PHILLIPS v. BUTTERBALL FARMS COMPANY, INC (AFTER SECOND REMAND)
Case Details
- Citation
- 448 Mich. 239
- Judge(s)
- Cavanagh, Boyle, and Mallett, JJ., concurred with Levin, J.; Brickley, C.J., concurred with Riley, J.; Weaver, J., took no part in the decision of this case.
- Procedural Posture — the stage the case had reached
- appeal
- State
- Michigan
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
Michigan Supreme Court reversed the lower courts' damages limitations and held that an at-will employee discharged in retaliation for filing a worker's compensation claim may recover full compensatory damages including lost wages, back pay, front pay, and mental/emotional distress damages, not merely nominal damages.
Excerpt
PHILLIPS v BUTTERBALL FARMS COMPANY, INC (AFTER SECOND REMAND) Docket No. 97976. Argued November 2, 1994 (Calendar No. 14). Decided March 21, 1995. Teresa Phillips brought an action in the Kent Circuit Court against Butterball Farms Company, Inc., claiming that she was discharged in retaliation for exercising rights under the worker’s compensation act by requesting that medical bills for injuries suffered on the job be paid. The court, Robert A. Benson, J., granted summary disposition for the defendant, ruling that punitive damages or damages for mental or emotional distress could not be recovered. The Court of Appeals, Maher, P.J., and Sullivan and Reilly, JJ., affirmed in an unpublished opinion per curiam (Docket No. 118024). The Supreme Court vacated and remanded the case for reconsideration. 439 Mich 895 (1991). On remand, the Court of Appeals, Sullivan, P.J., and Reilly and Jansen, JJ., affirmed in an unpublished opinion per curiam, finding that the cause of action sounded in contract (Docket No. 147501). The Supreme Court again vacated and remanded the case for reconsideration in light of Dunbar v Dep’t of Mental Health, 197 Mich App 1 (1992). 442 Mich 911 (1993). On second remand, the Court of Appeals, McDonald, P.J., and Reilly and Jansen, JJ., reversed, holding that the cause of action sounded in tort, permitting damages for mental or emotional distress, but that because the plaintiff was an employee at will, only limited or nominal damages could be recovered (Docket No. 165049). The plaintiff appeals. In an opinion by Justice Levin, joined by Justices Cavanagh, Boyle, and Mallett, the Supreme Court held: Although Phillips was an employee at will, recovery is not limited to nominal damages. If she can establish that she was discharged for exercising rights under the worker’s compensation act, she may recover compensation for lost wages, back and front pay, and mental or emotional distress damages. References Am Jur 2d, Wrongful Discharge §§ 25, 26. Recovery for discharge from employment in retaliation for filing workers’ compensation claim. 32 ALR4th 1221. 1. A cause of action seeking damages from an employer for retaliatory discharge for filing a worker’s compensation claim is independent of the contract, and sounds in tort, not contract. While the contractual relationship is "at will,” it is not the source of an employee’s right to protection. The right stems not from an implied promise by the employer, but from the worker’s compensation statute. 2. Because this action sounds in tort, the available damages are not limited by contract principles. Thus, the plaintiff is not required to plead a separate claim for intentional infliction of emotional distress to recover damages, nor must she meet the burdens requisite to establishing that cause of action. She stated a separate and independent basis for recovery of mental and emotional distress damages. She may recover lost wages because she had a reasonable expectation that she would not be terminated for filing a worker’s compensation claim, despite the nature of the employment relationship. Because the right to recovery under the public policy exceptions to the employment at will doctrine arises independently of the employment contract, she should be compensated for lost wages. Nominal damages would not compensate her for the loss of employment, nor would they provide sufficient deterrence to employers who would violate the statute. Reversed and remanded. Justice Riley, joined by Chief Justice Brickley, dissenting, stated that a common-law action claiming retaliation for asserting worker’s compensation rights sounds in contract, and damages are limited to traditional contract remedies. Appropriate remedies would include reinstatement and back pay from the date of the discharge to the date of judgment, not mental distress or exemplary damages. This type of wrongful discharge gives rise to a judicially created cause of action that attempts to protect an expressed state policy that is implied in every contract of employment, i.e., the right to assert worker’s compensation rights without being discharged or discriminated against. The liability associated with worker’s compensation does not derive from the fault or negligence of the employer, but from injury arising