Bar News - April 20, 2016
Labor & Employment Law: Determining the Accrual Date of a Wrongful Discharge Action
By: Peter G. Callaghan and Gregory L. Silverman
An employee has three years to bring a common law wrongful discharge claim in New Hampshire. Determining the exact date a wrongful discharge claim accrues remains an area of uncertainty under New Hampshire law.
Resolving the date after which a wrongful discharge claim is time-barred depends on the nature of the claim and whether the employee is alleging wrongful termination, a constructive discharge, or that the employer wrongfully failed to renew or offer a new contract.
Discharge by the Employer. If the employee is given notice of his or her termination on the same day as the employment is terminated, the statute of limitations immediately begins to run on that date.
A common circumstance, however, occurs when the employee receives the notice of termination before the last day of work. Does the statute of limitations begin to run on the date of notification, or the employee’s last day of work? The U.S. Supreme Court has held that in discrimination cases based on an employer’s discriminatory decision, which ultimately leads to the employee’s discharge, the employee’s claim accrues when he or she receives notice of the discriminatory decision, not employee’s last day of work. See Del. State Coll. v. Ricks (1980) (otherwise known as the “Ricks” rule). Out-of-state courts have also applied this rule in common law wrongful discharge cases to hold that the statute of limitations begins to accrue on the date the employee receives notice of termination.
Neither the New Hampshire Supreme Court nor the US District Court has directly addressed the exact date an employee’s common law wrongful discharge claim begins to accrue, when the employee receives her notice of termination before her last day of work. The New Hampshire Supreme Court has addressed the Ricks rule only once. In Appeal of Pritchard (1993), a state employee appealed her layoff by alleging it was in retaliation for her actions after receiving a letter concerning her job performance. There, the court interpreted the time limit imposed by RSA 21–I:58, I, which stated that an employee may appeal an application of the personnel rules to the personnel appeals board “within 15 calendar days of the action giving rise to the appeal.”
The court’s sole task was to identify the “action” (as defined under the statute) that commenced the appeal period. The plaintiff contended that the period began on the date of her layoff; the state argued it began when she received notice of the layoff. The court held that the appeal period began on the date of the employee’s layoff.
In support, the court reasoned that the administrative rules made a distinction between “layoff” and “notice of layoff.” The state employee was not challenging the notice procedure of her layoff under RSA 21-I:58, I, but rather the layoff itself. The court distinguished the Ricks rule because the plaintiff in Ricks challenged his denial of tenure, not appeal procedures governed by state statute.
Constructive Discharge. In Jeffery v. City of Nashua (2012), the Court held that when an employee claims he or she was constructively discharged, the claim begins to accrue on the date the employee tenders his or her resignation, not the last date the employee worked. The Jeffery Court distinguished the constructive discharge claim from an action for wrongful discharge, where the action triggering the limitations period is the separation from work.
Notice of Contract Nonrenewal. Other jurisdictions have analyzed the date a wrongful discharge claim is time-barred as when the employer decides not to renew the employee’s contract or offer a new contract after one expires. Assuming a plaintiff may bring a wrongful discharge claim as a contract employee, the majority of courts have concluded that the wrongful discharge claim begins to accrue on the date the employer notifies the employee of its decision not to renew or offer the employee a new contract.
These courts have reasoned that a claim based on a single tort ordinarily accrues when the tort is completed – or the date all elements of the claim are present – and the continuing accrual of injury or damages does not extend the accrual date. Accordingly, if notice of nonrenewal is given while the employee is still working under the existing contract, the cause of action will accrue at the time of the notice, not on the employee’s last day of work.
Conclusion. When an employee’s last day of work is the same day as the notice of termination, the date a wrongful discharge claim accrues is evident. Employers who notify an employee of the termination before the employee’s last day of work would be well advised to clearly state that the discharge decision is final and will not be revisited.
In most instances, employers who decide not to renew or offer an employee a new contract should unmistakably inform the employee that their conclusion is definitive. When the employee receives a notice of termination or nonrenewal before his or her last day of work, plaintiff’s counsel should not assume the deadline to file a wrongful discharge claim is the three-year anniversary of the last day of work, as the limitations period could have already run.
Peter Callaghan is a member of the firm’s Employment Law Practice Group and represents employers in administrative hearings and in court proceedings. Greg Silverman, a member of the firm’s Litigation Practice Group, focuses his practice on employment, professional liability and commercial matters.