Beye v. Bureau of National Affairs

WILNER, Judge. On or about February 8, 1982, appellant Howard Beye formally resigned his position as an employee of The Bureau of National Affairs (BNA). He was, at the time, an “at will” employee working in a BNA warehouse; he had no fixed term of employment. In an amended declaration filed in the Circuit Court for Montgomery County, Beye averred that his resignation was coerced and thus constituted a constructive discharge, that it was engineered by three of his supervisors, Rudolph Thomas (Thomas), Edward Moore (Moore), and W.B. Shaw (Shaw), and that it was in retaliation for his having reported certain criminal activity on the part of BNA employees, including Thomas.

More particularly, Beye alleged that: (1) From 1971 to 1974, he received regular promotions and merit increases and was promised a promotion to the position of warehouse supervisor at BNA’s Rockville distribution center. (2) During that period, he became aware that Thomas was conducting illegal gambling operations and was operat ⁶⁴⁶ ing a private business on company time; he reported those practices to BNA officials, and, when no action was taken, he reported the gambling activity to the Montgomery County police. As the result of evidence supplied by Beye, the police obtained a search warrant, but “did not make any arrests based on assurances by the defendant Shaw that the defendant BNA would handle the matter internally.” No such action was ever taken, however, but thereafter Shaw became increasingly hostile to Beye. (3) In 1976, the distribution center was reorganized, as a result of which Thomas became Beye’s supervisor.

In contrast to his earlier experience, Beye received no merit increases or salary reclassifications, and his performance ratings dropped from “superior” or “outstanding” to “average” or worse than average. Beye was harassed by fellow employees, including Thomas and Shaw, was refused a transfer, and was denied the promotion that had been promised to him. (4) In 1981, Beye learned that certain BNA employees were using BNA facilities for the sale of marijuana. He reported that activity to the county police department and, at its request, acted as an informant.

In that capacity, he made certain police-approved purchases of marijuana and one purchase of a stolen pistol. Based on this assistance, several BNA employees were arrested, indicted, and ultimately convicted of various controlled dangerous substance offenses; some were also indicted for unlawfully transporting a handgun. (5) Following their arrest, these employees were released on bond and returned to work at BNA. One of them indirectly threatened Beye, i.e., he communicated a threat to Moore who, in turn, informed Beye.

Beye informed Moore, the manager at the center, of his role in the criminal investigation, and Moore promised to protect Beye. On February 2, 1982, Moore approved administrative leave for Beye “and advised him not to return to work at that time ⁶⁴⁷ because of the threat by the reemployed BNA worker and because Moore knew that Beye’s safety was at stake.” (6) On February 8, 1982, Moore, with Shaw’s approval, demanded that Beye return to work immediately or be fired. Moore refused to give Beye any assurances with respect to his safety and refused as well Beye’s request for a transfer or for annual leave. Moore offered to permit Beye to resign, rather than be fired, with a promise of twenty-eight weeks severance pay, a letter of recommendation from BNA, and consideration for reemployment by BNA “after the situation involving the arrested BNA employees had been cleared up.” In fear of his life and upon those promises, Beye signed a letter of resignation.

(7) Some of these promises were not kept. Beye received no letter of recommendation. He was denied his request for reinstatement and was told by Moore that he would never be considered for reemployment. 1 The actions of Thomas, Moore, and Shaw were done as agents for BNA. Upon these averments, Beye sued BNA, Thomas, Moore, and Shaw in a five-count amended declaration.

Count I, against all four defendants, was for abusive discharge; Beye claimed a wrongful constructive discharge in retaliation for his exposure of the criminal activity of BNA employees. Counts II and III charged BNA with breach of contract. Count II claimed the existence of a “common law contract of employment” based on Beye’s “reasonable expectation of continued employment with BNA.” Count III was premised on “the implied covenant of good faith and fair dealing existing in the employment contract between the parties,” which, Beye asserted, precluded his discharge or forced resignation “without just cause.” Count IV charged all four defendants with the intentional infliction of emotional distress, and Count V charged them with civil conspiracy. ⁶⁴⁸ All defendants demurred to the amended declaration. From, the sustaining of those demurrers, without leave to amend, Beye brings this appeal and presents us with a nice thicket of issues.

