We are in the process of reworking all of our selection and hiring paperwork. I’m trying to insist on strong at-will language throughout, from application to offer letter to handbook. But our management is trying to improve retention and wants to brand the company as “a great place to work.” They think the at-will language contradicts that image they want to generate. So my question is, do you still recommend at-will language? What should I tell my bosses? — Jeffrey S., HR Manager in Oceanside
Your question goes to the heart of what some view as a conflict between at-will employment language and employers’ desire to cultivate employee loyalty and promote retention by generating a sense that employment will end only with good reason.
At-will provisions are widely viewed as protecting employers against wrongful termination claims. They do not, however, provide an absolute or complete defense to liability for wrongful termination. Employer statements or conduct that contradicts at-will language contained in employee handbooks and elsewhere can significantly chip away at a company’s at-will protections. In addition, at-will clauses offer no protection when a termination is found to have been motivated by an illegal motive, such as discrimination or retaliation.
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But at-will provisions also have an upside. They define the exact nature of employment and set appropriate expectations, making clear to prospective and current employees that employment may be terminated for reasons other than “good cause.” In that way, they underscore and enhance the employer’s flexibility when it comes to terminations. For that reason, at-will provisions judiciously placed in employee handbooks and employment contracts confer some protection against wrongful termination claims and are widely recommended from a purely legal standpoint.
That said, your managers seem to believe that emphasizing to employees in your employment letters, handbooks, and the like that their employment may be terminated “at any time, for any reason” would undercut the company’s goal of increasing employee morale and retention. Ultimately, you and your management will need to weigh the potential protections offered by at-will language against this perceived downside. I’d like to offer a few observations.
First, I’m disinclined to believe that at-will language would negatively affect employees’ or prospective employees’ perceptions of your company. Most seasoned employees have seen at-will language frequently in their careers and should understand that these clauses do not usually mean that a company wants to, or would, end someone’s employment arbitrarily and for no reason at all. That simply isn’t the reality.
Instead, your company’s attractiveness to prospective employees, and retention rates, are more likely shaped by myriad other factors, such as compensation, the type of positions offered, prospects for mentorship and advancement, and, most important, your company “culture”—particularly whether you, as an employer, are perceived as treating employees fairly and respectfully. These factors, I think, will influence morale and retention far more than the inclusion, or exclusion, of at-will language.
Second, you might consider how you present the at-will language. At-will provisions state that the employer may terminate employment at any time, for any reason, with or without cause. You can buffer this seemingly cold language by including in your handbook and other employment documents statements saying that you are excited to have the employee join the company, that you hope very much that you and the employee develop a mutually enjoyable employment relationship, and that you are open to feedback from the employee designed to make his or her experience better. In other words, you can include language that emphasizes the positive and underscores your efforts to treat employees with respect and fairness. Of course, as you go about emphasizing the positive, do not be tempted to make statements inconsistent with your at-will provision—such as assuring a certain length of employment—as these would undermine the protective effects of the at-will language.
You can also make the at-will provision sound more evenhanded by stating that the employee him- or herself may terminate employment at any time, for any reason, too.
Rebecca A. Speer, Esq., is founder and principal of Speer Associates/Workplace Counsel, a specialized employment law firm in San Francisco.