Employee Relations

Church Law and Tax 1989-01-01 Recent Developments Employee Relations Richard R. Hammar, J.D., LL.M., CPA

Church Law and Tax 1989-01-01 Recent Developments

Employee Relations

A North Carolina appeals court addressed the sensitive issue of employee discharges. The North Carolina Baptist State Convention hired an employee in 1984 to serve in an administrative position. No written contract was signed, and no understanding was expressed regarding the term of employment. The employee was advised that the employment relationship would be guided by a personnel manual that had been prepared by the convention. Within two years, the employee was terminated. He sued the convention, claiming that it had wrongfully breached the contract of employment. The convention denied that an employment contract existed, and asserted that even if a contract did exist, it had ample justification for discharging the employee based on documented acts of misconduct. The former employee sued the convention for breach of contract, and the trial court ruled in favor of the convention. A state appeals court affirmed the trial court’s conclusion. The appeals court began is opinion with the observation that the “authoritative principle … grounded in well-established precedent in our jurisdiction [North Carolina] is that where a contract of employment, whether oral or written, contains no provision which governs the duration or termination of employment, the employment relationship is terminable at the will of either party.” Further, “the burden to establish the specific duration of an employment contract lies with the employee.” However, the court emphasized that the rule giving employers the authority to terminate “at will” employees (i.e., those serving without a specified term of employment) at any time with or without cause is subject to a number of exceptions. Specifically, “at will” employees cannot be fired for any of the following reasons: (1) filing a workmen’s compensation claim, (2) instituting an “OSHA” claim, or (3) engaging in labor union activities. The court concluded that the employee had failed to establish the existence of “a contract of employment for a specific duration,” and accordingly he was subject to the employer’s general authority to terminate “at will” employees. Further, the employee had failed to prove that any of the exceptions to the general rule applied. The court acknowledged that employment contracts can be oral, but that unless an oral contract specifies a specific duration, the general “at will” rule applies. Finally, the court rejected the employee’s claim that the convention’s personnel manual had become a part of their employment contract: “It has been clearly decided in this jurisdiction that unilaterally promulgated employment manuals or policies do not become part of the employment contract unless expressly included in it.” One word of caution—the “at will” employment principle has been significantly eroded in a number of other states. Therefore, this decision (which purports to interpret North Carolina law) should not be relied on in other states. Rosby v. General Baptist State Convention of North Carolina, Inc., 370 S.E.2d 605 (N.C. App. 1988).

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