Prudential Insurance Co. of America v. Cheek

Background

Robert T. Cheek, a man who had worked for more than ten years for the Prudential Insurance Company, sued after Prudential’s superintendent refused to give him a requested letter describing his service and why he left. He also alleged that Prudential and two other large insurers agreed not to hire any man who had left or been discharged by one of the others for two years. The suit relied on Missouri’s §3020, which requires corporations doing business in the State to issue such letters on request. After state courts reviewed the claims and a jury found for Cheek, appeals followed up to this Court.

Reasoning

The core question was whether Missouri could require corporations to give departing employees a truthful letter about their service and whether an agreement among companies to refuse hiring ex-employees could be challenged. The Court agreed with the state court that the law is a reasonable regulation of corporations doing business in Missouri, aimed at correcting a harmful custom of withholding job credentials. The Court held the statute did not unreasonably interfere with freedom of contract and that employers could be held liable if they combined to block a former worker’s ability to get hired.

Real world impact

The ruling means corporations doing business in Missouri must provide requested service letters and can face damage claims if they refuse. It also recognizes that employer agreements to blacklist former employees can be actionable, protecting workers’ ability to seek new jobs. This decision affirms the state-court result and is binding here.

Dissents or concurrances

The Chief Justice, Justice Van Devanter, and Justice McReynolds dissented; the opinion records their disagreement but does not give their reasoning in this text.