At-Will Employees Fired for Disputing Negative Personnel Records Can Now Sue for Wrongful Discharge

The Supreme Judicial Court has ruled in the case of Meehan v. Meditech, that terminating an at-will employee for filing a statutorily allowed rebuttal to adverse information added to their personnel record’s subjects employers to wrongful discharge damage claims.

The seven justices of the Supreme Judicial Court hearing Meehan v. Meditech

Negative information added to personnel files gives employees the right to rebut

Since 2010, the Massachusetts Personnel Records Statute G.L. c.149, §52C (“MPRS”) has had a provision that requires employers to notify an employee any time that they place negative information in the employee’s personnel records that “…has been or may be used to negatively impact the employee’s qualification for employment, promotion, transfer, additional compensation or the possibility that the employee will be subject to disciplinary action.”

Under this amendment, the employer has to provide notice within ten (10) days of placing the negative information in the employee’s personnel file. However, an employee has the right to request that the adverse information placed in their personnel record be removed or corrected if they believe it is inaccurate or incomplete. See Agency Checklists’ article of January 5, 2016, “What You Need To Know About The Employee Records Statute.”

If the employer refuses to remove or correct the information, the employee has the right to file their own written statement regarding the adverse information placed in their personnel record.

Under the MPRS, any submission by the employee explaining his or her position on the disputed personnel record must be maintained by the employer as long as the adverse information remains in the employee’s personnel record. If the employer ever transmits the adverse information in the employee’s personnel record to a third party, the employer must also transmit with it the employee’s position statement or explanation to that third party.

The MPRS only allowed employees to seek a remedy to have the adverse information expunged by legal process if they could prove that the employer had placed “in a personal record any information which such employer knew or should have known to be false.” Otherwise, the only other statutory remedy for violations of the MPRS was for the Attorney General to seek a fine of not less than $500.00, nor more than $2,500.00.

Now, however, in a groundbreaking decision, the Supreme Judicial Court has decided that the termination of an employee based upon the submission of a rebuttal to the adverse information is legally actionable as a matter of public policy even when the employee is an employee at will.

The facts leading to the SJC’s public policy decision

Terence Meehan (“Mr. Meehan”) worked for Meditech, a Westwood-based international medical software company, as a commissioned sales representative from November 2010, through the end of March 2017.

In April 2017, Meditech reorganized Mr. Meehan’s sales region and effectively demoted him and two other sales representatives out of the region’s twelve sales representatives to “sales specialists.”

Under the reorganization plan, sales specialists had a low potential to earn commission income compared to their prior position as sales representatives. The three sales specialists were to serve as “resources” for sales representatives but could not contact customers directly and could only interact with customers when called in by a sales representative. If a sales representative called in a sales specialist, then the sales specialist would receive just 10% of the relevant commission. However, if the sales representative did not call in a sales specialist, that representative would retain the entire commission. As a result, the opportunities for Mr. Meehan and the other two sales specialists to earn commission income became quite limited.

In addition to the economic incentives against a sales representative utilizing a sales specialist, the sales specialists’ supervisor placed limitations on the potential commission activities of Mr. Meehan and the other two sales specialists. The supervisor refused to approve Mr. Meehan’s requests to travel to visit potential clients even on the relatively rare occasions when a sales representative did seek to utilize his assistance.

On July 2, 2018, the supervisor placed Mr. Meehan and the other two sales specialists on a “Performance Improvement Plan,” which became part of their employment files with Meditech.

Mr. Meehan believed that this action by the supervisor may have been, in part, to divert management’s attention from the supervisor’s own performance issues, and during the next two weeks, Mr. Meehan prepared a lengthy rebuttal to the plan and his supposed performance issues as was his right under the MPRS.

On July 17, 2018, Mr. Meehan emailed his rebuttal to his supervisor and Meditech. Almost immediately after receiving Mr. Meehan’s rebuttal, Mr. Meehan’s supervisor and members of Meditech’s management, including Meditech’s CEO, convened a meeting to discuss Mr. Meehan’s rebuttal.

In that meeting, during the discussion of Mr. Meehan’s rebuttal, Meditech’s CEO expressed his opinion that the company should terminate Mr. Meehan immediately based on the statements in his rebuttal.

Following the meeting with the CEO of Meditech, Mr. Meehan’s supervisor emailed a summary of the meeting to Mr. Meehan. The first two paragraphs of the memo stated, in part:

[D]uring the internal discussions regarding Terry’s [Mr. Meehan] lengthy email sent as a Rebuttal to his July 2, 2018 performance improvement plan, [the CEO] felt that MEDITECH should terminate Terry’s employment effective immediately.” 

Later that same day, July 17, 2018, Meditech terminated Mr. Meehan.

Superior Court and Appeals Court affirm Mr. Meehan’s dismissal by Meditech

After Meditech fired him, Mr. Meehan retained an attorney who protested his termination to Meditech without any success.

