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An Overview of At-Will Employment(all states)

This guide is for information only and is not legal advice. Legal advice must be tailored to specific facts. This guide is based on general legal principles and does not address all possible claims, exceptions or conditions related to the subject matter discussed.

by Marilynn Mika Spencer

Nearly every state in the United States has a legal doctrine called “at-will employment.” At-will employment allows an employer to do almost anything it wants with respect to employment. It can rearrange, modify, change, eliminate, and add jobs, hours, compensation, benefits, schedules, duties, titles. It can hire, fire, transfer, demote, promote, train, and not train employees. These changes must take effect prospectively (in the future). For example, an employer cannot change your pay rate for work you have already done, but can change it for work you have not yet done.

There are a just a few things that might prevent an employer from doing what it wants, and not all states recognize all of these exceptions to at-will employment. You MUST consult with an attorney licensed in your state to know what your rights are.

The possible exceptions to an employer’s at-will freedom to do what it wants with its employees and the workplace include:

  1. public policy;
  2. Constitutional (civil service) rights;
  3. a collective bargaining agreement (union contract)
  4. an individual contract;
  5. contracts for a specific term; or
  6. employment policies.

(1) Public policy refers only to things that are specifically prohibited by a statute (law) enacted by the legislature, or prohibited by a regulation promulgated (established ) by a government agency. Public policy includes statutes prohibiting discrimination against people in specific protected groups, which include sex, race, national origin, disability, age (40 years and older), religion, marital status, pregnancy and genetic information. In some states, sexual orientation is also protected.

In this context, “discrimination” means to treat differently from others who are not in the same protected group, but are similarly situated. “Discrimination” does not mean an employer has to be fair, or has to make good decisions.

A person complaining of discrimination must file a claim with an administrative agency before he or she can file a lawsuit. In every state, the person can file a claim with the federal Equal Employment Opportunity Commission (EEOC) within 180 days of the discriminatory act. However, if your state has its own antidiscrimination laws, the state agency that enforces those laws may have an agreement with the EEOC to share work, and that agreement may provide for a longer time in which to file. This “longer time” is often 300 days.

The EEOC web site is: http://www.eeoc.gov/

Public policy also protects people who blow the whistle on a matter of public concern, complain about improper wage and hour practices, or who exercise voting rights, family leave rights, jury duty rights, domestic violence rights, and a few more statutes. There are various ways to enforce these rights. Again, not every state recognizes all of these protections.

When people talk about “wrongful termination,” they are really talking about wrongful termination in violation of public policy. For a termination to be “wrongful,” it must violate a public policy. An employer cannot change terms of employment or fire you if the reason for the change is against the law. For example, an employer cannot increase your workload because of your race, sex, national origin, religion, etc. or because you blew the whistle on safety violations. However, some states do not recognize a cause of action (legal claim) for wrongful termination.

(2) Constitutional rights, sometimes called civil service rights, apply to employees of government agencies. These employees are entitled to due process with respect to employment decisions. Typically, these rights are enforced through a system the employer agency established, or which another government body established. Many of these claims must be filed within six months of the offending event.

(3) A collective bargaining agreement (CBA) is an agreement between a union and an employer, sometimes called a “union contract.” The CBA includes all the grievances, arbitrations and memoranda of understanding that interpret or supplement the CBA. A CBA is similar to a small body of law that applies only to the group of job classifications covered by the CBA. The rights and responsibilities of the employer, employees, and union are as stated in the CBA. A CBA is enforced by the union, not by a private attorney. Time limits can be extremely short, sometimes just two or three days. A CBA is legal even in a socalled “right-to-work” state.

(4) There are three kinds of contracts that a court may enforce. The first is a written contract which expresses (states) some or all terms of employment. People who work in certain industries are more likely to have this kind of contract: science, the arts, upper management, law, academia, intellectual property, finance, and a few more. The contract will include terms of employment which the employer and the employee have to follow. If a party does not, the other party has a potential claim for breach of contract. These contracts may be enforced in court or by arbitration, depending on the terms of the contract. The period of time to enforce the contract (that is, to file a lawsuit against a party who did not follow the contract) varies from state to state.

Some documents look like employment contracts but are not. These documents are an employer’s way of reinforcing that employment is at-will. Terms of these documents usually address a lack of rights rather than rights the employee has, and nearly always require the employee to sign a statement agreeing the employment is at-will.

A second type of contract that a court may enforce is an express oral contract. These can be difficult to prove because there is no formal record of the agreement. The period of time to enforce the contract varies from state to state.

Finally, even if there is no express contract, a few states recognize an implied contract. Generally, an implied contract means that a particular employee in a particular situation had a right to be treated differently. Getting a court to recognize an implied contract is an even higher hurdle than getting a court to recognize an oral contract. Courts rarely find implied contracts, and when they do, they are limited to long-term employees with a certain kind of employment history.

(5) Some employees are hired for a specific term (duration). For example, an employee may be hired to work from March 15 through November 24, 2012. If your state recognizes a claim for breach of a contract for a specific term, then the employer cannot end the employment during that specified term unless the employee violates significant terms of the employment or fails to perform.

(6) Some employers have written or unwritten policies or employee handbooks. These are effectively contracts, but instead of applying to one employee, they apply to all or many employees. Many – perhaps most – employer policies include a statement that employment is at-will, or that the handbook does not create a contract, or that the employer can change the terms at any time. Enforcing these policies can be difficult because terms often conflict.

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