§ 6.2.6 AT-WILL EMPLOYMENT.

• Jurisdiction: Arizona

§ 6.2.6 At-Will Employment. In Arizona, at-will employment is contractual in nature.⁹ The at-will nature of a contract does not preclude maintaining an action for interference with that contract. The Restatement takes this position in comment g to Section 766, providing that unless a party to an at-will contract has terminated the agreement, the contract is valid and a defendant may not improperly interfere with it. The fact that a contract is at-will may be taken into account in determining the damages suffered by a plaintiff.¹⁰ In Wagenseller, the Supreme Court of Arizona adopted this reasoning and held that a cause of action in tort is available to any party to an employment contract, at-will or otherwise, when a third party improperly and intentionally interferes.¹¹

In Wagenseller, the plaintiff brought a claim against her supervisor for intentional interference with her employment relationship with the hospital at which she worked. The defendant first argued that there could be no wrongful interference with an employment contract which was at-will because there could be no tort for inducing an employer to do what it had a legal right to do, i.e., terminate the employee without cause.¹² The court disagreed, observing that this approach overlooks the possibility of someone being fired for "bad cause," and also recognizing that even an at-will contract cannot be interfered with or terminated at the will of others.¹³ The court also noted the Restatement (Second) of Torts rule that an at-will contract is "valid and subsisting" until terminated, and a defendant may not improperly interfere with it.¹⁴ Therefore, "a cause of action in tort is available to a party to any contract, at-will or otherwise, when a third party improperly and intentionally interferes with the performance of that contract."¹⁵

The defendant also argued that, as a supervisor, she had a privilege to interfere with the contract.¹⁶ The supreme court again disagreed. The court noted that the "privilege" was the subject of much debate, and that three distinct formulations could be found in the case law.¹⁷ The first requires that the interferer act with malice.¹⁸ The second imposes liability for intentional and unjustified interference resulting in harm, placing the burden of justification on defendants.¹⁹ The court adopted the third approach, described in the Restatement (Second) of Torts, which subjects the defendant to liability for interference only if his or her acts were "improper."²⁰...