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Complaints over Violation of Internal Policies Not Grounds for Wrongful Discharge in North Carolina

    Client Alerts
  • April 17, 2009

North Carolina courts recognize a limited exception to the employment at-will doctrine for wrongful discharge that involves a violation of state public policy.  Last week, the North Carolina Court of Appeals repeated how limited this exception has become.

In Kranz v. Hendrick Automotive Group, Inc., a former vice president of information technology alleged that his termination for poor performance was actually wrongful discharge in retaliation for his bringing certain irregularities to his superiors’ attention.  Kranz alleged that Hendrick’s customer databases did not adequately maintain the security of customer information.  He also claimed that the company was not properly classifying and depreciating fixed assets for tax and banking purposes.

The Court of Appeals affirmed dismissal of the suit, concluding that the allegations did not state a claim for wrongful discharge under North Carolina law.  At no time did Kranz claim that the alleged security and accounting procedures violated any state or federal law or accounting principles.  Instead, his claims were based upon his conclusion that the company was not following best practices, and was in violation of its own polices and procedures.

The claims, even if accurate, do not constitute wrongful discharge in North Carolina.  In order to avoid application of the employment at-will doctrine, the plaintiff must demonstrate that clear state public policy issues are present.  Non-compliance with internal company procedures in the absence of a legal violation does not meet this test.