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«EMPLOYEE RIGHTS 1 (People’s Law School) I. Types of Employment: A. Private Sector Employment: 1. “Golden Rule” Employment”At-will” ...»

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Lyons Law Firm

Keith M. Lyons Jr.* *Also Admitted to

Practice Law in Oregon

A Professional Corporation

512 South 8th Street

Las Vegas, NV 89101


Telephone: (702) 432-8655 Facsimile: (702) 432-8715


(People’s Law School)

I. Types of Employment:

A. Private Sector Employment:

1. “Golden Rule” Employment”At-will” Employment:

There is a presumption in the state of Nevada that all employees are at-will.

American Bank Stationery v. Farmer, 106 Nev. 698, 701, 799 P.2d 1100, 1101-02 (1990). This presumption can be rebutted by proof of the existence of an express or implied contract that the employee can only be terminated for “just” or “good” cause.

2. The Application:

Generally, an at-will employee can be terminated whenever and for whatever cause by an employer without liability for wrongful discharge if the employee’s employment is not for a definite term and if there is no contractual or statutory restrictions on the right of discharge. Smith v. Cladianos, 104 Nev. 67, 68, 752 P.2d 233 (1988).

//// //// The following material is not intended to constitute legal advice. Prior to making any decisions on the information contained herein you should seek out and discuss with an attorney any questions or decisions you are about to make concerning the legal issues set forth herein.

Lyons Law Firm th 512 South 8 Street ΠLas Vegas, Nevada 89101 Employee Rights Peoples Law School Page 2

3. Employee Handbooks/Work Rules:

(a) Do I Have to Follow the Employee Handbook?


(b) Do Employers Have to Follow the Employee Handbook?

In Vancheri v. GNLV Corp., 105 Nev. 417, 422, 777 P.2d 366 (1989), the Nevada Supreme Court held that the mere existence of customary or informal procedures employed in cases of employee dismissal would not vitiate an essentially at-will employment. In Vancheri, there was an established and customary disciplinary procedure that was ordinarily followed by the employer, but this procedure was gratuitous and unilateral and was not reduced to writing or incorporated in a handbook that was delivered to the employee and "acknowledged" by the employee. Id., 777

P.2d at 369. The Court stated that:

Standardized disciplinary procedures are generally positive additions to a business. They provide employers a method of cautioning employees, and afford employees an opportunity to improve job performance in order to retain employment. They also create a general consistency and security in the work place. If we were to hold that the establishment of standard disciplinary procedures for employees is, in and of itself, sufficient to convert an at-will employee to an employee who can be fired only for cause, employers would be reluctant to continue to establish them.

Id., 777 P.2d at 369 - 370.

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In D’Angelo v. Gardner, 107 Nev. 704, 708 n.4, 819 P.2d 206, 209 n.4 (1991) the Nevada Supreme Court whether an employee handbook can become a contract of

continued employment and acknowledged:

Of course, the employer can easily prevent this inference from arising by including in its handbook an express disclaimer of implied contractual liability of the type found in Perry v. Sears, Roebuck & Co., 508 So.2d 1086, 1088 (Miss.1987). In Perry, the pension plan manual at issue stated in bold type, "Employment rights not implied," and further stated that "Participation in the plan does not... interfere in any way with the right of the company to discharge or terminate you at any time." In light of these statements, the court correctly found that no inference of implied contractual liability was present; thus, the court held that summary judgment was proper.

–  –  –

It there is an unambiguous at-will disclaimer in an employee handbook, an employee can be terminated whenever and for whatever cause by an employer without liability for wrongful discharge. See e.g. Smith v. Cladianos, 104 Nev. 67, 68, 752 P.2d 233 (1988).

