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Unemployment (or Prior Lawsuits) as a Protected Class? Not so Fast Says the 6th Circuit

While this case was decided under Michigan law, it has implications beyond that state. As the opinion points out, there exist no cases from any jurisdiction recognizing a failure to hire claim under state common law or public policy.

September 6, 2012

Last week, in Berrington v. Wal-Mart, the 6th Circuit considered the issue of whether a company could be liable for refusing to hire someone because he filed an unemployment claim. William Berrington claimed that a Kalamazoo, Michigan, Wal-Mart's refusal to rehire him after he filed a unemployment claim related to a prior termination wrongfully violated the state's public policy. The 6th Circuit disagreed. It ignored (more or less) the issue of the public policy at issue, and instead focused on the nature of the employment decision at-issue — a refusal to hire.

Berrington's appeal presents us with the question of whether Michigan law recognizes a public policy cause of action for an employer's wrongful refusal to rehire because an individual claimed unemployment benefits…. The common denominator in all the recognized public policy exceptions to at-will employment is the existence of an employment relationship. An employee's right to be hired or rehired by an employer, on the other hand, has never been recognized as actionable, under common law on public policy grounds…. In fact, neither party has been able to provide a single decision from any jurisdiction enforcing a retaliatory failure to rehire claim in state common law or public policy, absent some other statutory basis.

While this case was decided under Michigan law, it has implications beyond that state. As the opinion points out, there exist no cases from any jurisdiction (Ohio included) recognizing a failure to hire claim under state common law or public policy.

While you might not be presented with the issue of refusing to rehire an ex-employee who filed an unemployment claim, you may have other reasons not to hire someone. For example, you might decide that a potential employee is tainted because he or she filed a lawsuit against a previous employer. If the lawsuit raised issues protected by the employment discrimination statutes, for example, those same statutes' anti-retaliation provisions likely protect the employee from failure to hire on that basis. What if, however, the prior lawsuit involved something other than protected activity in its own right (e.g., a common law tort such as invasion of privacy, defamation, or intentional infliction of emotional distress)? If a prospective employer locates the old lawsuit on the Internet and refuses to hire someone it perceives as a potential problem down the road, Berrington suggests that the employer might be off the hook for any potential liability stemming from the refusal to hire. If state common law does not recognize a failure to hire claim, as Berrington suggests, then lawsuits against prior employers should be acceptable fodder for hiring decisions (the civil rights statutes notwithstanding).

Written by Jon Hyman, a partner in the Labor & Employment group of Kohrman Jackson & Krantz. For more information, contact Jon at (216) 736-7226 or jth@kjk.com.