No wrongful discharge claim based on exercise of rights under state Constitution, Tennessee high court says | Constangy, Brooks, Smith & Prophete, LLP

The Tennessee Supreme Court has recently held that there is no legal claim for wrongful discharge where an employer terminates an employee because the employee exercised a right set forth in the state Constitution.

The decision is important in its own right, and also because it may – or may not – signal a fundamental change in the Supreme Court’s view of its role in the development of the law. Here’s a very concise and oversimplified explanation.

A short history of employment at will

We start at the beginning. All employment is contractual in nature. And under the ancient principles of “freedom of contract,” the parties are free to negotiate whatever terms they choose.

Consistent with this fundamental construct, in 1884 the Tennessee Supreme Court announced what has become known as the employment-at-will doctrine:

“All may dismiss their employees at will, be they many or few, for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong.”

That became the default rule governing employment relationships for decades in America. Note, that is a judicially created rule of law.

Over the decades, starting with the National Labor Relations Act of 1935 and the Fair Labor Standards Act of 1938, the federal and state governments began and continued to insert what amount to legally mandatory terms into employment contracts. So, by 2025, employers must pay minimum wages and overtime; must grant leave for certain purposes such as jury duty, family and personal medical conditions; must not discriminate based on race, sex, age, disability and other characteristics; and must abide by a host of federal and state laws regulating the employment relationship. Over the decades, governments have enacted social policies through regulation of the workplace, often enforcing the laws by enabling and encouraging private litigation. All the while, state courts in many states have insisted that the “employment at will” doctrine is alive and well. It is not.

A turning point came in the 1980s. State courts began creating civil claims for damages for “wrongful discharge in violation of public policy.” The key change was the adoption of the flexible and sometimes unpredictable concept of “public policy.” In Tennessee the Supreme Court gradually developed a rule of law saying, “An at-will employee generally may not be discharged for attempting to exercise a statutory or constitutional right, or for any other reason which violates a clear public policy which is evidenced by an unambiguous constitutional, statutory or regulatory provision.” Again, the Court developed this rule of law. Although the legislature chimed in with statutory provisions from time to time, and supplanted some of the judicially created legal claims with statutes, the Court continued to “develop” the judicially created rules of “the common law.”

Let us pause for a moment to examine this. For centuries in Anglo-American jurisprudence the courts have stated, applied, and developed “the common law.” The “common law” as understood within this framework simply refers to judicially created rules of law. The public policy “exception” to employment at will is an example. A more glaring example came in 1992, when the Tennessee Supreme Court, expressly noting that the legislature could have addressed the issue and did not, overturned decades of precedent and rejected the “contributory negligence” rule in personal injury cases and adopted the “comparative negligence” rule. This fundamentally changed the law governing legal actions seeking recovery for personal injuries. There are numerous other examples.

Smith v. Blue Cross Blue Shield of Tennessee

Now to our recent case. The controlling rules required that the Court accept everything the plaintiff alleged in her lawsuit as true. The lawsuit alleged, simply put, that BCBS fired Ms. Smith because she sent emails to various members of the state General Assembly asking the General Assembly to do something about the company’s COVID-19 vaccine mandate. We don’t know exactly what the emails said, on the record before the court, and it doesn’t matter for present purposes.

Ms. Smith’s lawyers, not unreasonably, thought Ms. Smith had a good legal claim based on the way the Court had articulated the rule of law in prior cases. They asserted that Ms. Smith was fired for exercising her fundamental constitutional right to petition the government for the redress of grievances. There was no dispute, and it is hard to see how there could be, that the right to petition government is grounded in clear and unmistakable public policy.

The case made its way to the state Supreme Court. BCBS argued there was no exception to the employment-at-will doctrine establishing a legal claim for wrongful discharge based on the employee’s exercise of a constitutional right. In effect, BCBS argued that the constitutional provision restricted governmental action harming a citizen because the citizen exercised the right, and didn’t restrict a private actor in that way.

Ms. Smith countered that, although the United States Constitution clearly applies only to governmental action, the state constitution has no such limit. And that is true. Many observers, including me, thought Ms. Smith had the better of the argument. I was wrong.

The Supreme Court spent pages talking about the fundamental importance of the right to petition the government, tracing the right back to the Magna Carta in 1215 A.D.

Then the Court pivoted. The Court noted the difference between the federal and state constitutional provisions. And said, in effect, that it didn’t matter. The constitutional right to petition, said the Court, restricts governmental action only—so no claim for wrongful discharge could be based on an employer’s decision to fire an employee because the employee exercised a right protected by the state constitution. The Court said there is no exception to the employment-at-will doctrine providing for such a legal action.

The Court’s conclusion is inconsistent with decades of judicial decisions expanding the claim of wrongful discharge in violation of public policy. It is also inconsistent with the Court’s description of the right to petition as fundamental to civil society in America. But it is perfectly consistent with Justice Sarah Campbell’s concurring opinion. Justice Campbell’s opinion expresses reservations about the Court’s decision in 1984 to create the claim of wrongful discharge in violation of public policy. She, in effect, says creating new causes of action is a job for the legislature under principles of separation of powers, not a job for the judiciary.

Only time and more judicial decisions will tell us whether this opinion signals a true change of direction in the Court’s view of its role in developing and changing the law.

A word of caution for employers: Employment at will is a baseline rule, not the end-all rule.

Some observers have concluded that the Smith decision means employers can fire employees who speak out publicly criticizing their employer. That is simply not true across the board. Many federal and state laws create legal claims that employees can assert if they are fired for criticizing their employer. These include the National Labor Relations Act’s protections for protected concerted activity, a broad and ill-defined concept. They also include many laws prohibiting retaliation for asserting rights under various civil rights laws or leave laws. Not to mention certain laws regulating publicly traded companies’ obligations with respect to whistleblowers.

Although “employment at will” remains a baseline legal doctrine in employment law, it has been eroded by decades of legislative and judicial actions. For any employment termination, pause and ask yourself this:

Am I prepared to say I looked into this carefully, I thought about it, I conferred with knowledgeable people, and I am doing the right thing?

If you can say these things, you probably are making a sound decision.