At Will Employment: Definition

Introduction

Many job seekers are often glad to land a job they applied for.

However, they may be confounded to read in the employee handbook or employment contract that they are employed ‘at will’. Some may not care to find out what it means until it is too late but those who try to find out what this ‘at will’ thing means, know the trouble they are in. At-will employment means that the employer can fire the employee at any time even without a good reason, except for several illegal reasons as stipulated in this paper (Ballam 2000). Typically, if the employer makes up his or her mind to let that employee go, that is the end of that contract.

Employees, in this case, have a very limited legal stand to defend their jobs.

Apart from the state of Montana, all other states in the US have at-will employment. Montana has laws that protect its employees as long as they have completed the initial probation period (Foulkes 2005). After this period, an employer will need a good cause to fire an employee. In other states, adoption of at-will employment is at the discretion of the employer and many of them do.

Over the past couple of decades, the at-will employment doctrine has been under legal assault in the United States. It is estimated that in nearly all 50 states in the US that uphold the policy of at-will employment, some judges have ruled in favor of employees sacked by companies asserting that the sacking was “unfair”. In most cases, the employer was ordered to rehire the employee but in some instances, they were ordered to pay for damages (Foulkes 2005).

The upcoming of at-Will-Employment”

It is well known that for the larger part of US job market history; the judges resolutely upheld the freedom of a company to sack any worker at will (Larson 2003). However, all these changed when a court in California once favored a union employee who was fired for declining to lie to investigators scrutinizing corruption in the union in their judgment. The court ruled that the employee, having been fired for refusing to commit perjury, was unfairly treated and that the firing was “obnoxious to sound morality” (Ballam 2000).

Thirty-eight states recognized what can be termed as “implied contract”. An implied contract is an exception to the employment-at-will policy where employees are given written or verbal assurance to their disciplinary procedures or job security. For instance, if the employee handbook or employment contract has statements that outline situations when an employee’s employment can be terminated, that can be taken to be an implied contract.

The final revolution in the at-will employment doctrine came when eleven states recognized the “covenant-of-good-faith exception”.

The covenant of good faith also referred to as a covenant of fair dealing demands just looking into every employment relationship. This exception has been used by courts in many instances to rule against termination of employment, demanding that an employer must have a “just” and “reasonable” cause to dismiss an employee. The dismissal can be unfair if it was done in “malice” or “bad faith”.

Identifying an at-will employment contract

The United States law assumes that every employee is employed at will except in a situation where the employee can use written documents or oral statements by the employer to prove otherwise.

Employment Documents

The employee written policies, job application, employee handbook, job evaluations, and other employment documents can tell whether an employee is employed at will or not. It is always a dead end looking for such statements unless if the signed contract indicates clearly that the employee is employed at will (Larson 2003).

However, several employers have written employment policies that will need a just and good cause to terminate an employee. This often required a list of reasons for the employer to terminate an employee. Otherwise, the employee’s job is protected.

Statements made by the employer

If an employer makes verbal statements, either during the hiring process or after the employee has been absorbed into the company indicating that that the employee can be fired with a good cause, then the employee can use this to show that he/she is not employed at will. This is specifically better if the statements have been made repeatedly or in public (Malkinson 2004).

Rights of an at-will employee

Even at-will employees are entitled to several rights as far as termination and employment are concerned. As much as an employer can fire the employee for “any” good reason, there are reasons for termination that are illegal in the eyes of federal law and cannot be legally used as a basis for dismissal (Larson 2003).

Exceptions to firing in at-will employment doctrine

By the 1980s, unfair dismissal cases being settled in court had increased so much since the first ruling in favor of an employee by a Californian jury in 1967. This led to the expansion of job security concepts. In 1987, the Californian court of appeal ruled in favor of dismissed employees in more than two-thirds of dismissal cases and awarded an average of $1.5 million to dismissed employees in damages (Malkinson 2004).

This, and other numerous cases all over America led to the creation of several exceptions that at-will employment can be terminated. The exclusions are in different categories as stated below:

Civil Rights Laws: Pretextual Termination”

This was an anti-prejudice civil rights Act passed in 1964, it enlarged its protection to workers. With this law passed employees could no longer be sacked by their employers for either of the following reasons; the color of their skin, gender, race, nationality, or even religion. More legal protections have been included in that act to include anti-discrimination based on age and sexual orientation.

The creation of these anti-discrimination laws to cover the employment sector led to employees arguing that their dismissals were “pretextual” in that although employers cited other legal reasons for termination, the actual reasons were motivated by discriminatory motives of either age, gender, sexual orientation, race, skin color, country of origin, language or religion (Muhl 2001).

However, it is important to note that employers may end the employment of an at-will employee even on some ridiculous and arbitrary reasons as long as they do not contravene these (and other) exceptions. For instance, as much as an employer cannot fire an employee for the color of their skin, the employer is at liberty to fire an employee for the color of their car.

Public Policy Exceptions”

Most States in America recognize certain “public policies” that protect employees from dismissal in addition to the protection expressly provided by federal law. The availability and nature of these policies vary by state and jurisdiction.

However, the rationales that underlie these policies are the same (Roehling 2003).

State laws and other common laws that are set by the legislature create implied or express public policy, which will be undermined in the event of employers dismissing their employees contrary to these public policies.

Whistle-Blower Protections”

This can be regarded as a legal extension of public policy.