–  –  –

An express contract is a contract in writing or an oral contract that the employee can only be terminated for “just” or “good” cause. An implied contract is one which is implied from the circumstances and must be supported by substantial evidence. In Yeager v. Harrah’s Club, Inc., 111 Nev. 830, 837, 897 P.2d 1093 (1995) the Nevada Supreme Court stated that an employee who alleges the existence of a long-term employment contract must supply some corroboration that a contract has been formed specifically with that employee. This is usually done by a mixture of oral representations and company policies. In American Bank Stationery v. Farmer, 106 Nev. 698, 703, 799 P.2d 1100, 1102 (1990), the Nevada Supreme Court said that the "handbook is written evidence of an express oral contract between ABS and Farmer

that ABS would only fire Farmer for cause." In Farmer, the Court stated:

There is substantial evidence which rebuts the presumption that Farmer was an at-will employee and demonstrates that the jury was justified in finding he had an express oral contract with ABS that permitted his firing only for good cause. First when McDonald (the hiring authority for ABS) offered Farmer a job at ABS he told him that if he did his job adequately he would keep his job but if he did not perform well he would be fired. He added "(t)that's the way American Bank Stationary operates."

Id. at 702, 799 P.2d at 1102. In Beales v. Hillhaven, Inc., 108 Nev. 96, 102, 825 P.2d 212, 216 (1992)(citations omitted), the Nevada Supreme Court stated that an employee's subjective expectation of long-term employment does not alter her at will status.

Evidence to establish an implied or express contract between employee and employer must be presented to support the assertion that an employee can only be fired for cause and to overcome the rebuttable presumption of at will employment.

In Beales, the Court held that the employee handbook, termination policy guidelines and Beales testimony taken together can constitute sufficient evidence to prove that she was a "for cause" employee. Id., 825 P.2d at 216.

In the event there is a express or implied contract of employment the employee can still be terminated without liability to the company if they are terminated for “just” or “good” cause. In Southwest Gas Corp. v. Vargas, 111 Nev. 1064, 1078, 901 P.2d

–  –  –

693 (1995), the Nevada Supreme Court stated:

We hold that a discharge for “just” or “good” cause is one which is not for any arbitrary, capricious, or illegal reason and which is one based on facts (1) supported by substantial evidence, and (2) reasonably believed by the employer to be true.”

–  –  –

In D'Angelo v. Gardner, the Nevada Supreme Court stated:

[T]he covenant of good faith and fair dealing implied in an employment contract for indefinite future employment could, under certain limited circumstances be the basis for tort liability in a manner comparable to the tort liability incurred by the insurance companies when they deal in bad faith with their policyholders.

D'Angelo, 107 Nev. at 717, 819 P.2d at 215 (citing K Mart Corp. v. Ponsock, 103 Nev.39, 51, 732 P.2d 1364, 1372 (1987)).

In order to impose tort liability under Ponsock and D'Angelo, two criteria must first be established. First, the Employee must demonstrate the existence of a "special relationship" between the employer and employee. Ponsock, 103 Nev. at 49, 732 P.2d at 1370. D'Angelo, 107 Nev. at 717, 819 P.2d at 215. Second, the Employee must establish he was "not only terminated arbitrarily, but by artifice and fraud." D'Angelo 107 Nev. at 717, 819 P.2d at 215.

In discussing the requisite special relationship, the Nevada Supreme Court in

D'Angelo stated:

This tort is committed when an employer, acting in bad faith, discharges an employee who has established contractual rights of continued employment and who has developed a relationship of trust, reliance and dependency with the employer. By its very nature, this kind of employer-employee relationship cannot develop in at-will employment.

D'Angelo, 107 Nev. at 712, 819 P.2d at 211 - 212.

–  –  –

In Blankenship v. O' Sullivan Plastics Corp., 109 Nev.

1162, 1164 - 1166, 866 P.2d 293 (1993), the Nevada Supreme Court stated:

The Fifth Amendment to the United States Constitution provides that no person "shall be compelled in any criminal case to be a witness against himself....

–  –  –

(emphasis added)." Article 1, Section 8 of the Nevada Constitution provides that no person shall "be compelled, in any criminal case, to be a witness against himself.... (emphasis added)." In both the federal and state constitutions, the right against self-incrimination exists only in the context of criminal prosecutions by the government.