out of and in the course of employment. Justice Weaver took no part in the decision of this case. 201 Mich App 663; 506 NW2d 606 (1993) reversed. Worker’s Compensation — Employment at Will — Retaliatory Discharge — Torts. A cause of action seeking damages from an employer for retaliatory discharge for filing a worker’s compensation claim is independent of the contract, and sounds in tort, not contract; while the contractual relationship is "at will,” it is not the source of an employee’s right to protection; the right stems not from an implied promise by the employer, but from the worker’s compensation statute (MCL 418.301[11]; MSA 17.237[301][11]). Drew, Cooper & Anding (by Stephen R. Drew and Amy L. Young) for the plaintiff. Miller, Johnson, Snell & Cummiskey, P.L.C. (by Craig H. Lubben), for the defendant. Amicus Curiae: Clark, Klein & Beaumont (by Dwight H. Vincent, J. Walker Henry, and Donica T. Thomas) for Michigan Manufacturers Association. AFTER SECOND REMAND Levin, J. Plaintiff Teresa Phillips, an employee at will, commenced this action against her former employer, defendant Butterball Farms Company, Inc., claiming that she was discharged for exercising rights under the worker’s compensation act. The circuit court entered orders limiting the damages recoverable, and trial has been deferred to provide Phillips with an opportunity to appeal those orders. The Court of Appeals held that because Phillips was an employee at will, damages for lost wages will be nominal and the measure of damages for mental or emotional distress will also be limited. We hold that, although Phillips was an employee at will, recovery is not limited to nominal damages, and, if she can establish that she was discharged for exercising rights under the worker’s compensation act, she may recover compensation for lost wages, back pay and front pay, and mental or emotional distress damages. The parties have not briefed or argued the issues that might arise respecting the length of front pay and mitigation of damages. We remand for trial. i Phillips was a probationary employee at Butterball. She injured her wrist on the job, and returned to work on August 19, 1986, five days after the injury. She alleges that she claimed benefits under the worker’s compensation act by requesting that her medical bills be paid by Butterball and was met with a hostile attitude, and, approximately two weeks later, before the end of the probationary period, her employment was terminated. Phillips commenced this action, and the circuit court entered the orders limiting damages. The Court of Appeals essentially affirmed the circuit court orders limiting damages. The Court of Appeals ruled that the instant case was factually similar to Dunbar v Dep’t of Mental Health, 197 Mich App 1; 495 NW2d 152 (1992), and that, under Administrative Order No. 1990-6, it was bound to follow Dunbar. The Court, however, criticized Dunbar. The Court said that, because it was bound to follow Dunbar, it was "compelled to conclude that plaintiff’s cause of action sounds in tort, and, therefore, plaintiff may claim all the damages allowed for that cause of action, including damages for mental or emotional distress.” The Court, however, limited the amount recoverable: [T]he measure of damages for her mental or emotional distress necessarily will be conñned to proof of distress arising solely from the retaliatory nature of the discharge, because an at will employee has no reasonable expectation of being continued in employment. Similarly, whether the action be in tort or contract, damages for lost wages will be nominal because an at-will employee cannot show a reasonable expectation of continued employment. [Emphasis added.]_ II Phillips was an employee at will. The general rule is that "in the absence of a contractual basis for holding otherwise, either party to an employment contract for an indefinite term may terminate it at any time for any, or no, reason.” Suchodolski v Michigan Consolidated Gas Co, 412 Mich 692, 694-695; 316 NW2d 710 (1982). This Court continued that nevertheless "some grounds for discharging an employee are so contrary to public policy as to be actionable.” In addition to statutory causes of action for violation of explicit prohibitions, causes of action have been implied where the employee was discharged for failure or refusal to violate a law in the course of employment. This Court continued in Suchodolski that "the courts have found implied a prohibition on retaliatory discharges when the reason for a discharge was the employee’s exercise of a right conferred by a well-established legislative enactment. See, e.g., Sventko v Kroger Co [69 Mich App 644; 245 NW2d 151 (1976)]; Hrab v Hayes-Albion Corp, 103 Mich App 90; 302 NW2d 606 (1981). Both cases involved allegations of discharges in retaliation for having filed worker’s compensation claims.” In Sventko, the Court of Appeals recognized a cause of action for discharge in retaliation for filing a worker’s compensation claim. The lead opinion said