In early 2019, Mr. Meehan filed a one-count complaint asserting a common law damage claim for wrongful termination against Meditech. His complaint asserted that notwithstanding his employment at will with Meditech, Meditech wrongfully terminated him in violation of public policy for exercising a statutory right: The right under the MPRS to submit documents in response to a negative personnel record created by his employer.

The Superior Court and then the Appeals Court both found in favor of Meditech based upon the grounds that under Massachusetts law, Mr. Meehan was an at-will-employee whom Meditech could terminate “with or without notice, for any reason, including no reason at all.”

Both courts found that the MPRS did not create an exception to the at-will-employee rule because in their respective opinions:

The firing of an at-will employee because of the content of a rebuttal filed by that employee in response to negative information placed in their personnel file by the employer was not the type of action that gave rise to a public policy exception to the employment-at-will doctrine: and also, because,If the courts allowed such a cause of action by judicial decision, they would effectively convert employment-at-will into a requirement of “just cause to terminate,” which neither court was willing to do.

Supreme Judicial Court reverses the Appeals Court and finds a right to seek damages.

Following the Appeals Court’s adverse decision, Mr. Meehan requested and received a grant of further appellate review from the Supreme Judicial Court.

After reviewing the history of the litigation and the Appeals Court decision, the Supreme Judicial Court held that the right of rebuttal and accuracy of the information in personnel files was important for employees to protect their ability to seek other employment and to enable other employers to make informed decisions about hiring them.

To the SJC, the right of rebuttal under the MPRS made labor markets work more fairly by allowing balanced information to be available to potential employers. Also, the SJC observed that the right of rebuttal might also be important for evaluating compliance with the laws of the Commonwealth, including those governing the terms and conditions of employment, such as workplace safety, the timely payment of wages, and the prevention of discrimination, and non-employment-related activity, such as those governing the environment and the economy.

Based on its analysis, the Court concluded that there was a public policy employment right recognized by §52C, including the right of rebuttal.

SJC provides a common law remedy for rebuttal-based terminations

Having found that an employee’s right of rebuttal was a legally enforceable right, the remaining question was what remedies, if any, beyond the inadequate statutory remedy of suing to correct the erroneous record existed.

The Court noted that the statute did not address termination or retaliation for the exercise by the employee of the right of rebuttal. It concluded that that the absence of any discussion or termination or the lack of any private enforcement mechanism indicated the Legislature had likely not considered the possibility of an employer simply terminating an employee for exercising the right of rebuttal.

To the Court, the statute not providing for an employee remedy in such cases would “empower any employer who so desired to essentially negate the important policy served by the right of rebuttal.” As a result, the court stated:

“[W]e hold that recognizing a common-law wrongful discharge action for the termination of an at-will employee for exercising the statutory right of rebuttal would complement the remedial scheme.”

The SJC’s limits for rebuttal-based wrongful discharge claims

The SJC did clarify the scope of the right to sue by stating that although an employee cannot be terminated simply for filing a rebuttal, the employer remains free to terminate the employment for any reason or no reason so long as the employer does not violate the statute.

As a general principle, the Court stated that an employee’s rebuttal only memorializes the employee’s position. It does not create any additional rights. Thus, if the employer makes a decision based upon non-statutory reasons to terminate an employee, the rebuttal is irrelevant.

As an example, the Court suggested that if “an employee had an attendance problem, was disciplined for it, and filed a rebuttal; the rebuttal would not in any way shield the employee from being disciplined or fired for lack of attendance. If the absenteeism continued, the employee could be terminated from employment, regardless of the rebuttal.” However, in a footnote, the Court further qualified this example by noting that if the termination for absenteeism followed the filing of a rebuttal without any further absenteeism, the termination would pose a question of whether the termination was retaliation for filing the rebuttal.

The court also noted in a footnote, however, that a “rebuttal may be expected to involve disputed, contentious subjects and vehement disagreement and that no matter how intemperate and contentious the expression in the rebuttal, the exercise and the expression of the right of rebuttal would not be grounds for termination when it is directed at explaining the employee’s position.”

Finally, the court advised that protection from termination would not in any way “extend to threats of personal violence, abuse, or similarly egregious responses” if they were included in a rebuttal.

The final ruling of the Supreme Judicial Court

The final decision and ruling of the Court were:

“[T]ermination of an at-will employee simply for filing a rebuttal expressly authorized by G.L. c.149, §52C constitutes a wrongful discharge in violation of public policy. We, therefore, reverse the superior court’s order allowing the defendant’s motion to dismiss, and the matter is remanded to the Superior Court for further proceedings consistent with this opinion.”

Owen Gallagher

Insurance Coverage Legal Expert/Co-Founder & Publisher of Agency Checklists

Over the course of my legal career, I have argued a number of cases in the Massachusetts Supreme Judicial Court as well as helped agents, insurance companies, and lawmakers alike with the complexities and idiosyncrasies of insurance law in the Commonwealth.

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