The underlying question, of course, is whether the averments of the amended declaration suffice to state one or more causes of action. More particularly, the questions, as presented by the parties, are as follows: A. As to Count I: (1) Is a cause of action for abusive discharge available when the employee has, in fact, resigned; is there such a thing as “constructive discharge” and, if so, is it sufficiently alleged in this case? (2) If the cause of action exists in the case of a “constructive discharge,” is it available where the discharge results from mere “whistle-blowing” — i.e., the voluntary, unsolicited reporting of criminal activity on the part of fellow employees? (3) In any event, does the action lie against anyone but the employer; can Thomas, Moore, and Shaw — individual company officials — be sued?

B. As to Counts II and III, does Maryland recognize “common law contracts of employment” or actions based on an “implied covenant of good faith and fair dealing” in what is otherwise an “at will” employment? C. As to Count IV, do the allegations suffice to charge the tort of intentional infliction of emotional distress? D. As to Count V, do the allegations suffice to charge a civil conspiracy? It will not be necessary for us to address all of these issues.

We shall conclude, on the basis of the averments in the amended declaration, that Mr. Beye was not constructively discharged, and that because he was not constructively discharged he was not abusively discharged. That determination will obviate the need to consider Questions A(2) or A(3) and will, of itself, supply the answer to Questions B and D. ⁶⁴⁹ Count I — Abusive Discharge In Adler v. American Standard Corp., 291 Md. 31 , 432 A.2d 464 (1981), the Court of Appeals, responding to questions certified to it by the United States District Court, concluded that (1) as a general rule, Maryland continues to adhere to the common law principle “that an employment contract of indefinite duration, that is, at will, can be legally terminated at the pleasure of either party at any time” (p. 35 [ 432 A.2d 464 ]), but (2) Maryland does “recognize a cause of action for abusive discharge by an employer of an at will employee when the motivation for the discharge contravenes some clear mandate of public policy.” (p. 47 [ 432 A.2d 464 ]). Adler is the backdrop for our consideration of Count I; it is the well-spring of the theory of liability asserted by Mr. Beye. In order to have an abusive discharge under Adler , there must, of course, first be a discharge — a termination of the at-will employment by the employer.

Normally, an employee who resigns is not regarded as having been discharged, and thus would have no right of action for abusive discharge. The law is not entirely blind, however. It is able, in most instances, to discard form for substance, to reject sham for reality. It therefore recognizes the concept of “constructive discharge”; in a proper case, it will overlook the fact that a termination was formally effected by a resignation if the record shows that the resignation was indeed an involuntary one, coerced by the employer.

The Court of Appeals flirted with this concept many years ago in Cumb. & Penn. R.R. Co. v. Slack, 45 Md. 161 (1876). The case focused on whether Slack, who had been employed by the railroad on an annual basis as a general superintendent, was discharged in violation of his contract. The record showed that on April 8, the company president informed Slack that he (the president) had decided to reorganize the local management of the railroad under one ⁶⁵⁰ head, and that he had selected one of the vice-presidents “to assume charge of the railroad.” The letter continued: “I presume you will prefer to retire by means of a resignation.

It is hereby understood that the same is accepted, and you will please telegraph me of its transmission, as I have instructed the 2nd Y. Prest, to take entire charge of the railroad immediately on receipt of my letter. Please confer with Mr. Millholland in turning over the papers in the Supt. office.” In response to this letter, Slack relinquished control to Millholland and left. The next day, he wrote to the company president, formally resigning the position of general superintendent, to take effect at once. He testified that he wrote that letter “because he was ordered to do it” in the president’s letter.

The Court agreed. At p. 175: “In our opinion, that letter [from the president] operated as a positive and peremptory dismissal of the appellee [Slack] from the service of the company; his note written the next day cannot change its character or construction, it does not show that he voluntarily resigned, nor can it be construed as acquiescing in his dismissal.... Construing these papers in the light of all the circumstances, it seems impossible to escape the conclusion that [Slack] correctly understood [the president’s] letter as a positive and final discharge, leaving him no option or choice in the matter____” That case was, of course, rather clear-cut. The more recent cases are less so.

