At-will employment

At-will employment

At-will employment is a doctrine of American law that defines an
employment relationship in which either party can break the relationship with no liability provided there was no express contract for a definite term governing the employment relationship and that the employer does not belong to a collective bargain (i.e. a union). Under this legal doctrine:

Several exceptions to the doctrine exist, especially if unlawful discrimination is involved regarding the termination of an employee.

Since this reduces job security, it can create, in theory, an atmosphere of fear that may contribute to workplace bullyingfact|date=May 2008. As a means of downsizing, such as closing an unprofitable factory, a company may terminate employees en masse. However, there are legal limitations upon the employer's ability to terminate without reason.


The at-will rule has its genesis in a rule in Horace Gray Wood’s 1877 treatise on master-servant relations. Wood cited four U.S. cases as authority for his rule that when a hiring was indefinite, the burden of proof was on the servant to prove that an indefinite employment term was for one year. ["Id." at 601, 292 N.W.2d at 886.] In "Toussaint v. Blue Cross & Blue Shield of Michigan", the Court noted that "Wood’s rule was quickly cited as authority for another proposition." ["Id."]

Some courts saw the rule as requiring the employee to prove an express contract for a definite term in order to maintain an action based on termination of the employment. ["Id". at 603, 292 N.W.2d at 887.] Thus was born the U.S. at-will employment rule, which allowed discharge for no reason. This rule was adopted by all U.S. states. It was not until 1959 that the first judicial exception to the at-will rule was created. ["Petermann v. Int'l Bhd. of Teamsters, Chauffeurs, Warehousemen, & Helpers of Am., Local 396", 174 Cal. App. 2d 184, 344 P.2d 25 (1959)]

Since then, several common law and statutory exceptions to at-will employment have been created. However, in the majority of cases, the burden of proof remains upon the discharged employee. No U.S. state but Montana has chosen to statutorily modify the employment at-will rule. [Robinson, Donald C., "The First Decade of Judicial Interpretation of the Montana Wrongful Discharge from Employment Act (WDEA)", 57 "Mont. L. Rev." 375, 376 (1996).] In 1987, the Montana legislature passed the Wrongful Discharge from Employment Act (WDEA). The Montana Act is unique in that, although it purports to preserve the at-will concept in employment law, it also expressly enumerates the legal bases for a wrongful discharge action. ["Id."] Under the WDEA, a discharge is wrongful only if: "it was in retaliation for the employee's refusal to violate public policy or for reporting a violation of public policy; the discharge was not for good cause and the employee had completed the employer's probationary period of employment; or the employer violated the express provisions of its own written personnel policy." [Mont. Code. Ann. § 39-2-904 (2008)]

Public policy exceptions

Forty-two U.S. states and the District of Columbia recognize public policy as an exception to the at-will rule.cite news| last=Muhl| first=Charles|url=| publisher=Monthly Labor Review| title=The employment-at-will doctrine: three major exceptions| date=January 2001| accessdate=2006-03-20|format=PDF] Under the public policy exception, an employer may not fire an employee if it would violate the state's public policy or a state or federal statute.

42 states have a public policy exception, thus 8 states do not. Those 8 states are:
* Alabama
* Florida
* Georgia
* Louisiana
* Maine
* Nebraska
* New York
* Rhode IslandThe District of Columbia also has a public policy exception. [In "Adams v. George W. Cochran & Co.," 597 A.2d 28 (D.C. App. 1991), the District of Columbia Court of Appeals carved out a narrow public policy exception to the at-will employment doctrine. The appellate court held that the exception is "when the sole reason for the discharge is the employee's refusal to violate the law, as expressed in a statute or municipal regulation." 597 A.2d 28, 32. In 1997, this exception was expanded in "Carl v. Children's Hospital," 702 A.2d 159 (D.C. App. 1997). The court held that, in addition to the exception articulated in "Adams," wrongful discharge would also include a violation of public policy if the public policy is "solidly based on a statute or regulation that reflects the particular public policy to be applied, or (if appropriate) on a constitutional provision concretely applicable to the defendant's conduct." 702 A.2d 159, 163.]

Implied contract exceptions

Thirty-eight U.S. states also recognize an implied contract as an exception to at-will employment.Under the implied contract exception, an employer may not fire an employee "when an implied contract is formed between an employer and employee, even though no express, written instrument regarding the employment relationship exists." Proving the terms of an implied contract is often difficult, and the burden of proof is on the fired employee. Implied employment contracts are most often found when an employer's personnel policies or handbooks indicate that an employee will not be fired except for good cause or specify a process for firing. If the employer fires the employee in violation of an implied employment contract, the employer may be found liable for breach of contract.

