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At-Will Employment Myth

Is At-Will Employment a Myth?

Forty-nine of 50 U.S. states (all but Montana) still formally recognize the at-will employment doctrine. This principle means that either the employer or employee may end an employment relationship at any time, with or without notice, for any reason or no reason at all.  However, there are now many separate limitations on employers’ rights to terminate an employee’s employment. So many that employers should almost never rely on the at-will employment doctrine alone to justify letting an employee go.

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Should We Throw Out At-Will Employment?

No. At-will employment is still a fundamental premise for the employment relationship.

If nothing else, it places the burden on the employee to prove that their employer violated their individual rights. This helps prevent meritless litigation.

But there is more. It also establishes that any employment is of an indefinite nature by default. That’s the primary reason why its important for employers to reference at-will employment in offer letters, employment contracts, and employee handbooks. Although not always necessary, reciting the at-will employment rule helps eliminate any doubt whether the employment was intended for a specific term.

How Then Is At-Will Employment a Myth?

Fair question. Why do lawyers both emphasize at-will employment and downplay it at the same time?

Basically, while it doesn’t provide much, at-will employment is still the most flexible starting point for employers.

Despite “at-will employment,” an array of employment discrimination laws now place many restrictions on reasons why employers CAN’T fire someone. But there are still a nearly infinite number of reasons why you CAN separate an employee.

Employers can further yield their discretion to end the employment relationship. This is done through contracts–typically, either employment agreements with individual employees or collective bargaining agreements with unions representing groups of employees.

One prevalent contractual limitation on employers’ power to end employment is the “just cause” or “for cause” requirement. Most employers only offer “just cause” protection when they have diminished leverage or increased motivation to satisfy the employees.

These protections are virtually automatic (though not mandatory) components of union contracts. There they are often undefined, with “cause” left to an arbitrator’s discretion.

Some employment agreements also replace “at-will” employment with “for cause” protection. These contracts (especially for higher level employees) often include a definition of what constitutes cause. However, even those definitions are sometimes relatively vague. For example, “cause” may include “poor performance” or “gross misconduct,” terms that are subject to interpretation.

Note: Many public (i.e., governmental) employees obtain constitutional, and often statutory, protections against arbitrary employment terminations. However, some categories of public employees will still default to at-will employment.

Don’t Play the At-Will Employment Card!

Even assuming an employee does technically have at-will employment, it’s risky to wave that around as the basis for discharge. You should always have a better reason than no reason!

In reality, every employer (a) has a reason and (b) knows the reason before they get rid of an employee. Pretending otherwise isn’t believable. So, if you tell the employee, “You’re employed at will, so we don’t have to tell you why you’re being fired,” they will hear, “We don’t want you to know why you’re being fired.” Some will then interpret this to mean, “We can’t tell you why you’re being fired, because it’s an illegal reason.”

So (unless, I suppose, you’re firing an employee for an illegal reason) you probably want to at least clue them into what the real reason is. Sure, there could be a situation where the specifics of a valid termination decision are confidential state secrets. But those are rare, and there’s still a way to deliver a better message than “Because . . . AT-WILL EMPLOYMENT.”

For more about ending the employment relationship, check out these webinars: Don’t Fire Me on Friday and Conducting Your Next Reduction in Force.