# Burk v. K-Mart Corp.

> Supreme Court of Oklahoma · February 7, 1989 · 770 P.2d 24

URL: https://www.frixlaw.com/law-library/cases/9534095

## Case

- **Full name:** Helen Jenean BURK, Plaintiff, v. K-MART CORPORATION, Defendant
- **Court:** Supreme Court of Oklahoma
- **Decided:** February 7, 1989
- **Citations:** 770 P.2d 24; 4 I.E.R. Cas. (BNA) 182; 1989 OK 22; 1989 Okla. LEXIS 17; 1989 WL 8317
- **Precedential status:** Published
- **Opinion:** Dissent by Simms
- **Judges:** Hargrave, Hodges, Doolin, Wilson, Summers, Kauger, Opala, Lavender, Simms
- **Cited by:** 298 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9534095

## How later opinions describe it (automated extraction)

- holding that an employee who is discharged for refusing to act in violation of an established and well-defined public policy or for performing an act consistent with a clear and compelling public policy may bring a tort claim for wrongful discharge
- recognizing the public policy tort exception to employment-at-will rule while rejecting an implied obligation of good faith and fair dealing when terminating an at-will employee
- recognizing that the public policy exception to the at-will termination rule creates a cause of action in tort

## Opinion text

SIMMS, Justice,
dissenting:
I embrace the majority’s initial statement that “we reject the implication of an obligation of good faith and fair dealing in every employment-at-will contract”, and that “it is therefore unnecessary for us to address the remaining issues in this matter”. However, I am at a loss to understand why the majority circuitously adopts a new cause of action in tort for that which it initially rejects.
The plaintiff’s reliance on Hall v. Farmers insurance Exchange, Okl., 713 P.2d 1027 (1985), as a basis for her cause of action is misplaced. Crucial to our resolution in Hall , was the fact that there was a written contract which formed the basis of Hall’s recovery.
The defendant in Hall exercised his right to terminate an at-will employee. The facts showed that the termination right was exercised as an effort to deprive Hall of future income from insurance policies Hall had sold as an agent for his employer/principal, the defendant. The defendant was liable to Hall for contract damages arising from its wrongful denial of a vested contract right.
The wrongful termination, standing alone, did not give the employee, Hall, a right to recover damages. The amount of and right to damages in Hall was determined by the terms of the written contract between the agent and the principal. Hall had vested contractual rights to future commissions which he had already earned, as per the terms of the agency agreement. Had there been no contract upon which to measure damages, there could have been no recovery, even if the termination was wrongful. There is no written contract in the present dispute.
More recently, we stated that Hall “stands for the rule that an agent may recover from the principal when the latter has, in bad faith, deprived him of the fruit of his own labor.” See: Hinson v. Cameron, Okl., 742 P.2d 549, 554 (1987). In that case, this Court rejected the precise cause of action it now adopts. Today's pronouncement appears to overrule Hinson without stating as much.
Like this case, Hinson came to us with very few facts that could be used to fashion a meaningful and narrow rule of law. Unlike this case, however, because Hinson was an appeal from a grant of summary judgment, we did have certain presumptions of fact upon which to base our holding. In that case, this Court first considered the various “public policy” underpinnings for the alleged tort of bad faith discharge from employment. There, as here, there were no facts suggesting: (a) that the plaintiff had been ordered to do an illegal act; (b) that she was denied an opportunity to exercise any legal right; (c) that she was prevented from performing an important public obligation; or (d), that she was terminated for expressing concerns about her employer’s legal or ethical misconduct. Finding none of the public policy exceptions in the facts of that case, we were “compelled to conclude that [Hin-son] has no actionable tort claim for wrongful discharge.” 742 P.2d at 552, 553 .
Similarly, we refused to accept Hinson’s suggestion that we recognize an implied covenant of good faith and fair dealing in employment-at-will contracts. To the contrary, we determined that, even assuming such a covenant existed, that covenant would “not operate to forbid employment severance except for good cause”, and that adoption of a contrary rule “would subject each discharge to judicial incursions into the amorphous concept of bad faith.” Hinson v. Cameron, supra., at 554 . (citation omitted). We quite specifically “decline[d] to impose upon the employer a legal duty not to terminate an at-will employee in bad faith.” Id.
