Due Process

Wynkoop v. Town of Cedar Lake (Ind. Ct. App. June 29, 2012)

This case involves the often-litigated issue of whether one has a constitutionally protected interest in one’s employment. In this case, the Court found the plaintiff had no constitutionally protected interest such that he was entitled to due process before being terminated.

The majority opinion, written by Judge Bailey, includes a thorough discussion of Indiana and Federal precedent involving due process rights in the employment context. As Judge Bailey notes, in Indiana, employment is either “at-will” (terminable at any time) or for a definite period. A presumption exists that one has no protected interest in at-will employment, but the presumption can be rebutted with evidence that the employment contract contains clear job security provisions. The majority opinion rejected the plaintiff’s claim that his employer’s employee handbook created a protected interest in his employment. The majority opinion discussed numerous provisions of the manual, noting that all provisions must be read together. Although the exact manual discussed by the majority will not be an issue in other cases (unless of course, another case arises involving this same employer), the majority’s discussion provides a useful example of how courts will interpret some general employment rules and provisions.

Chief Judge Robb concurred in the result, agreeing that summary judgment was proper, but for an entirely different reason - the employee’s failure to establish the elements of promissory estoppels, an equitable doctrine that bars one from backing out of a promise where another has relied on that promise to his or her detriment. Judge Robb stated: “When an employer drafts and offers an employee handbook containing specific disciplinary and grievance procedures, or makes promises regarding the same, I believe the provisions of the handbook and the promises of the employer should mean something.” Judge Robb thoughtfully explained that the employer provided its employees with a handbook describing disciplinary and grievance procedures:

If the Manual is to mean anything at all, these provisions allowing for progressive discipline and discipline for just cause must be given effect. In an at-will state such as Indiana, an employer is not obligated to furnish to its employees a statement of its employment policies. Having made statements in writing about the terms and conditions of employment, however, it is fundamentally unfair to allow an employer to essentially declare those statements illusory and raise the “employment at will” doctrine as a shield when it is called to task by an employee who can demonstrate detrimental reliance on the employer’s failure to abide by those terms and conditions. 

Judge Robb went on to conclude, however, that the employee, in this case, failed to show that he relied to his detriment on the provisions in the employee handbook. Without detrimental reliance, the employee cannot establish promissory estoppel.

Judge Robb’s concurring opinion should be heeded by any practitioner litigating an employment termination case. Her analysis, although not adopted by the majority, in this case, could certainly carry the day before a different panel. Therefore, practitioners should be prepared to discuss not only whether a terminated employee had a protected interest in the employment but also, assuming a protected interest, whether the employee relied to his or her detriment on any promise made by the employer regarding his or her employment.