II. Employment At Will

• Jurisdiction: New York

II. Employment at Will

In the absence of statutory, contractual, civil service or constitutional protections, an employee with an indefinite term of employment in New York is subject to the common law at-will doctrine.³ Under the doctrine, an employee can be terminated for any reason or no reason so long as the adverse action is not unlawfully motivated, in contravention of statutory or constitutional rights, in violation of the terms of a collective bargaining agreement or a written individual employment contract. The common law doctrine also permits an employee to voluntarily terminate his or her employment relationship. The justification for the at-will doctrine arose out of the contractual principle known as mutuality of obligation.⁴ This principle requires that each party to a contract be equally bound by its terms; thus, both the employer and the employee must be free to terminate an employment relationship, with or without cause.⁵

In the modern age, an enforceable employment contract may be created or extended through an exchange of emails.⁶

While the common law in other jurisdictions has evolved away from the at-will doctrine, the New York Court of Appeals has rejected repeated efforts to eliminate or substantially modify the doctrine that it adopted in the late 19th century. The Court of Appeals has repeatedly reaffirmed the viability of the 19th century doctrine in Horn v. New York Times.⁷

It is challenging to plead a tort or breach of contract claim for a terminated at-will employee that can survive a motion to dismiss. The Court of Appeals has held that an at-will employee does not have a right to bring a cause of action for tortious discharge against his employer.⁸ Similarly, the Court has rejected an attempt to challenge the discharge of an at-will employee based on claims of intentional infliction of emotional distress, prima facie tort or breach of contract.⁹ The Court, however, has held that a complaint stated a breach of contract cause of action when it alleged that an employee handbook stated that discharge would not take place without "just and sufficient cause," the employment application referred to the handbook, and the employee left his prior job in reliance on this promise.¹⁰ In 1992, the Court of Appeals recognized another exception to the doctrine involving the termination of an associate from a law firm in retaliation for the associate's request that the firm report the ethical misconduct of another associate.¹¹ However, in Horn v. New York Times,¹² the Court refused to extend this exception to a claim of a breach of implied contractual terms based on medical ethics.

Subsequent cases have continued to narrowly interpret exceptions to the at-will doctrine, leaving the common law rule largely intact except as modified by statutory or constitutional restrictions.¹³ For example, in Smalley v. Dreyfus Corp.,¹⁴ the Court of Appeals concluded that an amended complaint by five terminated at-will employees failed to state a cause of action when it alleged that they were fraudulently induced by and detrimentally relied upon the employer's misrepresentations about rumors of a possible merger, resulting in the employees continuing their employment. The Court reasoned that the amended complaint failed to allege an injury separate and distinct from their at-will termination. In Sullivan v. Harnisch,¹⁵ the Court held that an at-will hedge fund compliance officer failed to state a cause of action for wrongful discharge after he was fired for complaining about allegedly improper stock trades that benefited the hedge fund owner and members of his family. The Court reasoned that while compliance with federal security regulation is integral to the securities business, that regulatory scheme is an...