Michigan’s “Public Policy” Doctrine Prohibits Employers from Firing Employees Who Refuse to Break the Law

In Michigan, the general rule is that employers are free to terminate employees “at will.” This means that unless you have some form of individual contract or agreement indicating otherwise or you are a union member and subject to a collective bargaining agreement, you can be fired at any time with or without a good reason or cause.

Common exceptions to the at will rule include civil rights discrimination claims. Under federal and state law employers are prohibiting against discriminating against employees in connection with their employment based on age, race, sex, religion, disability etc.

Another less well known exception to the at-will rule prohibits employers from terminating an employee for refusing to help his or her employer break the law. This is known as the “public policy” doctrine.

To give you an idea of what public policy doctrine means, here are some examples:

In Morrison v. B Braun Medical, Lynn Morrison worked as a medical sales representative. Her employer fired her after she refused to unlawfully promote a drug to her customers for uses not approved by the Food & Drug Administration. Additionally, she refused to violate anti-kickback laws by providing special consideration to a hospital customer. Despite the fact that Ms. Morrison consistently met or exceeded her sales goals over the nine years she worked there, the company terminated her employment. She consequently filed a wrongful termination suit, claiming that her firing violated Michigan’s public policy doctrine. After a trial in federal court, the jury returned a verdict of $880,000, which the appellate court later affirmed in December 2011.

In an earlier case, Silberstein v. Pro-Golf of America, Inc., Ronald Silberstein served as CFO for the company, but claimed to have been fired for refusing to “cook the books” by making accounting entries that would have violated various securities and franchise laws. A jury rendered a verdict of $700,000 in economic damages and $150,000 in emotional damages in Mr. Silberstein’s favor, which was later upheld on appeal in 2008.

So how do you know if a termination is in violation of public policy? Here’s the test:

An employer who fires an employee violates public policy if the employee was discharged:

(1) in violation of an explicit legislative statement prohibiting the discharge, discipline, or other adverse treatment of employees who act in accordance with a statutory right or duty,

(2) for failure or refusal to violate a law in the course of employment, or

(3) for the exercise of a right conferred by a well-established legislative enactment.

Note that employees do not have to demonstrate that their employers directed them to violate a law in order to have a legitimate public policy claim; they need only show that one of the motives or reasons for the firing was a failure or refusal to violate a law.

As the Morrison and Silberstein cases demonstrate, juries have entered substantial verdicts in these types of wrongful discharge cases.

If you’ve been fired and believe that one of the underlying reasons was your refusal to break a law, you may well have cause to pursue damages against your former employer based on a violation of public policy claim.