The instant case involves neither a criminal prosecution nor a threat thereof by any government entity. Rather, it involves a dismal attempt by O'Sullivan to obtain written commitments from its at-will employees not to erect barriers tending to disrupt substance abuse testing deemed warranted by an employee's involvement in either a plant accident or reasonably suspicious activities. The waiver of "any right of self incrimination" included in the Agreement thus expresses nothing more than an effort to secure an employee's pledge to cooperate with O'Sullivan's testing program. The premise is readily

seen from the full text of the provision at issue:

I also understand and agree, after becoming an employee of O'Sullivan Corporation, that I will waive any right of self incrimination with respect to all the above described testing [urine or blood tests for the detection of alcohol or illegal drugs]; that I will submit to such testing if I have a plant accident or if management has reasonable suspicion to request such testing and I will submit to random testing for one year after completing a company approved rehabilitation program.

(Emphasis added.) In its narrowest sense, the waiver at issue purports to gain the employee's commitment not to refuse substance abuse testing on grounds that the results of the test could prove to be self-incriminating. In no event could this construction of the waiver constitute interference with the constitutional guarantee against selfincrimination even if the government were a party to the Agreement. See Schmerber v. California, 384 U.S. 757, 86 S.Ct. 1826, 16 L.Ed.2d 908 (1966) (blood test evidence not within purview of Fifth Amendment privilege); McCray v.

State, 85 Nev. 597, 460 P.2d 160 (1969) (privilege not violated where accused coerced into providing source of real or physical evidence such as blood alcohol test, handwriting exemplars, and modeled clothing).

In its broadest sense, the waiver provision could be construed to apply to both cooperation in testing and in truthful responses to questions concerning the circumstances involved in the use of illegal drugs or alcohol. There is nothing contained in the Agreement suggesting that O'Sullivan was seeking to obtain the cooperation of its employees in order to gather evidence for later use by the state in criminal prosecutions. To the contrary, the inference to be drawn from the terms of the Agreement is that O'Sullivan desired to identify employees who Lyons Law Firm th 512 South 8 Street ΠLas Vegas, Nevada 89101 Employee Rights Peoples Law School Page 6 would not conform to O'Sullivan's substance abuse policy in order to provide a basis for disciplining, terminating or rehabilitating the violators. In any event, even under the broader construction of the waiver, it is clear that no constitutional right is implicated because of the absence of government action and involvement.

B. Public/Government Employment:

–  –  –

The State of Nevada, and/or the various state agencies and boards may dismiss or demote any permanent employee if they follow the appropriate procedure and have “cause” as that is defined in the state personnel procedures and the Nevada

Administrative Code. Nevada Revised Statute 284.385 states:

1. An appointing authority may:

(a) Dismiss or demote any permanent classified employee when the appointing authority considers that the good of the public service will be served thereby.

(b) Except as otherwise provided in NRS 284.148, suspend without pay, for disciplinary purposes, a permanent employee for a period not to exceed 30 days.

2. A dismissal, involuntary demotion or suspension does not become effective until the employee is notified in writing of the dismissal, involuntary demotion or suspension and the reasons therefor. The notice may be delivered personally to the employee or mailed to the employee at the employee’s last known address by registered or certified mail, return receipt requested. If the notice is mailed, the effective date of the dismissal, involuntary demotion or suspension shall be deemed to be the date of delivery or if the letter is returned to the sender, 3 days after mailing.

3. No employee in the classified service may be dismissed for religious or racial reasons.

Furthermore, Nevada Revised Statutes require the state to conduct internal administrative investigations and notify the employee of the allegations he or she is

facing. In particular, Nevada Revised Statute 284.387 states:

An employee who is the subject of an internal administrative investigation that could lead to disciplinary action against the employee pursuant to NRS 284.385

must be:

1. Provided notice in writing of the allegations against the employee before the employee is questioned regarding the allegations; and

2. Afforded the right to have a lawyer or other representative of the employee’s choosing present with the employee at any time that the

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