working at Jogbra and was given a promotion as well as “pep talks” by managers about her new position and how long she would be doing it and the training. She was then put into a temporary position after a short stint in her new position, told she could apply for other jobs, and then not placed in those jobs. Eventually she was terminated when her temporary position ended. Jogbra did not follow its established procedures for terminating her employment. She filed suit for wrongful discharge, promissory estoppel and breach of implied contract.

DECISIONS BELOW: The trial court granted summary judgment.

ISSUES ON APPEAL: Does an employee have any rights or protections under implied contracts? Promissory estoppel?

DECISION: The court held that Dillon had the right to proceed with the claim related to wrongful discharge and breach of contract, but not promissory estoppel.

16-6b The Public Policy Exception (See PowerPoint Slide 16-32)

· Protection – Whistleblowers

· Protects employees who report illegal conduct or conduct that violates public policy

· Protects employees who refuse to participate in illegal conduct

Examples: Pricefixing, FDA or FAA violations

· The Antiretaliation Statutes: protection for whistleblowers

· Passed in many states and by federal agencies

· Prohibit firing, demotion, reprimands, and pay cuts of employees who report conduct of their employers

· Federal level – Energy Reorganization Act affords protection for employees involved in nuclear work (called EPS – Employee Protection Section)

· All 50 states have some form of protection for whistle-blowers

· Sarbanes-Oxley (SOX) provides antiretaliation protection against employees who raise financial reporting issues

· Criminal penalties for retaliation up to 10 years

· Employee damages are reinstatement, back pay and damages – up to 30% of federal recovery can go to whistleblowers

· Also applies to analysts

See PowerPoint Slide 16-33 to cover suggestions for whistleblowing for both employers and employees.

See PowerPoint Slide 16-34.


Hadley v. Duke Energy Progress

2016 WL 1071098 (E.D. N.C. 2016)

FACTS: Timothy S. Hadley worked for Duke Energy Progress (DEP) (Defendants) from August 5, 2002 until his termination on December 7, 2010.

On January 31, 2008, Hadley had lunch with Montgomery and Hardison. Montgomery and Hardison told Hadley that he would receive a raise in salary that year. Hadley wanted the raise to be effective retroactively to May 2006, when he was promoted. According to Hadley, Montgomery and Hardison promised that he would receive four monetary Energy Advantage Awards (“EAAs”) to compensate him appropriately for the time between May 2006 and when the raise would take effect.

Hadley periodically asked Montgomery about the status of the EAAs from 2008 through September 2009. In November 2008, Hadley contacted DEP Human Resources’ Sue Bathgate regarding the EAAs. In response, Montgomery called Hadley into a one-on-one meeting and told Hadley that he would be fired if he continued to pursue the EAAs with HR. Hadley alleges that he spoke with Montgomery about the EAAs again during an August 2010 meeting concerning Hadley’s 2010 mid-year review, and Montgomery repeated his threat. On October 29, 2010, Hadley again mentioned the EAAs to HR.

In 2009, Hadley began to work also on DEP’s Smart Grid Program, an energy efficiency project funded in part by a matching grant awarded under the American Recovery and Reinvestment Act of 2009.

In December 2009, Hadley discovered that DEP had paid IBM over $4 million for work that Hadley considered to be “not worth anywhere near the amount that IBM billed.” In November and December 2009, Hadley criticized the value of IBM’s work to Montgomery and Hardison, telling them that he was concerned that “DEP was submitting costs to U.S. government agencies that … could not be substantiated.” On December 22, 2009, Hadley received an IBM task order that would pay IBM over $3.5 million for three months work but would require “no deliverables.”

On January 5, 2010, Hadley told Montgomery that he “would not initiate the … order” because of IBM’s poor performance, because the task order did not require deliverables from IBM, and because DEP’s own schedulers could “do the same work for approximately 10% of the cost.” Throughout December 2009 and January 2010, Hadley complained to DEP personnel, including Montgomery and others that the “data on the Smart Grid Program was being inaccurately reported to the Federal Department of Energy” and that there were “major discrepancies with what DEP was proposing to send to the Department of Energy as basis for [an ARRA matching grant].” In October 2010, Hadley also complained about Smart Grid to HR’s Nadine Kloecker-Dunn. Hadley believed DEP’s actions were improper, “constituted a gross mismanagement of an ARRA contract and ARRA funds,” “constituted a gross waste of ARRA funds,” and “constituted an abuse of authority” related to use of ARRA funds. Hadley thought that the IBM work was “junk,” that “the project was in complete shambles,” and that there was “no rationale or basis behind any of [IBM’s] numbers.” In January 2009, Montgomery told Hadley that “there would be consequences” for his repeated complaints regarding Smart Grid.