that "while it is generally true that either party may terminate an employment at will for any reason or for no reason, that rule is not absolute.” The opinion continued that "the better view is that an employer at will is not free to discharge an employee when the reason for the discharge is an intention on the part of the employer to contravene the public policy of this state.” The Court of Appeals thus found that, although there was no explicit statutory proscription, the public policy expressed in the worker’s compensation act precluded an employer from discharging an employee for filing a claim. hi The Court of Appeals initially determined that an action for retaliatory discharge sounded in tort. Subsequent panels concluded that the action sounded in contract. In Dun bar, the Court ruled that an action for wrongful discharge in retaliation for filing a worker’s compensation claim sounds in tort, not contract. The Court continued that the cause of action is now statutorily-based, and that, for breach of the statutory duty, the action sounds in tort not contract. Butterball argues, consistent with the Court of Appeals opinions concluding that the claim sounds in contract, that the contractual employment relationship is what gives rise to Phillips’ cause of action. Implied in every contract, Butterball contends, is a promise not to contravene public policy. Thus, the action for retaliatory discharge is in contract because the right not to be discharged arises out of a promise implied in the contract. This argument ignores that the source of this right against retaliatory discharge does not stem from any term agreed upon by the contracting parties, but from public policy now expressed in a statute. The duty not to retaliate against an employee for filing a worker’s compensation claim arises independently from the employment contract. In Lathrop v Entenmann’s, Inc, 770 P2d 1367, 1373 (Colo App, 1989), a Colorado appellate court said: "[t]he duty of the employer to refrain from retaliation in violation of a state’s public policy does not find its source in any private contract; it is a duty imposed by the state’s legislative body; and it is one that cannot be adjusted or modified lay the private actions of an employer and a collective bargaining agent.” Many states now recognize a cause of action for retaliatory discharge of an employee who has filed a worker’s compensation claim. The vast majority hold that such an action is grounded in tort on the basis of a public policy exception or express statutory proscription. The Nevada Supreme Court observed:_ We know of no more effective way to nullify the basic purposes of Nevada’s workmen’s compensation system than to force employees to choose between a continuation of employment or the submission of an industrial claim. In the absence of an injury resulting in permanent total disability, most employees would be constrained to forego their entitlement to industrial compensation in favor of the economics necessity of retaining their jobs.[] In holding that such a cause of action sounds in tort, not contract, the Kansas Court of Appeals observed that "the mere existence of a contractual relationship between the parties does not change the nature of [this] action.” In enacting § 301(11) of the Worker’s Disability Compensation Act, the Legislature codified Sventko. While the contractual relationship was "at will,” the contractual relationship is not the source of an employee’s right to protection against retaliatory discharge for filing a worker’s compensation claim. The right stems not from an implied promise by the employer, but from the statute. A cause of action seeking damages from an employer who violates the worker’s compensation act is independent of the contract, and sounds in tort, not contract. IV The Court of Appeals, in holding that because Phillips was an employee at will, she may recover only limited or nominal damages, in effect ruled that there is no meaningful remedy for retaliatory discharge for filing a worker’s compensation claim. Some employees are employed for fixed terms. Others are protected by individual or union contracts providing that the employee may only be discharged for just cause. And still others, perhaps the majority, are "at will.” A fixed-term or just-cause employee is protected by that term of the employment relationship. Unless employees at will are also protected from retaliatory discharge for filing a worker’s compensation claim, almost no employee is protected by the prohibition against discharge of an employee therefor. In Dunbar, supra, the Court of Appeals held that, because a claim for retaliatory discharge sounds in tort, the employee can claim damages for mental distress and loss of pay resulting from the improper discharge. Butterball contends that the Dunbar panel erred, and argues that decisions of this Court have limited the circumstances in which an employee can obtain mental distress damages when there has been no evidence of physical injury. Butterball