37 US states have an implied-contract exception, thus 13 do not. Those 13 states are:
* Delaware
* Florida
* Georgia
* Indiana
* Louisiana
* Massachusetts
* Missouri
* Montana
* North Carolina
* Pennsylvania
* Rhode Island
* Texas
* Virginia

The implied-contract theory to circumvent at will employment must be treated with caution. In 2006, the Texas Supreme Court in "Matagorda County Hospital District, Petitioner v Christine Burwell, Respondent", [49 Tex Sup J 370, 2006 Tex LEXIS 137] held that a provision in an employee handbook stating that dismissal may be for cause, and requiring employee records to specify the reason for termination, did not modify an employee's at-will employment. The New York Court of Appeals, that state’s highest Court, also rejected the implied-contract theory to circumvent employment at will. In "Anthony Lobosco, Appellant v New York Telephone Company/NYNEX, Respondent" [751 N.E.2d 462 (2001)] , the court restated the prevailing rule that an employee could not maintain an action for wrongful discharge where state law recognized neither the tort of wrongful discharge, nor exceptions for firings that violate public policy, and an employee explicit employee handbook disclaimer preserved the at-will employment relationship. A reading of these cases as well as cases from other states strongly suggests employers adopt an [ employee handbook policy manual] with effective disclaimers in order to avoid to the greatest extent possible implied contact claims made by present and former employees.

Covenant of good faith and fair dealing exceptions (aka. "Implied-in-law" Contracts)

Only eleven U.S. states have recognized a breach of an implied covenant of good faith and fair dealing as an exception to at-will employment. [It is unclear whether courts in the District of Columbia recognize a good-faith covenant exception. In "Kerrigan v. Britches of Georgetowne, Inc.," 705 A.2d 624 (D.C. App. 1997), the District of Columbia Court of Appeals ruled against the plaintiff, who alleged that his employer had violated a "covenant of good faith and fair dealing" in conducting sexual harassment investigation against him. It is unclear if the Court of Appeals recognized the good-faith covenant but that the plaintiff did not prove a violation of the covenant, or whether the court did not recognized the good-faith covenant exception at all.] These 11 states are:
* Alabama
* Alaska
* Arizona
* California
* Delaware
* Idaho
* Massachusetts
* Montana
* Nevada
* Utah
* Wyoming

This exception for a covenant of good faith and fair dealing represents the most significant departure from the traditional employment-at-will doctrine. Rather than narrowly prohibiting terminations based on public policy or an implied contract, this exception — at its broadest – reads a covenant of good faith and fair dealing into every employment relationship. It has been interpreted, by some courts, to mean either that employer personnel decisions are subject to a “just cause” standard or that terminations made in bad faith or motivated by malice are prohibited.

Statutory exceptions

Although all U.S. states have a number of statutory protections for employees, most wrongful termination suits brought under statutory causes of action use the federal anti-discrimination statutes which prohibit firing or refusing to hire an employee because of race, color, religion, sex, national origin, age, or handicap status. Other reasons an employer may not use to fire an at-will employee are:

*for refusing to commit illegal acts – An employer is not permitted to fire an employee because the employee refuses to commit an act that is illegal.
*family or medical leave – federal law permits most employees to take a leave of absence for specific family or medical problems. An employer is not permitted to fire an employee who takes family or medical leave for a reason outlined in the Family and Medical Leave Act.
*not following own termination procedures – often, the employee handbook or company policy outlines a procedure that must be followed before an employee is terminated. If the employer fires an employee without following this procedure, the employee may have a claim for wrongful termination. [ [ Wrongful Termination Lawyers & Legal Information] ]

Examples of federal statutes include:

*Equal Pay Act of 1963 (relating to discrimination on the basis of sex in payment of wages);
*Title VII of the Civil Rights Act of 1964 (relating to discrimination on the basis of race, color, religion, sex, or national origin);
*Age Discrimination in Employment Act of 1967 (relating to certain discrimination on the basis of age with respect to persons of at least 40 years of age);
*Rehabilitation Act of 1973 (related to certain discrimination on the basis of handicap status);
*Americans with Disabilities Act of 1990 (relating to certain discrimination on the basis of handicap status).
*The National Labor Relations Act provided protection to members of labor unions, but this portion of the Act has been repealed. [cite journal |coauthors=John Haymes & Brian Kleiner |year= 2001 |title=Federal and State Statutory Exemptions to At-Will Employment |journal=Managerial Law |volume=1 |issue=43 |pages=92–98 |url= |accessdate= 2007-11-18]

ee also

*Employment Rights Act 1996, for the UK approach to employment protection. See also, Contracts of Employment Act 1963, for the first modern UK law on the requirement to give reasonable notice before any dismissal.
*Employment agency
*European Social Charter
*UK agency worker law



* "Highstone v. Westin Engineering, Inc.", [ No. 98-1548] (8/9/99) - at-will relationship must be clear to the employees

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