In Lockett v. Sister-2-Sister Solutions, Inc., the North Carolina Court of Appeals reversed the dismissal of a breach of contract claim based on the plaintiff’s employment.  In this case, the plaintiff had an employment contract with the defendant that provided that he could only be fired for cause.  The Court held that “an employment relationship that can be terminated by the employer only for cause would succeed in removing an employment contract from the presumption of at-will employment.”  Therefore, the plaintiff can have a breach of contract claim for being terminated.

On the other hand, the plaintiff did not present enough evidence to bring his contract claim and North Carolina Wage and Hour Act claim against the company’s owner directly.  Thus, the claims against the individual owner were properly dismissed.

Categories: Judicial Decisions Tags: At-Will Employment, Breach of Contract, Case Commentary, Employment Contract, Labor and Employment, NC Court of Appeals, NC Wage and Hour Act

In Williams v. American Eagle Airlines, the North Carolina Court of Appeals addressed the interplay between union contracts and employment claims.  In this case, the plaintiff had been a part-time fleet service clerk for American Eagle, where she was a member of the Transport Worker’s Union, and was covered by a collective bargaining agreement.  She also had a full-time administrative position at Duke.  In 2006, the plaintiff injured her shoulder while moving luggage, started receiving workers’ compensation benefits, and eventually had surgery.  Following surgery, plaintiff resumed her duties at Duke, but did not return to American Eagle, apparently with representations that should not return to work at all.  Because of this inconsistency, American Eagle terminated her for dishonesty related to her workers’ compensation.

Rather than file a grievance through the Union, the plaintiff filed suit in state court, alleging claims for (1) breach of contract because she was fired without just cause; and (2) violation of the the North Carolina Retaliatory Employment Discrimination Act (“REDA”) because her termination was cause by her use of workers’ compensation.  At trial, the jury ruled against the plaintiff on the REDA claim, but found in her favor on the contract claims and awarded damages.

On appeal, the Court vacated the verdict because the contract claims were legally barred.  “When an employee’s claim is firmly rooted in a breach of a collective bargaining agreement and asserts no rights independent of that agreement, such claim is preempted by the Railway Labor Act (RLA).”  (The RLA governs unions in the airline industry.)  In other words, when an employee wants to challenge her termination as unlawful under a CBA, she usually must pursue the matter through the CBA’s grievance mechanism instead of in court.  As this plaintiff did that, the breach of contract claims were legally barred, and the verdict had to be vacated.

Categories: Judicial Decisions Tags: Airlines, Breach of Contract, Case Commentary, CBA, Grievance, Labor and Employment, NC Court of Appeals, REDA, TWU, Union, Workers' Compensation

Earlier this month, the North Carolina Court of Appeals issued Kornegay v. Aspen Asset Group LLC, an interesting case that raises and decides some key issues under the North Carolina Wage and Hour Act (NCWHA).  At issue was whether the employee-plaintiff had a contract that included bonus payments, and if so, whether those had to be paid to him.  Plaintiff worked for a real estate developer and claimed to have an oral (never written) contract that provided for bonus payments based on properties that he helped sell.  The primary issue was whether there was in fact an oral contract; the Court upheld the jury’s finding that there was an enforceable contract that included bonus payments.  Given that there was a contract for bonuses, the Court then turned to whether plaintiff was owed these bonues under the NCWHA.

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Categories: Judicial Decisions Tags: Attorneys' Fees, Bonus Payments, Breach of Contract, Case Commentary, Earned Wages, Labor and Employment, Liquidated Damages, NC Court of Appeals, NCWHA, North Carolina Wage and Hour Act, Wage and Hour, Wage Change Notice

In Franco v. Lipposcience, Inc., the North Carolina Supreme Court affirmed per curiam an NC Court of Appeals decision regarding employment at will.  The COA had issued a split-decision earlier this year, with Judge Wynn writing for the majority and Judge Erwin dissenting.  The plaintiff, who had been the VP of Marketing, was terminated and sought to bring a breach of contract claim.  At issue was whether he had a partial employment contract, or whether he was an ordinary at-will employee.

Most employees are employed at will, which means they can be fired for almost any reason and without regard to the quality of their performance.  There are three general exceptions: (1) the employee has a contract with the employer, either individually or through a labor union; (2) federal and state statutes have created exceptions prohibiting employers from discharging employees based on impermissible considerations such as the employee’s age, race, sex, religion, national origin, or disability, or in retaliation for filing certain claims against the employer; and (3) the state courts have created a public-policy exception to the employment-at-will rule.

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Categories: Judicial Decisions Tags: Breach of Contract, Case Commentary, Employment At-Will, Employment Contract, Labor and Employment, NC Court of Appeals, NC Supreme Court