The At-Will Employment Rule Is The Disease And Unions Are The Cure

Imagine this scenario: You have a pretty good job in the private sector. You’ve been working there a while and have been making fairly good money. You have received good reviews and haven’t been disciplined. One day, your boss walks in and says, “You’re fired.” When you ask, “Why?”, your boss says, “No reason.” For the vast majority of employees in the United States today, this scenario – while perhaps unlikely – is perfectly legal.

The dirty little secret of the American workplace is the at-will employment rule, which governs the majority of non-government jobs (and a fair number of public sector jobs as well). According to this rule, an at-will employee can be fired for a good reason, a bad reason or no reason at all.

I can hear the protests from employers: if I fired someone for no reason, they’ll sue me. Yes, maybe. But would they win? Unless there are special circumstances (see discussion below), in many cases, the employer would win. What is your legal claim? What law did your employer violate? There is a very good chance that the termination of your employment didn’t violate any laws at all.

Are there exceptions to the at-will employment rule? Yes. The first and best exception is for union employees. Nearly every union contract contains two provisions that take the at-will employment rule and throw it out with the trash: first, a provision stating that employees may only be discharged for just cause, and second, a grievance-arbitration procedure providing that a neutral third party decides whether the employer had just cause to fire you. Not only do these contractual provisions establish a valuable set of workers’ rights, they also avoid the need to sue your employer. Instead of sending individual employees to sue in court, the collective bargaining agreement provides an in-house mechanism that is (usually) cheaper and quicker than litigation for determining whether your termination was just or unjust.

What about negotiating a better deal on your own? A few select high-powered employees with special skills have the clout to negotiate individual employment contracts, and most of those contracts include just cause protection. But the vast majority of non-union workers don’t have many options to fight arbitrary employer behavior, and most of those choices involve getting a lawyer and going to court – an expensive and time-consuming process in a judicial system that is increasingly unfriendly to the underdogs of society.

In rare cases, the requirement of just cause for termination has been adopted through legislation. If you live in Montana or Puerto Rico, you are in luck – those jurisdictions have laws requiring employers to have just cause for firing an employee. In other states, the courts have constructed various exceptions to the at-will rule in limited situations. There is a public policy exception, which has been adopted by the majority of states, including Massachusetts. According to the public policy exception, an employer cannot fire an employee when the termination would violate a well-defined and explicit public policy. This exception has been applied to cases in which employees were discharged for filing workers’ compensation claims, serving on juries or refusing to commit perjury for the employer. There is the implied contract exception, which all but 12 states have adopted. Under this exception, courts have found that statements made to employees by employers, usually in job handbooks and other writings, may create a promise that the employee will only be fired for good cause. Such documents may also bind the employer to follow certain procedures before firing an employee. The most far-reaching and least common exception is the implied covenant of good faith and fair dealing, which has been adopted by Massachusetts and 10 other states. According to this doctrine, an employer must act in good faith in making employment decisions. The implied covenant of good faith and fair dealing prohibits an employer from firing an employee for a bad reason – such as to avoid paying the employee a commission – but does not go so far as to require the employer to have a good reason for firing someone.

But what about all the laws out there protecting workers from unfair treatment, you might ask. Yes, but. Each of these laws has a very specific target and procedure, and courts and government agencies have in some cases created significant hurdles to winning a claim. So, for example, if you are fired in retaliation for blowing the whistle on your employer’s illegal or unsafe actions, you may be protected. If you are fired in retaliation for exercising your rights under some other statute (such as filing a discrimination complaint or trying to organize a union), you may be protected. If you are fired because of your race, sex, ethnicity, religion, age, disability (or perceived disability), sexual orientation, veteran’s status or other specific category, you may be protected. But ask any employment lawyer whether it is easy it is to win a discrimination lawsuit: even in cases where there seems to be blatant bias, complicated legal rules can keep justice out of reach or delay the outcome for years.

So, yes, there are many different ways the law protects workers from unfair treatment, but most of these statutes and common law exceptions to the at-will employment rule do not address the scenario set out at the beginning of this article. Let’s say the boss is telling the truth when he or she says, “I don’t have a reason” and can prove it in court. Unlikely? Perhaps. Even the implied covenant of good faith and fair dealing – if you’re lucky enough to be in a state that has adopted it, like Massachusetts – may not be enough to protect you. And what if the boss does have a reason that has nothing to do with any of the protected categories set out above? It doesn’t have to be a good reason, as long as there is no evidence of bad faith. Your performance isn’t up to snuff, or you’ve broken a company rule. You and the boss are having a personality conflict. Or maybe you’re just not on the A Team, not among the boss’s favorites. None of these reasons, on its face, is illegal, at least in most jurisdictions. If you don’t have a union to protect you, you may be out of luck. Unless, of course, you live in Montana.

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