§ 1.2.3 THE HISTORY AND EARLY DEVELOPMENT OF THE AT-WILL RULE.

• Jurisdiction: Arizona

§ 1.2.3 The History and Early Development of the At-Will Rule. The contractual relationship between the master and his servant, as it existed until the early 1800s, was a paternalistic and often a friendly relationship.⁶ The master was responsible for the safety and wellbeing of the servant.⁷ The worker often worked in the owner's home or shop and was allowed close social ties with the owner.⁸ The worker was given job security by customs of the trade and by laws that required apprenticeships and circumscribed the conditions under which an employee could be discharged.⁹ The lack of skilled workers also provided employment security. The expanding West offered employment opportunities and security where skilled labor was in short supply. These conditions had a reciprocal effect by creating a short supply of workers in the colonial East, resulting in job security and improving their working conditions.¹⁰

By the early 1800s, the guild laws and customs were no longer compatible with marketplace dynamics. Local trade unions were replacing the guilds and were bargaining collectively for wages, hours, and working conditions. By the mid-1830s, trade unions were forming central labor organizations that were able to exert strong political and economic influence.¹¹ The Industrial Revolution, with the adoption of laissez faire economics, put an end to the remnants of the guild system.

In the 1840s, waves of immigrants from Europe, fleeing famine and economic adversity, flooded labor markets, imperiling the security of trade and union organizations and driving down wages. In spite of the growth of unions, most of the workforce was not included in labor organizations, particularly in the western states. Non-union common-law contracts became the norm for employer-employee relations.

The English common law presumed that an employment contract setting an annual salary was for a one-year term and required cause to terminate; a clear expression of intent was required to terminate without cause.¹² This was known as the "English rule." American courts followed the English rule.¹³ The Territorial Supreme Court in Old Dominion Copper Mining & Smelting Co. v. Andrews,¹⁴ following its protectionist attitude toward Labor, held that where a term was not stated, it was presumed that the employee had been hired for the same length of time as the parties adopted for the payment of wages. A hiring for a yearly rate was presumed to be a term for a year. An employee could not be...