cites this Court’s decisions in Valentine v General American Credit, Inc, 420 Mich 256; 362 NW2d 628 (1984), concerning mental distress damages for breach of an employment contract, and Roberts v Auto-Owners Ins Co, 422 Mich 594; 374 NW2d 905 (1985), concerning the tort of intentional infliction of emotional distress. In Kewin v Massachusetts Mutual Life Ins Co, 409 Mich 401, 419; 295 NW2d 50 (1980), this Court held that mental and emotional distress damages were not ordinarily available in an action for bad-faith breach of contract. The Court also declined to recognize a tort for bad-faith breach because it would "open the door to recovery for mental pain and suffering caused by breach of a commercial contract.” The Court said, however, that damages for mental and emotional distress may be awarded where there was allegation and proof of tortious conduct independent of the breach of contract. Valentine, an action for breach of contract for termination of employment without just cause, followed Kewin. Valentine did not address an action in tort that arose independently of the employment contract. Because this action sounds in tort, the available "damages are not limited by contract principles.” Other courts that recognize an action in tort for worker’s compensation retaliatory discharge have allowed recovery for mental and emotional distress, as well as lost wages. The Iowa Supreme Court said: While it is not a crime or an act requiring a malicious motive or outrageous conduct, wrongful discharge offends standards of fair conduct and normally will cause the employee damages in lost income. In addition to his monetary loss of wages, the employee may suffer mentally. . . . We know of no logical reason why a wrongfully discharged employee’s damages should be limited to out-of-pocket loss of income, when the employee also suffers causally connected emotional harm. Distressful emotions not involving bodily injury are compensable in actions for the infringement of some other interest. . . . We believe that fairness alone justifies the allowance of a full recovery in this type of tort. Butterball contends that allowing Phillips to recover emotional and mental distress damages would contravene Roberts, supra. There, this Court declined to recognize an action in tort for intentional infliction of emotional distress for breach of an insurance contract. Phillips was not required to plead a separate claim for intentional infliction of emotional distress to recover damages for mental and emotional distress, nor must she meet the burdens requisite to establishing that cause of action. In pleading a cause of action for worker’s compensation retaliatory discharge, Phillips stated a separate and independent basis for recovery of mental and emotional distress damages. The Court of Appeals stated that to permit Phillips to recover full compensatory damages would transform her "at will” employment contract into a "just cause” contract. Again, we disagree. The Court of Appeals in Sepanske said that "either party to an at will employment contract for an indefinite term may terminate it at any time and for any reason, unless the employer has violated a specific public policy in discharging the employee.” The Court found that an employee at will could only recover nominal damages for lost wages because "[t]here is no tangible basis upon which damages may be assessed where plaintiff’s expectation was for an at will position which could have been changed or from which he could have been terminated without consequence.” The claim in Sepanske, however, was premised on breach of contract, not a separate tort. We hold that Phillips may recover lost wages. Phillips had a reasonable expectation that she would not be terminated for filing a worker’s compensation claim, despite the at-will nature of the employment relationship. Recovery under the public policy exceptions to the employment at will doctrine arises independently of the employment contract. Phillips should be compensated for lost wages to give effect to the mandate now expressed in § 301(11). Nominal damages would not compensate Phillips for her loss of employment, nor would it provide sufficient deterrence to employers who would violate the statute. Reversed and remanded to the circuit court for trial. Cavanagh, Boyle, and Mallett, JJ., concurred with Levin, J. The circuit court granted summary disposition in favor of Butterball dismissing Phillips’ claims of handicap discrimination and breach of implied contract. The circuit court ruled that Phillips could not recover punitive damages or damages for mental or emotional distress. The Court of Appeals affirmed in an unpublished opinion per curiam, issued February 22, 1991 (Docket No. 118024). This Court vacated the judgment of the Court of Appeals and remanded for reconsideration. 439 Mich 895 (1991). On remand, in an unpublished opinion per curiam, issued May 14, 1992 (Docket No. 147501), the Court of Appeals found that Phillips’ cause of action was in contract. This Court again vacated and remanded, this time for reconsideration in light of Dunbar v Dep’t of Mental Health, 197 Mich App 1; 495 NW2d 152 (1992). 442 Mich 911 (1993). 201 Mich App 663; 506 NW2d 606 (1993). The Court said: Furthermore, the Dunbar majority has presented no rationale for distinguishing between retaliatory discharge for filing a workers’ compensation claim and other types of retaliatory discharge that are equally offensive to public policy. The mere fact that the Workers’ Disability Compensation Act has codified the public policy against retaliatory disch
