Under the Tennessee Public Protection Act (TPPA), “[n]o employee shall be discharged or terminated solely for refusing to participate in, or for refusing to remain silent about, illegal activities.” Tenn. Code Ann. § 50-1-304(b).

“Illegal activities” mean activities that are in violation of the criminal or civil code of this state or the United States or any regulation intended to protect the public health, safety or welfare. Tenn. Code Ann. § 50-1-304(a)(3)(emphasis added).

In a recent case from the Western District of Tennessee, a plaintiff expressed concern to his supervisor that his reduced bonus was a result of his taking FMLA leave; therefore, his rights under the FMLA had been violated. Caldwell v. Building Plastics, Inc., 2009 WL 2749964 (W.D.Tenn. Aug. 26, 2009). The plaintiff was subsequently fired and claimed that his termination was due to his complaint. Applying the plain language of the statute, the court held that violations of the FMLA qualify as an “illegal activity” under the TPPA. Id. at *9.

This case illustrates some really clever lawyering. Although the FMLA contains an anti-retaliation provision, damages are limited to economic losses only under the FMLA. Conversely, non-economic compensatory damages and punitive damages can be recovered under the TPPA. Thus, by bringing a TPPA claim under these facts, the plaintiff greatly increased the defendant’s exposure at trial.

A recent case decided by the Western Section of the Tennessee Court of Appeals illustrates the difficulty in enforcing non-compete agreements even where an employer is found to have a properly supported protectable business interest in procuring the non-compete agreements. See Columbus Medical Services, LLC v. Thomas, 2009 WL 2462428 (Tenn. Ct. App. August 13, 2009). opinion.pdf

The case involved a staffing company (Columbus) whose employees (speech and occupational therapists) were assigned to work at a Tennessee state residential care facility (Arlington) for severely disabled adults under a contract with the state of Tennessee. After Columbus lost its contract with the State to a competing company (Liberty), Columbus’s former employees, i.e. the therapists, were hired by Liberty to continue working at Arlington.

Although the court of appeals held that Columbus established that it had a legitimate business interest in protecting itself from “opportunistic disintermediation” by its customer or by a competing employment agency such as Liberty, the court of appeals refused to enforce the non-compete agreements against the therapists.

(As an aside, the court explained that the concept of “opportunistic disintermediation” is the improper elimination of the staffing agency as the “middle man” or the appropriation of the staffing agency’s services without proper compensation.)

The court of appeals first refused to enforce the non-compete agreements on the basis that the hardship to the therapists weighed heavily against enforcement of the non-compete agreements. Notably, Columbus did not offer the therapists the opportunity to work at another facilty after it lost its contract with the State. Also, any employment opportunities that did exist paid substantially less money.

Additionally, the court of appeals found that enforcement of the non-compete agreements would result in loss of continuity of care to the “fragile” and “vulnerable” residents of the Arlington facility, as well as a loss to the State of the value of highly specialized training that it paid for on behalf of the therapists.

Thus, based on the hardship to the therapists and the harm to the public and the State, the court of appeals concluded that the non-compete agreements were not enforceable under Tennessee law.

Not much is more humiliating that being escorted out of the workplace after being terminated. The experience often pushes the terminated employee to seek legal advice regarding their termination, which may result in litigation that would not have occurred otherwise. But I understand that employers do not want terminated employees to react violently or to injure/destroy company property. Thus, I would imagine that many employers choose to err on the safe side so to speak. Still, is it really necessary to have security watch you gather your personal items and walk you to the door? I guess it depends on the circumstance.

Interestingly, there is a Tennessee statute that requires a terminated employee to leave the workplace premise within a reasonable time. And it even covers employees who terminate their employment voluntarily. The statute, T.C.A. 50-1-303, provides as follows:

In all cases where an employee or employees ceases work for any employer, whether the severance is voluntary on the part of the employee or whether the employee is lawfully discharged, the employee or employees shall within a reasonable time thereafter withdraw from the premises of the employer in which they were employed. In the absence of other circumstances, twelve (12) hours from the date of the cessation of employment shall be a reasonable time. Any employee or employees failing and refusing to withdraw from the premises of the employer after the termination of employment commits a Class C misdemeanor.

Therefore, under Tennessee law it is a criminal act to fail to leave the employer’s workplace within a reasonable time after being terminated.