What’s Employment-At-Will, Anyway?

– Christopher Butler, Esq.

 

Employment-at-will is a commonly observed, yet often misunderstood, legal doctrine (and it’s not the same thing as right-to-work). In fact, the employment-at-will doctrine is followed in some form by virtually all U.S. states (to the exception of Montana). In its basic application, the concept of employment-at-will simply means that an employer may lawfully terminate an employee’s employment at any time, without a specific reason and without advance notice (e.g., for poor performance, job elimination, misconduct, change in business needs, etc.). By that same token, under the at-will doctrine, an employee may voluntarily separate from (“quit”) his/her employer at any time, likewise without reason or notice (e.g., to pursue a more lucrative offer, better working hours, enhanced benefits, etc.).

 

Despite the existence of the employment-at-will doctrine, when terminating an employee, an employer is required to consider and comply with a myriad of federal, state, and local employment laws governing the employer-employee relationship, including those that: prohibit employee discrimination and retaliation; regulate employee wages and hours; provide for leaves of absence; and protect whistleblowers, just to name a few. In reality, there’s a virtual “alphabet soup” of federal, state, and local employment laws that trump the at-will doctrine. On the federal side alone, we have the Title VII, the ADA, the ADEA, the FMLA, the FLSA, USERRA, among numerous others.

 

For instance, the Civil Rights Act (Title VII) prohibits an employer from terminating an employee for reasons based on that worker’s race, gender, religion, age, political affiliation, sexual orientation, or other protected categories. Further, the ADA prohibits discriminatory employment decisions based on an employee’s actual or perceived disability, and may require an employer to reasonably accommodate a worker’s disability. Moreover, the ADEA prohibits discrimination against a worker who is age 40 or older. In addition, the FMLA may obligate an employer to provide a worker with an unpaid leave of absence for certain qualifying health conditions. And, the FLSA regulates employee wages, working hours, overtime, and the like. Finally, the USERRA protects a servicemember’s job status while he/she is on active military duty. Thus, these laws, among many, many others, may complicate an employer’s ability to otherwise terminate an at-will employee.

 

One common misconception about employment-at-will is that an employer must have a good reason or some justification for terminating an employee. While it’s certainly true that an employer should have a valid reason for firing a worker (for a multitude of reasons), it’s not a legal requirement. Again, under the at-will doctrine, an employer may freely terminate an employee for any reason, or no reason at all, so long as that reasoning does not violate other state and federal employment laws. In practice, most employers routinely terminate employees for legitimate, non-discriminatory, and non-retaliatory reasons, such as poor performance, violation of company policies, and reductions in force, without legal repercussions.

 

That said, in many circumstances perception is reality and the “optics” of an employee separation may give the appearance that a particular termination was unlawful rather than justified. Thus, with all involuntary separations, a business must carefully document its reasoning and decision-making, and be prepared to explain them under pressure. The existence of (or lack thereof) clear and articulate supporting documentation is often the proverbial tipping point when weighing a legitimate termination decision against a disgruntled employee’s discrimination or retaliation claim. Indeed, the determination of whether an employee’s termination was permissible under the at-will doctrine, or rather was in violation of prevailing employment laws, is highly appearance based and fact driven, often left to a judge or jury to decide and bearing uncertain and routinely costly outcomes.

 

The Takeaway

 

In practice, an employee initially bears the initial burden of proof in showing that his/her termination was unlawful. While the employment-at-will doctrine alone will often sufficiently bolster a company’s termination decision, employers frequently find themselves in the unenviable position of defending against an EEOC charge or lawsuit (even when a worker’s termination was entirely lawful). Accordingly, a well-documented personnel file outlining the basis for and facts directly leading to an employee’s termination will invariably be the most cost-effective and successful countermeasure to litigation. If your business is encountering a difficult employee performance or termination issue, or simply seeks to avoid one, we have decades of experience helping business-owners, HR professionals, and management understand and comply with prevailing employment laws, avoid claims, and defeat lawsuits, and perhaps we can help you too – contact Chris Butler with Agenzia.