Similar Rulings
PHILLIPS v BUTTERBALL FARMS COMPANY, INC (ON SECOND REMAND) Docket No. 165049. Submitted June 4, 1993, at Lansing. Decided October 4,1993, at 9:30 a.m. Leave to appeal sought. Teresa Phillips brought an action in the Kent Circuit Court against Butterball Farms Company, Inc., alleging that she had been discharged from her employment with the defendant in retaliation for exercising her rights under the Workers’ Disability Compensation Act. The plaintiff sought not only lost income but also damages for mental and emotional distress and anguish. The trial court, Robert A. Benson, J., dismissed the claim for damages for mental and emotional distress, finding that the plaintiff’s claim sounded in contract rather than tort, and dismissed a breach of contract claim, finding that the plaintiff was an at-will employee. Thereafter, the court, George S. Buth, J., approved a jury instruction proposed by the defendant that would have limited the plaintiff to nominal damages. The plaintiff appealed by leave granted. The Court of Appeals, Maher, P.J., and Sullivan and Reilly, JJ., affirmed, basing the determination in part on the plaintiffs failure to request a transcript of one of the hearings. Unpublished opinion per curiam, decided February 21, 1991 (Docket No. 118024). The Supreme Court, in lieu of granting leave to appeal, remanded for consideration on the merits. 439 Mich 895 (1991). On remand, the Court of Appeals, Sullivan, P.J., and Reilly and Jansen, JJ., again affirmed. Unpublished opinion per curiam, decided May 14, 1992 (Docket No. 147051). The Supreme Court, in lieu of granting leave to appeal, vacated the judgment of the Court of Appeals and remanded for reconsideration in light of Dunbar v Dep’t of Mental Health, 197 Mich App 1 (1992). 442 Mich 909 (1993). On second remand, the Court of Appeals held: 1. The Dunbar holding that an action brought under the retaliatory discharge provision of the Workers’ Disability Compensation Act sounds in tort rather than contract and that damages for mental distress and anguish may be awarded is binding precedent and must be followed. Accordingly, it was error for the trial court to limit the plaintiff’s damages to nominal damages for lost wages. References Am Jur 2d, Damages §§ 251-259; Master and Servant §§ 60-63; Wrongful Discharge §§ 25-29. Recovery for discharge from employment in retaliation for filing workers’ compensation claim. 32 ALR4th 1221. 2. Because the plaintiff was an at-will employee, damages for mental distress and anguish are limited to only those damages attributable to the distress resulting from the retaliatory nature of the discharge and not from the distress of her subsequent unemployment, because she could have had no reasonable expectation of continued employment. The fact that the result may be only nominal damages that might do little to deter retaliatory discharges is a problem that must be addressed by the Legislature. Reversed and remanded. 1. Master and Servant — Wrongful Discharge — Retaliatory Discharge — Damages — Mental Anguish. An action for wrongful discharge alleging retaliation for the filing of a claim for workers’ compensation benefits sounds in tort, not contract; damages for mental anguish may be awarded in such an action. 2. Master and Servant — At-Will Employment — Retaliatory Discharge — Damages — Mental Anguish. Intrinsic in the concept of an at-will employment contract is the mutual understanding between employer and employee that neither party to the agreement has an expectation of continued employment; consequently, damages for mental or emotional distress in an action alleging discharge in retaliation for the filing of a claim of workers’ compensation benefits are limited to those damages that arise solely from the retaliatory nature of the discharge. Williams, Klukowski, Drew & Fotieo (by Stephen R. Drew), for the plaintiff. Miller, Johnson, Snell & Cummiskey (by Craig H. Lubben and Nancy S. Rubino), for the defendant. ON SECOND REMAND Before: McDonald, P.J., and Reilly and Jansen, JJ. Reilly, J. This case has been remanded again, this time for reconsideration in light of Dunbar v Dep’t of Mental Health, 197 Mich App 1; 495 NW2d 152 (1992), a case decided after our last opinion was released. Our previous opinions in this matter have been vacated and, therefore, we are bound by Administrative Order No. 1990-6, as extended, to follow Dunbar. Accordingly, we reverse. i In our