The questions certified are broadly stated. This is presumably so because the Federal Court had only allegations of fact, as yet unproven, upon which to frame the questions. Today’s pronouncement is, unfortunately, broader still, with no facts to form the foundation for the new rule of law being created.
*33 The majority states that “[w]e reject the implication of an obligation of good faith and fair dealing in every employment-at-will contract”, but that “[a]n employer’s termination of an at-will employee in contravention of a clear mandate of public policy is a tortious breach of contractual obligations.” In so holding, the majority has answered question three (3) and partially answered question five (5). Curiously, the majority first states that “[bjecause we answer the first question in the negative it is unnecessary for us to address the remaining questions.” By failing to answer the remaining questions regarding mutuality, (question 2), and mitigation (6), today’s pronouncement opens the floodgate to prospective litigation and “subject[s] each discharge to judicial incursions into the amorphous concept of bad faith.” Hinson v. Cameron, supra, at 554 . This neither serves the cause of equity nor the interests of the marketplace.
Since the majority appears to be intracti-bly committed to “this new cause of action in tort”, some guidelines for its application should be plainly stated. The majority states that: “[i]n light of the vague meaning of the term public policy we believe the public policy exception must be tightly circumscribed”. This is wholly insufficient as a guide to trial courts. The majority cites Parnar v. Americana Hotels, Inc., 65 Haw. 370 , 652 P.2d 625, 631 (1982), but does not explicitly adopt the limiting language therein as the guidelines to be used in Oklahoma.
I perceive the creation of this new tort of “bad faith” as a transparent attempt to avoid the necessity of overruling Hinson while achieving a contrary result. In so doing, the majority fails to distinguish between Hinson’s refusal to adopt a “bad faith breach of contract” theory, from the “tort” of bad faith, by any means other than the available remedies. I see no public policy being served by subjecting employers to the spectre of punitive damages for termination of an at-will employee.
I would prefer to see this Court remain loyal to our existing rules for at-will employment relations. However, if we are to recognize a form of recovery for a terminated at-will employee, we should adopt the more reasonable approach used by the Supreme Court of Arizona:
“We do, however, recognize an implied covenant of good faith and fair dealing in the employment-at-will contract, although that covenant does not create a duty for the employer to terminate the employee only for good cause. The covenant does not protect the employee from a “no cause” termination because tenure was never a benefit inherent in the at-will agreement.”
Wagenseller v. Scottsdale Memorial Hospital, 147 Ariz. 370 , 710 P.2d 1025, 1040 (1985). (emphasis added).
If it is inevitable that Oklahoma recognize a “public policy” exception to the at-will termination rules previously applied, the exception should at least be grounded in contract law. Similarly, the remedies available for the breach of the covenant not to terminate an at-will employee in violation of public policy should be contract remedies.
The majority avoids any mention of mutuality. What of the employee’s obligations to the employer? If the majority is willing to fashion a broad rule allowing punitive damages for “bad faith termination in violation of public policy”, will an employer be permitted to recover punitive damages from an employee if that employee quits in bad faith? Certainly no rule of law which only provides a “bad faith” remedy against one party to a transaction without a similar remedy afforded the other party could ever “serve” the cause of equity. If public policy now provides a remedy against an employer who terminates an at-will employee in bad faith, i.e.: for demanding that the employee act against public policy, then the employer, too, should have the same remedy against an employee who quits when the employee is prevented from violating the same public policy.
The majority overrules Hinson without specifically stating such. Further, today’s pronouncement creates a broad new cause of action which destroys Oklahoma’s em *34 ployment-at-will doctrine and, at the same time, creates a climate that could foster frivolous and oppressive litigation. This “new” tort is also unnecessary; statutory remedies presently exist for the wrong allegedly committed in this case. (See majority opinion, footnote 4). Here, as in other situations, public policy considerations are best determined by the legislature. For these reasons, I respectfully DISSENT.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9534095. Public record. Not legal advice.