The Insidious Deception That Is "Employment At Will"

Constangy, Brooks, Smith & Prophete, LLP
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Constangy, Brooks, Smith & Prophete, LLP

Employers, don't get played.

"This is an employment-at-will state, and I can fire you for a good reason, a bad reason, or no reason at all."

Oh, yeah?

Technically, this is true in almost every state, but employers should not count on employment at will as their only defense in an unlawful discharge case.

Why? Because even if you're in an employment-at-will state, you're not. Not really.

The above illustration is symbolic. The carrot represents employment at will. The tiny people falling off the cliff represent employers. The woman with the big nose represents Pinocchio. Get it?

First, if the employee has a contract of employment for a definite term (say, one year), then employment at will does not apply.

Second, even for the majority of employees who do not have such contracts, the employment-at-will rule does not apply to terminations that are conducted for unlawful reasons. And the list of unlawful grounds for termination has just about swallowed up the employment-at-will rule. Here are some reasons for termination that the employment-at-will rule doesn't excuse: Discrimination based on race, sex, sexual orientation, gender identity, national origin, religion, color, age, disability, genetic information, retaliation for protected activity related to the anti-discrimination laws, interference or retaliation under the Family and Medical Leave Act, retaliation for reporting unsafe workplace conditions, retaliation for engaging in protected concerted activity under the National Labor Relations Act, retaliation for whistleblowing . . .

I could go on all day.

The above reasons for termination are illegal in the reddest of red states. And if the state, city, or county where you operate is purple or blue -- or if you're a public sector employer anywhere -- you can count on having even more exceptions to employment at will than these.

"But," you retort, "I'm not terminating my employee for any of these reasons. I'm terminating him because I can't stand him. Doesn't that fall under employment at will?"

It could. Hating your employee for non-discriminatory, non-retaliatory reasons could be a legal reason for termination. But it's complicated. An employee who is terminated only because the employer hates him -- or for any arbitrary or unfair reason -- may be able to persuade a government agency, judge, or jury that the employer's stated reason is a lie and that the true reason was an illegal one. For example, "I agree that my boss hated me. Did you notice that she is a Millennial and I am 53 years old? She hates me (and therefore fired me) because of my age. That's age discrimination!"

So, how to deal with this?

Even in an employment-at-will jurisdiction, employers should make sure that their termination decisions are fair and in accordance with their policies and practices. This means providing some degree of "due process" to the employee who is being terminated:

  • If the employee is a poor performer, warn him about his deficiencies, reiterate your expectations and the consequences if his performance doesn't improve, offer appropriate help, consider placing him on a performance improvement plan before termination, and give him a reasonable chance to shape up. And, of course, document all of that. If the employee can't improve despite documented progressive warnings and a PIP, then you should be able to safely terminate him.
  • If the employee commits multiple minor infractions or has poor attendance and the absences aren't covered by the FMLA or otherwise legally protected, provide progressive discipline that clearly spells out the problem and the consequences if she fails to improve. And, of course, document all of that. If it happens again after the final warning stage, then you should be able to safely terminate her.
  • If the employee commits serious misconduct (for example, dishonesty, harassment, or threatening or violent behavior) or makes a huge mistake (for example, that poor performer we were talking about makes a bookkeeping error that will cost you $1 million), conduct a thorough investigation based on the circumstances, and give due consideration to any evidence that the employee presents in his own defense. And, of course, document all of that. If, after conducting a fair investigation, you still think you have reason to believe that the employee is responsible and that the extenuating circumstances (if any) are insufficient, then you should be able to safely terminate.

This should work even in an employment-at-will state!

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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