original opinion on remand, we considered whether the trial court properly dismissed plaintiffs claim for damages for mental anguish, anxiety, humiliation, and pain and suffering arising out of her alleged retaliatory discharge for exercising her rights under the workers’ compensation statute. Unpublished opinion per curiam of the Court of Appeals, decided May 14, 1992 (Docket No. 147501). We noted that a conflict among panels of this Court with regard to the recovery of exemplary damages in retaliatory discharge actions had been resolved in Mourad v Automobile Club Ins Ass’n, 186 Mich App 715, 728; 465 NW2d 395 (1991). In Mourad, this Court, following Watassek v Dep’t of Mental Health, 143 Mich App 556; 372 NW2d 617 (1985), and Lopus v L & L Shop-Rite, Inc, 171 Mich App 486; 430 NW2d 757 (1988), determined that an action for retaliatory discharge is an action asserting a specific type of wrongful discharge and is, therefore, a contract action. Accordingly, a plaintiff in a retaliatory discharge case is not entitled to recover exemplary damages. Mourad, supra at 728. In Dunbar, a panel of this Court held that an action for retaliatory discharge for filing a workers’ compensation claim sounds in tort, not in contract. The majority acknowledged that a retaliatory discharge is a type of wrongful discharge. Dunbar, supra, at 6. However, the majority distinguished Mourad (retaliatory demotion for failing to follow company’s unethical practice), Watassek (retaliatory discharge for interference with treatment of patients), and Lopus (retaliatory discharge in anticipation of plaintiffs filing a workers’ compensation claim) and held that the allegedly wrongful conduct was a breach of the statutory duty not to discharge an employee in retaliation for filing a workers’ compensation claim and, therefore, sounds in tort. Id. at 10; MCL 418.301(11); MSA 17.237(301)(11). This case is factually on point with Dunbar, because plaintiff in this case also alleges that she was discharged from her employment in retaliation for exercising her rights under the Workers’ Disability Compensation Act, in violation of § 301(11) of the statute. Therefore, we believe that we are bound to follow Dunbar. However, we do so reluctantly because we do not believe that the Dunbar majority sufficiently justified its departure from the rule of law stated in Mourad. The cause of action for retaliatory discharge in contravention of the public policy indicated in the Workers’ Disability Compensation Act was judicially established in Sventko v Kroger, 69 Mich App 644, 647; 245 NW2d 151 (1976), as an exception to the doctrine of at-will employment. However, Sventko failed to define the nature of the action, i.e., contract or tort, and failed to provide a remedy. Subsequently, in 1981, the Legislature codified that public policy and enacted a prohibition against the discharge of an employee for filing a claim for workers’ compensation benefits. 1981 PA 200, §301(11), MCL 418.301(11); MSA 17.237(301)(11). However, the legislation failed to codify the judicially created cause of action, define its nature, or provide any penalty or remedy for the violation of the public policy. Later decisions of this Court, which dealt with the nature of retaliatory discharge actions in other factual contexts, were in conflict concerning whether the cause of action was one sounding in tort or contract. We believe that conflict was appropriately resolved in Mourad. Nevertheless, the majority in Dunbar has concluded that the cause of action in that case sounded in tort because the employer allegedly violated a duty imposed by § 301(11) of the Workers’ Disability Compensation Act. However, we emphasize, as did the dissent in Dunbar, that § 301(11) does not create a cause of action or set forth a remedy. Compare the Civil Rights Act, MCL 37.2701; MSA 3.548(701) and MCL 37.2801; MSA 3.548(801) and the Handicappers’ Civil Rights Act, MCL 37.1602; MSA 3.550(602) and MCL 37.1606; MSA 3.550(606). Rather, the statute is merely a codification of the judicially recognized public policy against retaliatory discharge in the specific situation where an employee files a workers’ compensation claim. Dunbar, supra at 14-15, n 4; see also Suchodolski v Michigan Consolidated Gas Co, 412 Mich 692, 695; 316 NW2d 710 (1982); Sventko, supra. Furthermore, the Dunbar majority has presented no rationale for distinguishing between retaliatory discharge for filing a workers’ compensation claim and other types of retaliatory discharge that are equally offensive to public policy. The mere fact that the Workers’ Disability Compensation Act has codified the public policy against retaliatory discharge for filing a workers’ compensation claim is not a sufficient basis for ignoring the underlying basis for the cause of action, i.e., that some grounds for discharge are so contrary to public policy as to give rise to an action for wrongful discharge, even though the employer-employee relationship is "at will.” Sventko, supra. The action is based