Appeals Court Permits Public Employers To Terminate At-Will Public Employees For Exercising Right To Health Insurance; Decision Reinforces Benefits Of Union Membership
In Parker v. Town of North Brookfield, No. 06-P-167 (February 15, 2007), the Massachusetts Court of Appeals upheld a public employer’s termination of an at-will employee who exercised her statutory right to health care benefits. The town terminated the employee purely so it could avoid cost of meeting its health insurance obligations. By allowing public employers to terminate employees who demand health insurance, the Court reinforced incentives and benefits of unions, whose members generally receive health insurance and protections against retaliatory treatment.
The case involved an animal control officer who was subject to annual appointment. For many years, the employee was not enrolled in the town’s insurance program, as she received benefits from her other (public) employer. Following the transfer, she requested enrollment in the town’s insurance plan, to which she was entitled under Massachusetts General Law, Chapter 32B. The town responded to the employee’s request for basic health care benefits by terminating her, eliminating her position, and transferring her animal control responsibilities to the police department. The town reassigned the animal control duties to other members of the police department. There was no dispute that the town acted “purely on the basis of avoiding the cost of providing her with insurance.”
In one of the decision’s few victories for employees, the Appeals Court first held that an aggrieved public employee could sue a municipality in court for its violation of state health care laws, even though the statute does not specifically provide a mechanism for such lawsuits. Nevertheless, the court still upheld the town’s actions.
The Appeals Court acknowledged that the town’s actions would violate the federal ERISA law, 29 USC §§ 1001 et seq., if the law applied (ERISA generally does not apply to public employers). The court then declined to adopt the federal rule into chapter 32B, even though the employer’s actions arguably violate the spirit and purpose of chapter 32B. In other words, the court held that employees may sue to enforce the terms of state health care laws, except when they are fired for seeking to enforce the terms of health care laws.
The court later held that the town’s actions did not violate public policy, because, it reasoned, the town’s effort to control its budget was consistent with decision making of a private sector employer. It wrote, “[W]e note that in the context of the private sector, financial considerations can provide good cause to terminate an at-will employee.” The court arrived at this conclusion despite its previous acknowledgment that a private sector employer could not have acted in a manner that the town did here. The court further held that it did not matter if the town acted in bad faith.
The court’s decision may only compound the health care crisis by intimidating uninsured employees from asserting their rights and by rewarding employers who seek to avoid their obligations. By taking such an unsympathetic view of uninsured public employees, the court reinforced the benefits of union membership. Employees who are represented by a union generally are not “at-will.” They only cannot be fired if the employer has “just cause.” An employer does not have “just cause” if it fires an employee in retaliation for asserting statutory rights, and where the employer merely transfers the job responsibilities to other employees in the town. Further, a union could sue the town in an instance as here for unlawful retaliation and for unilaterally transferring or subcontracting the union work.