NH's Top Court Takes A Stand On Wrongful Demotion

Originally published in NH Business Review 2/15/2019

In its first employment decision of 2019, the NH Supreme Court declined to recognize a claim for wrongful demotion under New Hampshire law.

In Clark v. NH Department of Employment Security, Clark sued the agency, her current employer, on multiple grounds, including "wrongful discharge/demotion." Clark brought her claims after being demoted from her supervisor position for, as she alleges, raising concerns to her superiors in furtherance of public policy.

NHDES has been Clark's employer since the mid-1990s. In October 2010, Clark was promoted to a supervisor position in the Benefit Support Unit, where she was responsible for overseeing 15 employees, including three interns. Two of the interns were the children of other NHDES employees, who Clark also named as defendants in the case. Clark received a positive performance evaluation for her first few months on the job.

During this timeframe, Clark became concerned about the interns' hours, responsibilities and behavior in the workplace. Clark raised these concerns to her supervisor and to the director of the Unemployment Compensation Bureau. Clark also wanted to advise union representatives of her concerns, but she claims her superiors prevented her from doing so.

Clark further alleges that she suspects her superiors altered a review she prepared for another employee in which she mentioned that the employee had also raised concerns about the interns to her superiors.

After bringing her concerns about the interns to her superiors, Clark received a negative performance evaluation and was advised that she would be laid off as part of an unrelated mandatory reduction in force. Prior to the layoff, however, Clark accepted a demotion to a different position within NHDES. In her current position with the agency, Clark claims she has no supervisory duties and is not eligible for a wage increase unless and until she becomes a supervisor.

Clark brought suit against NHDES seeking various forms of damages, including back pay and future wages, as well as reinstatement to her former position. The trial court dismissed the wrongful discharge/demotion claim on the grounds that the plaintiff's employment was not in fact terminated, and Clark appealed to the NH Supreme Court.

On appeal, Clark argued that the theory behind wrongful discharge supports extending it to situations where an employee is demoted, but not terminated, for retaliatory purposes.

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