The Georgia Supreme Court has accepted certiorari to address what has long been hallowed ground: Georgia’s status as a staunch at-will employee state. It will review the Georgia Court of Appeals’ opinion in Balmer v. Elan, 261 Ga. App. 543 (2003), in which the immediate appellate court refused to carve out an exception for employees who take affirmative action in reliance on an employer’s promise not to fire – only to have the employer go back on its word.
When Elan, an Irish pharmaceutical company, terminated several workers from its Gainesville facilities following an inspection by the Food and Drug Administration (“FDA”), the former employees sued, claiming they had been wrongfully discharged since Elan executives had orally promised them they would not be fired for cooperating with the inspection. According to the discharged employees, although they had fully cooperated and provided truthful information to the FDA, the official reason Elan gave for firing them was that they had given the agency false information, withheld other information and deviated from procedures. After the trial court dismissed their Complaint, the former employees appealed.
Arguing Elan had breached its promise not to fire them, the former employees essentially tried to convince the Court of Appeals the “freedom to contract” is a public policy exception to the general rule that at-will employment in Georgia may be terminated for any reason or no reason at all. In other words, the employees argued that by promising not to fire them, the corporation had given up its immunity from liability for wrongful discharge and transformed the employees’ at-will employment into something else. The Court disagreed.
Holding that an at-will employee has no remedy for wrongful discharge except where the legislature has created a specific exception, the Court found no existing public policy exception to state law for the “freedom to contract.” Thus, the Court held, a wrongful discharge claim based on such an exception would necessarily fail. Moreover, an oral promise not to fire is, in essence, no more than an oral employment contract for an indefinite time period and is terminable at the employer’s will.
The former employees next argued they had a cause of action because they had relied on Elan’s promise of continued employment to their detriment (known as “promissory estoppel”). This claim was also rejected. The Court held the doctrine of promissory estoppel did not apply to Elan’s promise not to fire because it was for an indefinite length of time and the terminated employees could not show they had substantially changed their position to their detriment in reliance on the promise.
Finally, the terminated employees asserted they had been defrauded by Elan’s promise not to fire them. Again, the Court found no available remedy. Fraud cannot be predicated on a promise that is unenforceable at the time it is made. Since the former employees’ employment contracts were terminable at will and unenforceable, any promise not to fire them could not be fraudulent.
The Georgia Supreme Court will hear oral arguments on the former employees’ breach of contract, estoppel and fraud claims this spring and decide if the Court of Appeals was correct in dismissing them. If the decision is upheld, Balmer will stand as another failed attempt to persuade the courts to add exceptions to Georgia’s employment at-will doctrine and reflect what has been the courts’ steadfast insistence that the creation of any exception to at-will is a job for the legislature. If it is reversed, the rules of at-will employment in Georgia will be drastically changed, and employers will have to take care that what they say to their employees does not turn an at-will relationship into something more permanent.
