{"id":1108,"date":"2019-08-26T16:42:58","date_gmt":"2019-08-26T16:42:58","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/?post_type=chapter&#038;p=1108"},"modified":"2024-04-25T01:41:19","modified_gmt":"2024-04-25T01:41:19","slug":"employment-at-will-doctrine","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/chapter\/employment-at-will-doctrine\/","title":{"raw":"Employment at Will Doctrine","rendered":"Employment at Will Doctrine"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Explain the Employment at Will Doctrine<\/li>\r\n \t<li>Identify exceptions to the Employment at Will Doctrine<\/li>\r\n<\/ul>\r\n<\/div>\r\nThe at will employment doctrine states that employment is for an indefinite period of time and may be terminated by either the employer or employee. The National Conference of State Legislatures (NCSL) notes that the presumption that employment relationships are \u201cat-will\u201d is in effect in all U.S. states except Montana. \u201cAt will\u201d employment is a uniquely U.S. construct. In most countries, employees can only be terminated for cause. In the EU and many other countries, a written employment contract is required by law and the contract can\u2019t be changed except by mutual agreement.[footnote]\"<a href=\"https:\/\/www.quora.com\/What-countries-in-the-world-dont-have-at-will-employment\" target=\"_blank\" rel=\"noopener\">What Countries in the World Don't Have At Will Employment?<\/a>\" Quora. Accessed September 12, 2019.[\/footnote]\r\n\r\n<img class=\"alignright wp-image-2347\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/08\/11172356\/photo-1429216967620-ece20ff3a5f9-300x199.jpeg\" alt=\"Decorative image.\" width=\"350\" height=\"232\" \/>\r\n\r\nPractically speaking, \u201cat will\u201d means that an employer can terminate an employee at any time for any reason (except an illegal one) or for no reason without incurring legal liability. This freedom also applies to employees, who can leave a job at any time for any or no reason with no adverse legal consequences. Critically, \u201cat-will also means that an employer can change the terms of the employment relationship with no notice and no consequences.\u201d[footnote]\"<a href=\"http:\/\/www.ncsl.org\/research\/labor-and-employment\/at-will-employment-overview.aspx\" target=\"_blank\" rel=\"noopener\">At-Will Employment Overview<\/a>.\" National Conference of State Legislatures. April 15, 2008.\u00a0Accessed September 12, 2019. [\/footnote] For example, an employer can change salary or commission structure and modify or eliminate benefits. While this type of change may not be illegal, it\u2019s not advisable, since employees are free to reject the revised terms and leave. However, the rule does \u201c[leave] employees vulnerable to arbitrary and sudden dismissal, a limited or on-call work schedule depending on the employer\u2019s needs, and unannounced cuts in pay and benefits.\u201d[footnote]Ibid.[\/footnote]\r\n\r\nAlthough at-will is the employment default, that can be modified by contract. For example, employees who are represented by unions will generally be protected by a collective bargaining agreement that requires \u201cjust cause\u201d for termination. Senior executives may also have written contracts requiring \u201cgood cause\u201d for termination. Factors that would constitute cause include unsatisfactory performance, misconduct and economic necessity; these factors may be details in the bargaining agreement or employment contract.\r\n<div class=\"textbox tryit\">\r\n<h3>PRactice Question<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/28077682-76c3-4cb7-b5b3-649be3849cdf\r\n\r\n<\/div>\r\n<h2>Exceptions to Employment at Will<\/h2>\r\nCourts have established three basic exceptions to the at will doctrine: public policy, implied contract, and implied covenant of good faith.\r\n<h3>Public Policy Exception<\/h3>\r\nThe public policy exception protects employees from adverse employment actions that violate a public interest. Although this exception is interpreted differently across states, there are four categories generally recognized in employment law:[footnote]Ibid.[\/footnote]\r\n<table>\r\n<caption>Public Policy Exceptions<\/caption>\r\n<thead>\r\n<tr>\r\n<th scope=\"col\">Category<\/th>\r\n<th scope=\"col\">Example<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td>Refusing to perform an act that state law prohibits.<\/td>\r\n<td>Refusing an employer\u2019s request to commit perjury at a trial.<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Reporting a violation of the law.<\/td>\r\n<td>Reporting an employer\u2019s fraudulent accounting practices or use of child labor.<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Engaging in acts that are in the public interest.