Haddle, Michael V. v. Garrison, Jeanette G., et al. (12/14/1998)

By: Dan Baron, Medill News Service

Questions presented

Does loss of ""at-will"" employment give rise to compensable damage under 42 U.S.C. section 1985(2)?

Brief

Michael Haddle worked for almost ten years as a ""cost report expert"" for Healthmaster, Inc., a Georgia-based home health care company that once employed 3,500 people, before he became a government informant against the company and was fired.

In recent years, the company and its owner, Jeanette Garrison, were targeted for Medicare fraud. A federal suit against Garrison accused her of wrongfully firing another employee less than a week after she and the company were indicted on 133 counts of Medicare fraud. The two-year fraud investigation by the Justice Department resulted in Garrison being fined $16.5 million and sentenced to 33 months in prison.

Garrison had been a leading fundraiser for the Democratic Party in Georgia and co-chaired the Clinton-Gore campaign there in 1992. One of the charges against her: reimbursing employees for political contributions that totaled more than $200,000. Fraudulent reimbursements also covered expenses for a trip by Garrison to the 1992 Democratic Convention, partial purchase of a travel agency, a Mercedes Benz, and tickets to the 1991 World Series in Minnesota.

Haddle's testimony in the federal civil suit against Garrison suggests the basis for his ""wrongful termination suit."" In his testimony, Haddle indicated that Garrison vowed to punish employees who betrayed the company. He testified that she told him: ""Whoever testifies against me, we will destroy those witnesses."" Though Haddle claims his former employer sought retaliation for his testimony, Healthmaster says he was fired to save the company money after it filed for bankruptcy.

Haddle filed suit in federal court alleging that Healthmaster conspired to have him fired in retaliation for obeying a federal grand jury subpoena and to deter him from testifying at their upcoming criminal trial for Medicare fraud. In dismissing the suit, the District Court ruled on the authority of Morast v. Lance, 807 F. 2d 926 (1987) that an at-will employee discharged pursuant to a conspiracy that violates civil rights laws has suffered no actual injury because there is no constitutionally protected interest in continued employment.

The 11th Circuit Court of Appeals affirmed in an unpublished opinion, also holding that ""an at-will employee has no constitutionally protected interest in continued employment, and so can't sue under 42 U.S.C. 1985(2). The civil rights act ""creates a cause of action"" where ""Two or more persons conspire to deter any party or witness in any court of the United States to injure such party or witness on account of his having so attended or testified."" Haddle's appeal, in essence, asks ""Do federal civil rights laws protect me from being fired for speaking out?""

This case concerns ""at-will employees"" whose employment arrangements are not for a definite term, according to Richard Seymour of the Employment Discrimination Project for the Lawyers' Committee for Civil Rights Under Law in Washington, D.C. Seymour estimates that ""about 89 percent"" of all employees in the private workforce can be characterized as ""at-will employees.""

Very few Supreme Court cases address the issue of at-will employment, according to the National Employment Lawyers Association. Experts suggest a reversal in this case could spur an increase in the number of whistle-blower cases filed in federal court, according to Lawyers Weekly USA.

Amici in the case include the National Whistleblowers Association. Haddle's petition for certiorari was granted by the Supreme Court on May 26, 1998.

On Dec. 14, 1998, a unanimous Supreme Court reversed, holding that the sort of the harm alleged by Haddle--essentially third-party interference with an at-will employment relationship--states a claim for damages under §1985(2). Writing for the Court, Chief Justice William Rehnquist noted that the 11th Circuit's rule in Morast conflicts with the holdings of the 1st and 9th Circuits and disagreed with the 11th Circuit's conclusion that an at-will employee must suffer an injury to a ""constitutionally protected property interest"" to state a claim for damages under §1985(2).