In early 2010, Hadley asked to be removed from Smart Grid. Montgomery granted Hadley’s request and assigned Hadley to a project in Sutton, North Carolina. Sutton is a 2.5 hour drive from Hadley’s home in Raleigh. At the time of Hadley’s reassignment, Montgomery did not believe Hadley would be required to be present physically in Sutton on a daily basis. However, around May 2010, DEP enacted a policy change that required Project Controls employees to be physically present at their assigned project locations on a daily basis. Hadley was not the only employee that this change affected. In mid-2010, Montgomery told Hadley that he would need to begin working full-time at Sutton beginning in the third quarter of 2011, approximately 15 months later.

Hadley refused to travel to Sutton. In August 2010, Montgomery told Hadley that if he refused to travel to Sutton, he would no longer have a position. Moreover, Montgomery sent Hadley a memo stating that, in light of his refusal to travel to Sutton, Hadley’s employment would end on October 15, 2010, if he did not find another position within DEP. Hadley did not find another position within DEP by October 15, 2010, but he remained employed with DEP until December 7, 2010.

In August or early September 2010, Montgomery noticed that Hadley had a considerable balance of unused vacation time. This fact surprised Montgomery because Hadley “typically took a ski vacation each year.” On September 15, 2010, Montgomery instructed Hadley via email to change his timesheet to reflect the correct vacation time. Hadley did not reply to Montgomery’s email, but allegedly left a voicemail for Montgomery explaining that he had intentionally miscoded the vacation time to compensate himself for holiday time that had been misrecorded as vacation time in 2009. Hadley did not change his timesheet as Montgomery had requested and acknowledges that miscoding time violates company policy. Nonetheless, Hadley contends that Montgomery approved Hadley’s timekeeping method to compensate for the alleged 2009 vacation error.

DEP investigated whether Hadley violated DEP’s Code of Ethics by falsifying his timesheets. After interviewing Hadley and reviewing Hadley’s building access and business-computer records for 2009 and 2010, investigator Eugene Simmons concluded that Hadley had falsified his timesheets.

On December 7, 2010, DEP terminated Hadley’s employment. DEP’s records reflect that the decision to terminate Hadley’s employment was based on Simmons’s conclusion that Hadley had falsified his timesheets.

After his termination, Hadley filed multiple complaints with North Carolina state agencies as well as the U.S. Department of Energy. All the agencies denied his complaints.

Hadley then filed suit in federal court. In his amended consolidated complaint, Hadley makes four claims: (1) retaliation in violation of the ARRA; (2) violation of North Carolina’s Retaliatory Employment Discrimination Act (“REDA); (3) violation of the North Carolina Wage and Hour Act; and, (4) wrongful discharge in violation of North Carolina public policy.

ISSUES: Was Hadley fired in retaliation for his complaints about waste by IBM under the ARRA federal statute? Was Hadley’s termination a violation of public policy?

DPE moved for summary judgment on each claim.[footnoteRef:1] [1: Due to space constraints, the excerpted opinion includes only the ARRA and public policy claims, the two claims related to this chapter’s materials.]

DECISION: The court granted DEP summary judgment because the complaints about the IBM issues were far removed from Hadley’s termination and also because Hadley had employment issues, notably the falsification of his time records. The court found that no reasonable jury would conclude that there was retaliation or that Hadley was fired for any reason other than his missteps at work.

BUSINESS STRATEGY − THE EMPLOYEE HANDBOOK AS A SOURCE OF LITIGATION: TAKING PRECAUTIONARY STEPS: I mportance of careful drafting of manuals for employees. What’s in them counts and creates contractual obligations.

16-6c Handling Employee Termination Disputes (See PowerPoint Slide 16-35)

· Many companies have created a peer review process for termination and other actions against employees

· Peer review now used as a means for reviewing employee grievances

16-7 Agency Relationships in International Law (See PowerPoint Slide 16-36)

· Complex Interrelationships Often Evade the Law

BCCI and its complex structure helped it evade the law

· Disclosure of Interrelationships Becomes Important for Conflicts, Compliance


1. Termination cases always have two sides.

2. Ms. Roehm was not pristine – violations of conflicts policies.

3. Retaliation cases get messy.

4. Adapt to culture of company or find another company.


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