<\/td>\r\n<td>Joining the National Guard or performing jury duty.<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Exercising a statutory right.<\/td>\r\n<td>Filing a claim under the state workers\u2019 compensation law.<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<h3>Implied Contract Exception<\/h3>\r\nAn employer can create an implied contract of employment through language included in an employee handbook, policies, practices or written or verbal assurances. For example, a supervisor\u2019s comment that commits the employer to a term of employment\u2014for example, \u201cyour career is with us!\u201d\u2014or a specific developmental process\u2014\u201cwe have a defined development and discipline process\u201d\u2014may constitute an implied contract. That is, even if there is no written contract, the employee may have a valid expectation of continued employment or only for cause termination based on the supervisor\u2019s statements, an established practice or description of termination processes and procedures in the employee handbook. Although courts generally disregard overly broad language\u2014i.e., promises of lifetime employment\u2014as aspirational, it\u2019s best to avoid such statements and, further, to incorporate an unambiguous disclaimer on employee materials stating that comments, policies, and procedures do not create contractual rights.<img class=\"alignright wp-image-2348\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/08\/11172639\/note-3545527_960_720-300x258.png\" alt=\"Decorative image.\" width=\"350\" height=\"301\" \/>\r\n<h3>Implied Covenant of Good Faith<\/h3>\r\nIn some states, courts have applied an implied covenant of good faith and fair dealing to employment relationships. \u201cImplied covenant of good faith\u201d is \u201ca general assumption of the law of contracts that people will act in good faith and deal fairly without breaking their word, using shifty means to avoid obligations or denying what the other party obviously understood.\u201d[footnote]\"<a href=\"https:\/\/dictionary.law.com\/Default.aspx?selected=906\" target=\"_blank\" rel=\"noopener\">Implied Covenant of Good Faith and Fair Dealing<\/a>.\" Law.com. Accessed September 12, 2019.[\/footnote] Based on this, courts have variously required just cause for termination and prohibited terminations made in bad faith or motivated by malice. An example of a bad faith termination is firing a salesperson who booked a record sale to avoid paying the commission.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/ad35e904-3e59-47bd-a65b-a8c118ef3bf9\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Explain the Employment at Will Doctrine<\/li>\n<li>Identify exceptions to the Employment at Will Doctrine<\/li>\n<\/ul>\n<\/div>\n<p>The at will employment doctrine states that employment is for an indefinite period of time and may be terminated by either the employer or employee. The National Conference of State Legislatures (NCSL) notes that the presumption that employment relationships are \u201cat-will\u201d is in effect in all U.S. states except Montana. \u201cAt will\u201d employment is a uniquely U.S. construct. In most countries, employees can only be terminated for cause. In the EU and many other countries, a written employment contract is required by law and the contract can\u2019t be changed except by mutual agreement.<a class=\"footnote\" title=\"&quot;What Countries in the World Don't Have At Will Employment?&quot; Quora. Accessed September 12, 2019.\" id=\"return-footnote-1108-1\" href=\"#footnote-1108-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-2347\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/08\/11172356\/photo-1429216967620-ece20ff3a5f9-300x199.jpeg\" alt=\"Decorative image.\" width=\"350\" height=\"232\" \/><\/p>\n<p>Practically speaking, \u201cat will\u201d means that an employer can terminate an employee at any time for any reason (except an illegal one) or for no reason without incurring legal liability. This freedom also applies to employees, who can leave a job at any time for any or no reason with no adverse legal consequences. Critically, \u201cat-will also means that an employer can change the terms of the employment relationship with no notice and no consequences.\u201d<a class=\"footnote\" title=\"&quot;At-Will Employment Overview.&quot; National Conference of State Legislatures. April 15, 2008.\u00a0Accessed September 12, 2019.\" id=\"return-footnote-1108-2\" href=\"#footnote-1108-2\" aria-label=\"Footnote 2\"><sup class=\"footnote\">[2]<\/sup><\/a> For example, an employer can change salary or commission structure and modify or eliminate benefits. While this type of change may not be illegal, it\u2019s not advisable, since employees are free to reject the revised terms and leave. However, the rule does \u201c[leave] employees vulnerable to arbitrary and sudden dismissal, a limited or on-call work schedule depending on the employer\u2019s needs, and unannounced cuts in pay and benefits.