Employment at Will

AuthorJeffrey Lehman, Shirelle Phelps

Page 127

A common-law rule that an employment contract of indefinite duration can be terminated by either the employer or the employee at any time for any reason; also known as terminable at will.

Traditionally, U.S. employers have possessed the right to discharge their employees at will for any reason, be it good or bad. The "at-will" category encompasses all employees who are not protected by express employment contracts that state that they may be fired only for good cause. "Good cause" requirements are typically a part of collective bargaining agreements negotiated by employee unions; nonunion workers rarely have this form of protection. The at-will doctrine also does not apply to contracts for a specified term, such as an employment contract that contemplates the employee providing service for a expressly designated number of years.

The United States is the only major industrial power that maintains a general employment-at-will rule. Canada, France, Germany, Great Britain, Italy, Japan, and Sweden all have statutory provisions that require employers to show good cause before discharging employees.

Beginning in the 1980s, employment at will came under challenge in the United States. Employees had grown increasingly dissatisfied with the rule for a variety of reasons. For one thing, a decline in the number of self-employed individuals?due, in part, to a continuing decline in the number of farmers?meant that most U.S. citizens worked for someone else. For another, a typical worker who was discharged currently lost more than in the past in terms of PENSION, insurance, and other benefits.

As a result, a greater number of discharged workers brought suits alleging WRONGFUL DISCHARGE from employment. By the 1980s, as concepts of job security expanded, employees became increasingly successful in such suits. In 1987, California juries ruled in favor of the employees in over two-thirds of such cases and granted an average award of $1.5 million. In some successful cases, the courts have created exceptions to the employment-at-will practice. Thus far, these exceptions have fallen into three

U.S. employers, such as the owners of this candy manufacturing plant, have the right to discharge employees at will for any reason under the common-law rule of employment at will.


broad categories: (1) breach of contract by the employer, (2) breach of an implied COVENANT of GOOD FAITH and fair dealing, and (3) violation of public policy by the employer. Employers and legislatures have responded in a variety of ways.

Breach of Contract

Approximately half of the states have allowed exceptions to employment at will on the basis of an express or implied promise by the employer. Typically, a wrongful discharge action alleging the breach of an employer's promise is based on a statement by the employer that expressly or implicitly promises employees a degree of job security. Ordinarily, such statements are found in employee handbooks or in policy memorandums given to employees when they are hired. Some courts have interpreted such statements as unilateral contracts in which the employer promises not to...

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