Most often arising under the Federal labor relations or civil rights acts, they usually do not involve resignations so directly required, but rather present situations of employees quitting in response to what they regard as unfair and onerous working conditions. It is largely in that context that the courts — primarily the Federal courts — have dealt with the concept of constructive discharge. There seems to be little dispute over the definition of the concept. Though not always employing precisely the same ⁶⁵¹ language, most courts seem to have adopted the rule that a constructive discharge occurs in this context when an employer deliberately causes or allows the employee’s working conditions to become “so intolerable” that the employee is forced into an involuntary resignation.

See Young v. Southwestern Savings and Loan Association, 509 F.2d 140, 144 (5th Cir. 1975), and cases cited therein; Bourque v. Powell Electrical Mfg. Co., 617 F.2d 61 (5th Cir.1980); Thompson v. McDonnell Douglas Corp., 552 F.2d 220 (8th Cir. 1977); Johnson v. Nordstrom-Larpenteur Agcy., Inc. 623 F.2d 1279 (8th Cir.), cert. denied 449 U.S. 1042 , 101 S.Ct. 622 , 66 L.Ed.2d 504 (1980); Muller v. United States Steel Corporation, 509 F.2d 923 (10th Cir.), cert. denied 423 U.S. 825 , 96 S.Ct. 39 , 46 L.Ed.2d 41 (1975); Irving v. Dubuque Packing Co., 689 F.2d 170 (10th Cir.1982); J.P. Stevens & Co., Inc. v. N.L.R.B., 461 F.2d 490 (4th Cir.1972); Neale v. Dillon, 534 F.Supp. 1381 (E.D.N.Y.), aff’d mem. 714 F.2d 116 (2d Cir.1982); but compare Coe v. Yellow Freight System, Inc., 646 F.2d 444 (10th Cir.1981). See also Baxter and Farrell, Constructive Discharge — When Quitting Means Getting Fired, F.Empl.Rel.LJ. 346-68 (Wint. 1981/82); Annot., Circumstances In Title VII Employment Discrimination Cases (42 USCS §§ 2000e et seq.) Which Warrant Finding Of “Constructive Discharge” Of Discriminatee Who Resigns Employment, 55 A.L.R.Fed. 418 (1981). In applying this standard, courts have had to wrestle with at least two subsidiary, and somewhat overlapping, questions; namely, (1) whether, in order to have a constructive discharge, the employer’s acts (or omissions) must have been taken with the express intention of forcing a resignation, and (2) what criterion should be used to determine whether the conditions actually prompting the resignation were, in fact or in law, so intolerable as to justify deeming the resignation an involuntary one.

As to the first question, some courts have suggested that a constructive discharge does not occur unless the employer’s actions are both deliberate and taken with the intention ⁶⁵² of forcing a resignation. See, for example, Muller v. United States Steel Corp., supra, 509 F.2d 923, 929 ; Johnson v. Bunny Bread Co., 646 F.2d 1250, 1256 (8th Cir.1981); Greenspan v. Automobile Club of Michigan, 495 F.Supp. 1021 (E.D.Mich.1980); Carino v. Univ. of Oklahoma, 25 FEP Cases 1332 (W.D.Okla.1981); and cf J.P. Stevens & Co., Inc. v. N.L.R.B., supra, 461 F.2d 490 . In most of the decisions, however, and particularly in the cases arising under the civil rights laws, such express intent has not been regarded as necessary. It suffices if the employer’s actions were deliberate or, in cases of harassment by supervisors or fellow employees, if the employer was aware of the situation and permitted it to continue.

See Bourque v. Powell Electrical Mfg. Co., supra, 617 F.2d 61 ; Calcote v. Texas Educational Foundation, 578 F.2d 95 (5th Cir.1978); Young v. Southwestern Savings and Loan Association, supra, 509 F.2d 140 ; Pittman v. Hattiesburg Municipal Separate School District, 644 F.2d 1071 (5th Cir.1981); Clark v. Marsh, 665 F.2d 1168 (D.C.Cir.1981); Alicea Rosado v. Garcia Santiago, 562 F.2d 114 (1st Cir.1977); E.E.O.C. v. Hay Associates, 545 F.Supp. 1064, 1085 (E.D.Pa. 1982); Frazer v. KFC National Management Co., 491 F.Supp. 1099 (M.D.Ga.1980), aff'd mem.