\u201d<a class=\"footnote\" title=\"Ibid.\" id=\"return-footnote-1108-3\" href=\"#footnote-1108-3\" aria-label=\"Footnote 3\"><sup class=\"footnote\">[3]<\/sup><\/a><\/p>\n<p>Although at-will is the employment default, that can be modified by contract. For example, employees who are represented by unions will generally be protected by a collective bargaining agreement that requires \u201cjust cause\u201d for termination. Senior executives may also have written contracts requiring \u201cgood cause\u201d for termination. Factors that would constitute cause include unsatisfactory performance, misconduct and economic necessity; these factors may be details in the bargaining agreement or employment contract.<\/p>\n<div class=\"textbox tryit\">\n<h3>PRactice Question<\/h3>\n<p>\t<iframe id=\"assessment_practice_28077682-76c3-4cb7-b5b3-649be3849cdf\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/28077682-76c3-4cb7-b5b3-649be3849cdf?iframe_resize_id=assessment_practice_id_28077682-76c3-4cb7-b5b3-649be3849cdf\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<h2>Exceptions to Employment at Will<\/h2>\n<p>Courts have established three basic exceptions to the at will doctrine: public policy, implied contract, and implied covenant of good faith.<\/p>\n<h3>Public Policy Exception<\/h3>\n<p>The public policy exception protects employees from adverse employment actions that violate a public interest. Although this exception is interpreted differently across states, there are four categories generally recognized in employment law:<a class=\"footnote\" title=\"Ibid.\" id=\"return-footnote-1108-4\" href=\"#footnote-1108-4\" aria-label=\"Footnote 4\"><sup class=\"footnote\">[4]<\/sup><\/a><\/p>\n<table>\n<caption>Public Policy Exceptions<\/caption>\n<thead>\n<tr>\n<th scope=\"col\">Category<\/th>\n<th scope=\"col\">Example<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Refusing to perform an act that state law prohibits.<\/td>\n<td>Refusing an employer\u2019s request to commit perjury at a trial.<\/td>\n<\/tr>\n<tr>\n<td>Reporting a violation of the law.<\/td>\n<td>Reporting an employer\u2019s fraudulent accounting practices or use of child labor.<\/td>\n<\/tr>\n<tr>\n<td>Engaging in acts that are in the public interest.<\/td>\n<td>Joining the National Guard or performing jury duty.<\/td>\n<\/tr>\n<tr>\n<td>Exercising a statutory right.<\/td>\n<td>Filing a claim under the state workers\u2019 compensation law.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3>Implied Contract Exception<\/h3>\n<p>An employer can create an implied contract of employment through language included in an employee handbook, policies, practices or written or verbal assurances. For example, a supervisor\u2019s comment that commits the employer to a term of employment\u2014for example, \u201cyour career is with us!\u201d\u2014or a specific developmental process\u2014\u201cwe have a defined development and discipline process\u201d\u2014may constitute an implied contract. That is, even if there is no written contract, the employee may have a valid expectation of continued employment or only for cause termination based on the supervisor\u2019s statements, an established practice or description of termination processes and procedures in the employee handbook. Although courts generally disregard overly broad language\u2014i.e., promises of lifetime employment\u2014as aspirational, it\u2019s best to avoid such statements and, further, to incorporate an unambiguous disclaimer on employee materials stating that comments, policies, and procedures do not create contractual rights.<img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-2348\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/4056\/2019\/08\/11172639\/note-3545527_960_720-300x258.png\" alt=\"Decorative image.\" width=\"350\" height=\"301\" \/><\/p>\n<h3>Implied Covenant of Good Faith<\/h3>\n<p>In some states, courts have applied an implied covenant of good faith and fair dealing to employment relationships. \u201cImplied covenant of good faith\u201d is \u201ca general assumption of the law of contracts that people will act in good faith and deal fairly without breaking their word, using shifty means to avoid obligations or denying what the other party obviously understood.\u201d<a class=\"footnote\" title=\"&quot;Implied Covenant of Good Faith and Fair Dealing.&quot; Law.com. Accessed September 12, 2019.\" id=\"return-footnote-1108-5\" href=\"#footnote-1108-5\" aria-label=\"Footnote 5\"><sup class=\"footnote\">[5]<\/sup><\/a> Based on this, courts have variously required just cause for termination and prohibited terminations made in bad faith or motivated by malice. An example of a bad faith termination is firing a salesperson who booked a record sale to avoid paying the commission.