DeCarlo v. Bonus Stores, Inc.
| Docket Number: | 2007-FC-02287-SCT Linked Case(s): 2007-FC-02287-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 07-17-2008 Opinion Author: CARLSON, J. Holding: CERTIFIED QUESTIONS ANSWERED |
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| Additional Case Information: |
Topic: Federally certified question - Employment at will - Retaliatory discharge - Illegal activity exception - Individual liability Judge(s) Concurring: SMITH, C.J., WALLER AND DIAZ, P.JJ., GRAVES, DICKINSON, RANDOLPH AND LAMAR, JJ. Concur in Part, Concur in Result 1: EASLEY, J. Nature of the Case: CIVIL - FEDERALLY CERTIFIED QUESTION |
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| Party Name: | Attorney Name: | |||
| Appellant: | LEWIS DeCARLO |
NANCY ALLEN WEGENER,
JIM WAIDE |
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| Appellee: | BONUS STORES, INC. d/b/a BILL’S DOLLAR STORES, INC., JIMMY A. SCHAFER AND WILLIAM FIELDS | TIMOTHY W. LINDSAY, KENNETH E. MILAM, WALTER J. BRAND, AMY C. FELDER |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Federally certified question - Employment at will - Retaliatory discharge - Illegal activity exception - Individual liability |
| Summary of the Facts: | Lewis DeCarlo filed a complaint in the United States District Court for the Southern District of Mississippi against various defendants, including Bonus Stores, Inc., d/b/a Bill’s Dollar Stores, Inc., William Fields and Jimmy Schafer. DeCarlo was an employee of Bonus Stores, Inc., serving as its vice president of store operations until he was terminated. Jimmy Schafer was the president and chief executive officer of Bonus, which was headquartered in Columbia, Mississippi, having previously served as CEO of Bonus Stores of Florida, Inc. Bonus, Schafer, and Fields all filed motions for summary judgment. The district court granted the separate motions for summary judgment of Bonus, Schafer, and Fields and entered a final judgment dismissing DeCarlo’s complaint with prejudice. DeCarlo appealed to the United States Court of Appeals for the Fifth Circuit. The Fifth Circuit determined that there remained an issue concerning individual liability for the tort of retaliatory discharge, since no Mississippi court had addressed whether the employment-at-will doctrine bars action against individual defendants who participate in the retaliatory decision to terminate an employee within the course and scope of their employment. The Fifth Circuit certified this question of individual liability of defendants on these facts. |
| Summary of Opinion Analysis: | Issue 1: Retaliatory discharge Mississippi is an employment-at-will state to the extent that one who is under a contract of employment for an indefinite term may quit or may be terminated at the will of the employer, thus meaning that either the employer or the employee may have a good reason, a wrong reason, or no reason for terminating the employment contract. However, in McArn v. Allied Bruce-Terminix Co., Inc., 626 So. 2d 603 (Miss. 1993), the Court carved out two exceptions to the employment-at-will doctrine where an employee who refuses to participate in an illegal act shall not be barred from bringing an action in tort for damages against his employer and where an employee who is discharged for reporting illegal acts of his employer to the employer or anyone else is not barred from bringing action in tort for damages against his employer. In this case, DeCarlo suspected that Retail Services, a business in which Schafer, Bonus’s CEO, was a fifty-percent owner, was billing Bonus for refurbished Wal-Mart fixtures which were never delivered to Bonus; DeCarlo reported this perceived illegal activity to Bonus’s chief financial officer who told DeCarlo to “lay low;” Schafer immediately thereafter began to repeatedly harass DeCarlo; DeCarlo reported Schafer’s conduct to several members of Bonus’s board of directors; Schafer, at the direction of Bonus’s board of directors, terminated DeCarlo’s employment with Bonus less than a month after DeCarlo reported Schafer’s conduct to several directors; and Schafer was eventually terminated by Bonus. Thus, the case involves purported illegal activity which unquestionably would have a harmful effect on the employer’s business, i.e., loss of corporate income. Discharge in retaliation for an employee’s good faith effort to protect the employer from wrongdoing constitutes an independent tort and may support punitive damages. Issue 2: Individual liability There is nothing in McArn or its progeny which would extend the narrowly carved out exceptions to the employment-at-will doctrine to create individual liability for the tort of retaliatory discharge if the individual defendant/co-employee’s participation in the discharge was deemed to be in the course and scope of the individual defendant’s employment. In McArn, the Court clearly limited liability to the employer. Also, limiting liability to the employer in the present case is consistent with the doctrine of respondeat superior as well as the concepts of principal and agency. Thus, the laws of Mississippi do not allow for individual liability for the tort of retaliatory discharge even if the individual defendant’s participation in the discharge was in the course and scope of the individual defendant’s employment. |
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