## Facts

- John D. Sullivan worked for Massachusetts Mutual Life Insurance Company (Massachusetts Mutual) as an assistant securities analyst, beginning in February 1985, at a salary of $28,500.
- Massachusetts Mutual Corporate Investors, Inc., a wholly owned subsidiary, was also named as a defendant.
- Sullivan claimed a coworker told him that employees had possessed inside information about two stocks held in the company’s portfolio and that selling those stocks without suspending trading would have violated securities laws.
- Sullivan repeatedly raised internal concerns to supervisors about possible insider trading and about his own potential liability, and he proposed structural changes to separate or insulate trading operations.
- Sullivan alleged supervisors reacted negatively, including statements that he would be “out the door” if he did not stop raising the issue and that insider trading was common in the industry.
- Massachusetts Mutual asserted Sullivan was discharged for unsatisfactory performance, including poor judgment and unwillingness to follow instructions; the record also reflected that Sullivan failed a financial-analyst examination and that his understanding of securities law largely came from reading newspapers.
- No insider trading was shown to have occurred on the summary-judgment record, and Sullivan did not report any suspected violations to government authorities until after his termination.
- Sullivan sued in 1988, alleging (1) breach of an oral agreement that he could be fired only for “good cause,” (2) wrongful discharge in violation of Massachusetts public policy based on whistleblowing, and (3) civil RICO.
- The RICO claim was later voluntarily dismissed with prejudice, and defendants moved for summary judgment on the remaining contract and public-policy counts.

## Issues

1. Whether Sullivan produced sufficient evidence, under Massachusetts law, of a definite oral “good cause” employment agreement that overcame the presumption of at-will employment.
2. Whether Massachusetts public policy limits an employer’s right to terminate an at-will employee where the employee was allegedly fired for raising internal concerns about suspected securities-law violations, when no violation was proven and the employee contacted regulators only after termination.

## Decision

- The court granted summary judgment for defendants on the breach-of-contract claim.
- The court granted summary judgment for defendants on the public-policy wrongful-discharge claim.
- Judgment entered for Massachusetts Mutual Life Insurance Company and Massachusetts Mutual Corporate Investors, Inc. on all remaining claims.

## Legal Principles

- Massachusetts employment is presumed to be at will unless the parties clearly agree to restrict termination.
- General, indefinite, or aspirational oral statements about job security, advancement, or a “future” are not enough to create an enforceable “for-cause” contract; any discharge limitation must be sufficiently definite to show a mutual agreement.
- Massachusetts recognizes only a narrow public-policy exception to at-will termination, generally limited to situations such as (a) asserting a legally protected right, (b) performing an important public duty, or (c) refusing to commit an unlawful act.
- The public-policy exception is not expanded simply because an employee voices internal objections about suspected wrongdoing; courts look for a clear public policy tied to recognized categories of protected conduct.
- Where an employee does not report to public authorities while employed, does not communicate a threat to report, and the summary-judgment record does not show an actual violation, Massachusetts law does not require recognizing a public-policy claim on these facts.

## Conclusion

The court held that Sullivan remained an at-will employee because the evidence showed, at most, nonbinding statements about future employment rather than a definite “good cause” agreement, and it further held that Massachusetts’ narrow public-policy exception did not cover Sullivan’s internal complaints about suspected securities-law concerns when no violation was established and disclosure to authorities occurred only after his discharge.


Sullivan v. Massachusetts Mutual Life Insurance, 802 F. Supp. 716 (1992)