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question<\/h3>\n<p>\t<iframe id=\"assessment_practice_ad35e904-3e59-47bd-a65b-a8c118ef3bf9\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/ad35e904-3e59-47bd-a65b-a8c118ef3bf9?iframe_resize_id=assessment_practice_id_ad35e904-3e59-47bd-a65b-a8c118ef3bf9\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-1108\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Employment at Will Doctrine. <strong>Authored by<\/strong>: Nina Burokas. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li><strong>Authored by<\/strong>: Adeolu Eletu. <strong>Provided by<\/strong>: Unsplash. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/unsplash.com\/photos\/DqWEAOHsAvc\">https:\/\/unsplash.com\/photos\/DqWEAOHsAvc<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em>. <strong>License Terms<\/strong>: Unsplash License<\/li><li><strong>Authored by<\/strong>: nolan-luna . <strong>Provided by<\/strong>: Pixabay. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/pixabay.com\/illustrations\/note-notes-annotation-to-write-3545527\/\">https:\/\/pixabay.com\/illustrations\/note-notes-annotation-to-write-3545527\/<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/about\/cc0\">CC0: No Rights Reserved<\/a><\/em>. <strong>License Terms<\/strong>: Pixabay License<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section><hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-1108-1\">\"<a href=\"https:\/\/www.quora.com\/What-countries-in-the-world-dont-have-at-will-employment\" target=\"_blank\" rel=\"noopener\">What Countries in the World Don't Have At Will Employment?<\/a>\" Quora. Accessed September 12, 2019. <a href=\"#return-footnote-1108-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><li id=\"footnote-1108-2\">\"<a href=\"http:\/\/www.ncsl.org\/research\/labor-and-employment\/at-will-employment-overview.aspx\" target=\"_blank\" rel=\"noopener\">At-Will Employment Overview<\/a>.\" National Conference of State Legislatures. April 15, 2008.\u00a0Accessed September 12, 2019.  <a href=\"#return-footnote-1108-2\" class=\"return-footnote\" aria-label=\"Return to footnote 2\">&crarr;<\/a><\/li><li id=\"footnote-1108-3\">Ibid. <a href=\"#return-footnote-1108-3\" class=\"return-footnote\" aria-label=\"Return to footnote 3\">&crarr;<\/a><\/li><li id=\"footnote-1108-4\">Ibid. <a href=\"#return-footnote-1108-4\" class=\"return-footnote\" aria-label=\"Return to footnote 4\">&crarr;<\/a><\/li><li id=\"footnote-1108-5\">\"<a href=\"https:\/\/dictionary.law.com\/Default.aspx?selected=906\" target=\"_blank\" rel=\"noopener\">Implied Covenant of Good Faith and Fair Dealing<\/a>.\" Law.com. Accessed September 12, 2019. <a href=\"#return-footnote-1108-5\" class=\"return-footnote\" aria-label=\"Return to footnote 5\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":17,"menu_order":6,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Employment at Will Doctrine\",\"author\":\"Nina Burokas\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"\",\"author\":\"Adeolu Eletu\",\"organization\":\"Unsplash\",\"url\":\"https:\/\/unsplash.com\/photos\/DqWEAOHsAvc\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"Unsplash License\"},{\"type\":\"cc\",\"description\":\"\",\"author\":\"nolan-luna \",\"organization\":\"Pixabay\",\"url\":\"https:\/\/pixabay.com\/illustrations\/note-notes-annotation-to-write-3545527\/\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"Pixabay License\"}]","CANDELA_OUTCOMES_GUID":"506d0591-bebd-4299-9651-de249f721473, c1ee760a-ffe3-4f7f-81e8-70d76e86130d, 43f4d667-cf37-4ca2-a7ba-061090fc5a64","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-1108","chapter","type-chapter","status-publish","hentry"],"part":1100,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/1108","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/users\/17"}],"version-history":[{"count":10,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/1108\/revisions"}],"predecessor-version":[{"id":3394,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/1108\/revisions\/3394"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/parts\/1100"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapters\/1108\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/media?parent=1108"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/pressbooks\/v2\/chapter-type?post=1108"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/contributor?post=1108"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-humanresourcesmgmt\/wp-json\/wp\/v2\/license?post=1108"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}