New Jersey Law Journal   October 23, 2006

THE E-PINK SLIP - EMPLOYERS WHO FIRE VIA E-MAIL RISK UNIQUE EXPOSURE

By Jonathan Bick  -- Bick is of counsel to WolfBlock Brach Eichler of Roseland and is an adjunct professor of Internet law at Pace Law School and Rutgers Law School. He is also the author of 101 Things You Need To Know About Internet Law [Random House 2000].

Traditionally, job termination notices took the form of a pink slip employees found in their mailbox or paycheck. Recently, Radio Shack used e-mails to give more than 400 employees notice of their involuntary separation from the firm. The novel use of Internet communication for the purpose of giving employment termination notice has been called outrageous, and if so, it may give rise to legal difficulties for an employer. Such difficulties may be mitigated through the use of prior and subsequent communications between the employer and the employee.

Proper termination is necessary to avoid multimillion dollar verdicts against employers. As communication technology has advanced, so have the methods of giving termination notices to employees. In addition to face-to-face verbal communication of termination, employers currently use phone, phone mail messages, traditional mail and, most recently, e-mail.

Once the decision to terminate an employee has been made, a written notice of that decision should be delivered to the employee. That notice should state the reasons for the discharge, in order to minimize post discharge disputes and assist the employer in the event of litigation. A proper discharge communication is also a good method of informing the employee of his rights, such as for continuing health care as required by the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Tort actions exist which allow at-will employees to recover for inappropriate discharge. Abusive discharge and intentional infliction of emotional distress are two tort actions that may be applicable to an inappropriate use of e-mail as a communication notice for the purpose of informing employee of their dismissal. The type of conduct necessary to support a claim of abusive discharge will not inevitably sustain a claim for intentional infliction of emotional distress.

Abusive discharge is, by and large, based upon behavior where the employer is motivated by a specific intent to cause harm to the employee or where a clear mandate of public policy is violated by the discharge. To prevail, a plaintiff-employee must connect the use of the e-mail termination with contravention of public policy, such as a breach of fair dealing. This threshold is difficult to cross; consequently, a claim of abusive discharge, when solely related to an electronic discharge notice, is unlikely to prevail.

More likely, a court will allow at-will employees to sue their employers for intentional infliction of emotional distress on the grounds than the use of an e-mail to communicate the termination is both shocking and outrageous conduct. In such an instance, a plaintiff-employee may recover for emotional distress caused intentionally by the defendant-employer.

The elements of a cause of action for the intentional infliction of emotional distress are: an extreme and outrageous act by the defendant; an intent by the defendant to cause severe emotional distress; severe emotional distress in the plaintiff; and a causal relationship between the plaintiff's emotional distress and the defendant's conduct.

To prevail, the plaintiff-employee must show that the use of e-mail to give notice of job termination was outrageous and beyond all reasonable bounds of community decorum. Each case must be determined with respect to its specific facts; however, some courts have extended the theory to cover reckless conduct. See Bodewig v. K-Mart, Inc., 635 P.2d 657 (1981), where the employer's conduct was reckless and beyond that which the community finds acceptable.

To establish the tort of intentional infliction of emotional distress, there must be more than bad faith. Although the tort of intentional infliction of emotional distress is a well-established theory of recovery and is not unique to the employment setting, courts are indisposed to sustain such a claim unless the conduct is despicable. For example, the court in Terry v. Pioneer Press, Inc., 947 P.2d 273 (1997), stated that if an employee's mental distress is caused solely by his discharge, and if the discharge was permitted in his contract, then the employer has a complete defense, even if the employer is aware that the discharge will cause emotional distress.

To prevail in an intentional infliction of emotional distress action, a plaintiff-employee must show than the use of an e-mail termination notice was more than merely humiliating (see Am. Road Serv. Co. v. Inmon, 394 So. 2d 361 (1980) or malicious (see Rawson v. Sears, Roebuck & Co ., 530 F. Supp. 776, (1982)). Rather, to prevail, a plaintiff-employee must show the use of an e-mail termination notice was outrageous.

To mitigate the potential for an intentional infliction of emotional distress claim, an employer contemplating the use of electronic termination notices can prepare the employees and offer services to mitigate the impact of the use of such electronic notices. For example, Radio Shack officials had told employees in a series of meetings that layoff notices would be delivered electronically. Radio Shack informed their employees of its intended use of e-mail to give notice of job terminations, as well as offering follow-up meetings for its laid-off employees. The firm announced that electronic notification was quicker and allowed more privacy than breaking the news in person.

The use of e-mail termination notices may also give rise to other legal difficulties. In particular, an e-mail termination notification process may result in additional post-termination liability for the employer, as compared to traditional on site notification processes. On-site termination notices allow employers an opportunity to immediately exchange severance checks for litigation releases and to immediately secure company assets, such as company-issued hand-held Internet devices, laptops and cell phones.

Additionally, the Internet in general and e-mail communications in particular are rarely deemed to be either private or secure. Normally, Internet messages are sent through a vast system of routers and servers. Some Internet communications travel across the country, even when the e-mail sender and recipient are in the same building. At various points along this path, e-mail messages are stored, and the contents of private conversations and business transactions can be retrieved, read and abused. In addition, e-mail messages are habitually stored by third parties on backup tapes that are kept for years. Consequently, the use of an e-mail to communicate particularly damaging information related to a job termination notice may give rise to a defamation claim under certain circumstances, in light of the fact that Internet use has been equated to publishing.

Employers who use e-mail termination notices may reduce liability associated with e-mail distribution, including negligence and privacy protection failure, by encasing private information in attachments to e-mails rather than putting such information in the body of the e-mail. When attachments are used to provide Internet security, the text of the e-mail (to which the attachment is appended) characteristically contains a privacy notice similar to a fax cover sheet.

A typical notice might state:

The attachment associated with this e-mail is intended for the party to whom this e-mail is addressed. It contains confidential information. If you have received this e-mail, please delete the e-mail and the associated attachment immediately.

For additional protection, employers who use e-mail termination notices should consider using password-protect attachments. The notice might state that the employee should use his or her employee number or Social Security number as the password.