Workplace

At most companies and in most states, employment is "at will." This means, absent any contractual obligation, employees retain the right to resign employment at any time, for any reason, with or without notice. Likewise, absent any contractual obligation, the company retains the right to terminate an employee any time, for any reason, with or without notice.

Traditionally, the contractual relationship between employer and employee has been based on the rule that any hiring for an unspecified term represents a relationship that is terminable at will. Where an employment-at-will relationship exists, an employer may dismiss an employee for good cause or no cause, or even for a moral wrong without them being guilty of a legal wrong.

CHANGING LANDSCAPE. About 65 percent of all U.S. workers are said to be employed on an at-will basis. In the past, an employer’s unfettered right to terminate employees who were not hired for a specific duration was curtailed only by certain legislative restrictions, for example, laws prohibiting the discharge of employees based on unlawful discrimination.

The employment-at-will doctrine has undergone significant erosion. Recently, judicial limitations on employers’ rights to terminate have been promulgated under a contract or "civil wrong" theory or some combination of the two. Many states now recognize some court-created exceptions to the employment-at-will rule. The 1960s and 70s witnessed the enactment of many federal regulations and statutes that place further restrictions on employers’ rights to terminate employees at will. Examples of these include:

• Title VII of the 1964 Civil Rights Act;

• The Age Discrimination in Employment Act of 1967;

• The Rehabilitation Act of 1973;

• The Vietnam Era Veterans’ Readjustment Assistance Act of 1974;

• The Employee Retirement Income Security Act of 1974;

• The Consumer Credit Protection Act;

• The Jury System Improvement Act of 1974;

• Executive Order No. 11246 (requiring Affirmative Action Plans)

• The U.S. Bankruptcy Code;

• The Americans With Disabilities Act of 1990; and,

• The Family and Medical Leave Act of 1993.

Some states, including California, Georgia, Louisiana and South Dakota, have codified the common-law employment-at-will doctrine as traditionally conceived.

Nevertheless, significant erosion of the doctrine has taken place at the state level. In fact, many state statutes now contain much broader prohibitions than those existing under relevant federal law.

For example, the District of Columbia prohibits employers from discharging employees based on personal appearance, sexual orientation, political affiliation or matriculation in school. Numerous bills designed to further restrict the right of employers to terminate at-will employees have been introduced in the legislature of various states, assuring further erosion of the at-will doctrine.

TAKING PRECAUTIONS. To minimize the liability associated with employment at will, companies should avoid using language in handbooks, letters, policies and documents that inadvertently alter the at-will nature of the employment relationship. For example, avoid using the following language and words:

1. "Permanent employment" or "permanent position," or phrases such as "permanent employee."

2. Comments related to "long-term employment."

3. "Termination for just cause."

4. The term "career," which implies "long-term" employment.

5. Language that promises pay or a certain pay plan for any length of time, e.g., "annual" salary.

Most of us think of "employment at will" as it relates to termination of employment. While employers may have the "right" to terminate "at will," a company may not illegally discriminate in its termination decision.

Because the government operates under the enforcement procedure that the burden of proof is on the employer, the company must always be able to establish that its employment decisions (especially termination decisions) were legal, fair, compliant and proper. In the absence of proof, if a company decision is challenged by a government agency, there can be an automatic assumption of discrimination.

Legitimate, detailed documentation can help to meet the burden of proof and is necessary even when terminating an employee who has been with the company less than 90 days.

If you keep these points in mind, you’ll be able to minimize the risk associated with indiscriminate use of your "employment-at-will" rights. Now, if we could just ensure that these rights aren’t further restricted by government intervention...