Adler v. American Standard Corp

In Adler v. American Standard Corp., 830 F.2d 1303, 1303 (1987), the Fourth Circuit applied Maryland law and held that, "an employment termination motivated by a desire to conceal wrongdoing by preventing its disclosure to higher corporate officers does not violate Maryland's public policy." Id. at 1304. The appellee, Gerald F. Alder, alleged that he was wrongfully terminated by the appellant, American Standard, Inc. ("ASI"), because he intended to tell higher officers of the corporation that an alleged illegal "kickback" scheme existed. Id. at 1304-05. Following the Court of Appeals decision, Alder filed an amended complaint asserting that he was terminated because he intended to report wrongful acts of his supervisors to higher authority. Id. at 1306. Alder maintained that his discharge was because his supervisors were aware of the alleged illegal activities and therefore, wanted to keep them concealed. Id. The Fourth Circuit acknowledged that the Court of Appeals of Maryland recognizes an exception to the doctrine of employment at-will, which "permits a claim for abusive discharge when the employee is terminated for reasons which contravene a clear expression of Maryland's public policy." Id. at 1304. However, the court stated that this exception was not a broad one and that courts should exercise care in creating new public policy. Id. at 1306. It then cited the Court of Appeals decision, which stated: We have always been aware, however, that recognition of an otherwise undeclared public policy as a basis for a judicial decision involves the application of a very nebulous concept to the facts of a given case, and that declaration of public policy is normally the function of the legislative branch. Adler v. Am. Standard Corp., 830 F.2d 1303, 1306 (4th Cir. 1987) (quoting Adler v. Am. Standard Corp., 291 Md. 31, 45, 432 A.2d 464 (1981). Thereafter, the Fourth Circuit concluded: Limitation of the claim for abusive discharge to situations involving the actual refusal to engage in illegal activity, or the intention to fulfill a statutorily prescribed duty, ties abusive discharge claims down to a manageable and clear standard. This analysis is consonant with the stated intention of the Maryland Court of Appeals in Adler to preserve the rights of the employer to terminate employees at will, subject only to the limited exceptions created by statute and to the relatively limited instances where a clear mandate of public policy has been violated. . . . In the absence of a clear declaration by a legislature or the Maryland Court of Appeals that an action for abusive discharge should be extended to situations where the discharged employee claims to have had the knowledge and the intent to report wrongdoing to a higher corporate official, this court should not create such a ruling. We find that the district court erred in determining that the plaintiff had properly stated and proved a cause of action for abusive discharge under Maryland law. Id. at 1307.