- AT-WILL EMPLOYMENT
- What legal doctrine still provides the baseline rule that employees have little protection in the employment relationship in the United States?
- What broad categories of workers are not subject to the employment-at-will doctrine?
- Can the employee handbook that an employer hands out to you constitute a valid contract that binds the employer?
What legal doctrine still provides the baseline rule that employees have little protection in the employment relationship in the United States?
Many workers must accept the fact that they are "at-will" employees subject to the employment-at-will doctrine. This doctrine provides that either the employer or employee can end the employment relationship at will—even for a seemingly unfair reason. The Tennessee Supreme Court explained the doctrine in Payne v. Western & Atlantic R. Co. (1884): "All may dismiss their employees at will, be they many or few, for good cause, for no cause or even for cause morally wrong without being thereby guilty of legal wrong." Under the employment-at-will doctrine, an employer can dismiss an employee for a good reason, bad reason, or no reason at all. The reasoning behind the rule is that because an employee can leave the employment relationship at any time, the employer should have the same right to terminate the relationship at will. Unfortunately, the rule does not take into consideration the power disparity between most employers and employees. An employer often can easily replace an employee, while an employee often has a much more difficult time finding a comparable job.
Much of current employment law deals with whether various exceptions to the employment-at-will doctrine apply. For example, employers (with a certain number of employees) cannot fire workers for certain discriminatory reasons—because of the employees' race, sex, or religion. There also have developed many so-called public policy exceptions to the employment-at-will doctrine. Common public policy exceptions to the employment-at-will doctrine are that employers may not fire workers for serving on a jury, exposing illegal activities by the employer in the workplace, filing a workers' compensation claim, or having your wages garnished.
What broad categories of workers are not subject to the employment-at-will doctrine?
Workers who have an employment relationship governed by a contract called a collective bargaining agreement (CBA) generally are not subject to the employment-at-will doctrine. The CBA is a contract of the employment relationship between the workers, usually represented by a union, and the management of the employer. Workers under a CBA are not subject to the harsh rule of employment-at-will because a common goal for unions in their negotiations with management is to include a just-cause provision in the CBA, which is the governing contract that controls the parameters of the employment relationship. A just-cause clause provides that an employer shall not fire a worker except for just cause—a very good or justifiable reason.
Sometimes workers who do not work at a large plant with a collective bargaining agreement still are not subject to the employment-at-will doctrine because they have signed an employment contract. This means that a worker who has a valid employment contract is often not subject to the employment-at-will doctrine. Rather, the employee is subject to the terms and conditions of the signed contract. Most workers, however, are not protected by a specific contract. If there is not an agreement that serves as the guide to the employer-employee relationship, the default rule in many states is the employment-at-will doctrine.
Can the employee handbook that an employer hands out to you constitute a valid contract that binds the employer?
It depends. Courts in some states recognize a so-called "handbook exception" to employment at will, which means that the employer can create a contract by making certain promises and offers in the employee handbook. For example, some courts have determined that employee handbooks that make statements providing a form of job security for employees can alter the employment-at-will relationship. The Michigan Supreme Court first recognized the handbook exception to the employment-at-will doctrine in 1980.
Other states hold that an employee handbook cannot convert an at-will employment relationship into a contractual relationship. Many courts have determined that the employee handbook must set forth a clear promise which the employees view as an offer in order to be viewed as an enforceable contract. Many times employers will include a statement in the handbook which expressly disclaims the intention to create any sort of contract. Often these statements say that the employer reserves the right to unilaterally change any provisions in the handbook. Here is one such sample statement: "I UNDERSTAND THAT THIS HANDBOOK IS A GENERAL GUIDE AND THAT THE PROVISIONS OF THIS HANDBOOK DO NOT CONSTITUTE AN EMPLOYMENT AGREEMENT (CONTRACT) OR A GUARANTEE OF CONTINUED EMPLOYMENT."
For many Americans in a variety of jobs, employment-at-will agreements mean they can be terminated at any time for little or no reason (iStock).