Employees are covered by the “whistleblower” statute, which supports action against an employer if an employee is dismissed for reporting the employer’s or company’s illegal activities or conduct to the state. In this exception, the employee will be covered only for reporting any misconduct or illegal activity to the government agency that is responsible to respond to the employer’s activity (Roehling 2003). However, an employee will not be covered in this exception if they are fired for telling the company’s or employer’s illegal activities or misconduct to friends or the media.

Contractual Protections”

Employee handbooks and manuals can be used by dismissed employees to claim unjust dismissal if a company outlines the nature of disciplines and disciplinary processes that precedes termination in the handbook. An employee may claim unfair dismissal if their employment is terminated contrary to the statements in the employee handbook and manuals.

Most employees often insert a language or statement in these manuals and handbooks that insulate them from any action in case they dismiss employees for reasons not covered in the dismissal handbook (Roehling 2003).

The Response by Employers and Legislatures”

Many employers are alarmed by the numerous unjust dismissal cases ending up in courts. In many instances, employers have lost these cases and often face huge legal costs such as court costs and massive damage awards to employees (Park 2003). This has led to many employers adding express an will employment clause in the employment contract. Besides this, many employers have gone ahead to get rid of all statements that are potentially troublesome from their employee handbooks and employment contracts.

Recruiters are also instructed to make no statements that may imply otherwise if the employment is at will.

Some employers opt to pay generous settlements in compensation to dismissed employees in exchange for waiving any possibility of future claims based on the termination of the employment.

Direction of at-will employment

Employers often claim that by firing employees, they just reassert their rights based on the at-will doctrine. On the other hand, workers who have been sacked may assert that the company they were employed with tried to trick them out of the security of their job (Mesriani 2009). Employees propose that the legislation create a branch that would fully protect the at-will employees from unfair dismissal and act as an arbitrator in settling employer-employee disputes. This would be a fair course to settle disputes, for both employees and employers alike.

Special legislation to handle employment disputes would assist not only those employees falling under the exceptions in at-will employment dismissal but also to insure them against expensive lawsuits which often take years to settle. These cases often drag long and damage an employee’s morale bearing in mind the fact that settlement could be back pay or reinstatement to employment rather than compensation to damages and punitive measures to the employer (Mesriani 2009).

Several states have put in place laws that try to balance the rights of the employer and employee in at-will employment. In 1987 the State of Montana passed the wrongful Employment Discharge Act which factored in the rights of employees claiming to have been dismissed wrongfully. It states the principle that the employment of at-will employees may be terminated for any reason that the terminating party considers sufficient. However, it goes ahead to state that this discharge could be regarded wrongful if the dismissal principal violates any of the exceptions stated including public law, common law, or other employee rights (Roehling 2003).

Several states, including Montana, have capped the limit on the remedies in which a dismissed employee suing a former employer gets.

This includes awarding the employee fringe benefits and lost wages but only for a maximum period of four years.

The employer will be ordered to pay punitive damages only when the court is convinced that they were involved in malice or fraud in the wrongful discharge. Besides that, any accrued wages that the employee could have earned in employment will be deducted from the total amount that is awarded in damages.

When prospective employees should sign the at-will agreement

In theory, a prospective employee doesn’t have to sign the at-will employment contract. However, most courts have upheld the rule that employers can refuse to hire or fire an employee if they refuse to sign the at-will employment contract (Roehling 2003).

This is why most employees will have no alternative other than append their signatures on the dotted line.

Conclusion

The United States of America, which is the world’s major industrial power continues to insist on the general at-will employment doctrine, Other countries including Great Britain, France, Italy, Germany, Canada, Sweden, and Japan have statutory provisions that employers must show good causes for terminating their employees.

The state’s logical basis to the collective assumption that employers’ and workers’ concerns in the free market are obstructing the attempts to restructure the employment industry and cutting the freedoms of the employer is not helping. However, employers seek profits since they are in business. At times, they sacrifice a lot of resources to attain their objectives including getting rid of employees, even for reasons that cannot be documented. By doing this, they do not promote higher real wages, new opportunities and enhance living standards. The government’s tampering with the labor market may have a greater voter and emotional appeal, but it may turn counterproductive in that the move may corrode genuine human prosperity and freedom.

For employees, although they may not have much of a choice in signing at-will employment agreements, this does not imply that the employer will dismiss them without a good reason. Employers value employees as a resource and they do not gain a thing by firing them. However, they should put more effort into trying to work things out before arbitrarily dismissing employees. Dismissal should be the last resort when everything else has failed. Nobody would feel good to be fired for no apparent reason, just as much as no employee likes being under an overbearing boss. However, care must be taken when approaching the at-will employment issue.

References

Ballam, Deborah A. (2000). “Employment-at-will: The impending death of a doctrine.” American Business Law Journal Austin. Vol. 39, Issue 7.

Foulkes, Arthur (2005).”In Defense of Employment-at-Will”. Mises Daily.

Larson, Aaron (2003). “Wrongful Termination of At Will Employment”. Law Offices of Aaron Larson.

Malkinson, Terrance (2004).” At-Will Employment.” Today’s Engineer. Web.

Mesriani Law Group (2009). “Advantages and Disadvantages of Employment Arbitration.”

Muhl, C.J. (2001). “The Employment-at-Will Doctrine: Three Major Exceptions.” Monthly Labor Review.

Park, Sandra S. (2003). “Working Towards Freedom from Abuse: Recognizing ‘Public Policy’ Exception to Employment-At-Will.” New York University Annual Survey of American Law 59 (spring): 121–62.

Roehling, M.V. (2003). The Employment at-Will Doctrine: Second Level Ethical Issues and Analysis. Journal of Business Ethics. 47(2): 110-125. Web.