on the breach of an implied provision that the employer will not discharge an employee for a reason that is contrary to public policy. See Brockmeyer v Dunn & Bradstreet, 131 Wis 2d 561; 335 NW2d 834 (1983); Sterling Drugs, Inc v Oxford, 294 Ark 239; 743 SW2d 380 (1988). The cause of action for wrongful discharge exists even where there is no explicit legislative statement prohibiting such a discharge. See Mourad, supra, Suchodolski, supra, and Sventko, supra. See also Trombetta v Detroit, T & I R Co, 81 Mich App 489, 496; 265 NW2d 385 (1978) (employee discharged for refusing to violate a law). The majority in Dunbar acknowledged that a retaliatory discharge is a type of wrongful discharge, but did not explain how the explicit statutory codification of a public policy against retaliatory discharge in workers’ compensation cases transforms such activity into a tort action while other types of retaliatory discharge apparently give rise to contract actions. We recognize that the majority’s conclusion in Dunbar that a claim of discharge in retaliation for filing a workers’ compensation claim sounds in tort is consistent with recent rulings of several other state courts. 32 ALR4th 1221, § 4, pp 1231-1238. However, we remain convinced that plaintiff’s claim for retaliatory discharge is one sounding in contract. The rights and obligations of employers and employees under the Workers’ Disability Compensation Act arise out of and are incidental to the contract of employment and, therefore, are contractual in nature. Boshaw v J J Newberry Co, 259 Mich 333, 341; 243 NW 46 (1932), overruled on other grounds Halfacre v Paragon Bridge & Steel Co, 368 Mich 366, 376; 118 NW2d 455 (1962); Erickson v Goodell Oil Co, Inc, 384 Mich 207, 211; 180 NW2d 798 (1970); Lee v J H Lee & Son, 72 Mich App 257, 265; 249 NW2d 380 (1976). Furthermore, the liability imposed upon employers for their employees’ work-related injuries is not based on tort theory. Rather, employees who receive an injury "arising out of and in the course of employment” are entitled to benefits without regard to whether the employer was negligent or at fault. See MCL 418.301(1); MSA 17.237(301X1). In spite of that, because we are bound to follow Dunbar, we are compelled to conclude that plaintiff’s cause of action sounds in tort, and, therefore, plaintiff may claim all the damages allowed for that cause of action, including damages for mental or emotional distress. In view of our holding, the trial court’s ruling accepting defendant’s proposed instruction limiting plaintiff’s damages solely to nominal damages for lost wages, was error. Intrinsic in the concept of an at-will employment contract is the mutual understanding between employer and employee that neither party to the agreement has an expectation of continued employment. Consequently, an "at-will” employee who seeks to enforce an action for retaliatory discharge, whether the action sounds in tort or contract, will be limited in the damages that can be obtained. Having ruled that the plaintiffs action is to be treated as one sounding in tort, the measure of damages for her mental or emotional distress necessarily will be confined to proof of distress arising solely from the retaliatory nature of the discharge, because an at-will employee has no reasonable expectation of being continued in employment. Similarly, whether the action be in tort or contract, damages for lost wages will be nominal because an at-will employee cannot show a reasonable expectation of continued employment. Sepanske v Bendix Corp, 147 Mich App 819; 384 NW2d 54 (1985). We realize that at-will employees may only be able to recover minimal damages for their mental and emotional distress, and nominal damages for lost wages in an action sounding in tort. Nonetheless, while we do not condone acts of retaliatory discharge, we should not disregard basic concepts of the common law in order to deter retaliatory discharges. We should not judicially convert "at-will” employment contracts into "just cause” contracts for the purpose of deterring such conduct. Any other remedy for the at-will employee, or penalty against the employer, must be provided by the Legislature. Accordingly, we reverse and remand for proceedings consistent with this opinion. We do not retain jurisdiction. Phillips v Butterball Farms Company, Inc, 442 Mich 909 (1993). A person shall not discharge an employee or in any manner discriminate against an employee because the employee filed a complaint or instituted or caused to be instituted a proceeding under the act or because of the exercise by the employee on behalf of himself or herself or others of a right afforded by this act. In this case, the plaintiff was a ninety-day probationary employee, whose employment was terminable at will. In Dunbar, the plaintiff was a registered nurse employed by the Michigan Department of Mental Health at the Northville Regional Psychiatric Hospital for approximately two years.
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