What HR manager hasn’t heard, “We’re an at-will employer, so why do I need documentation before I fire?” Good question, says today’s expert. After all, what is ambiguous about the at-will doctrine?
In most organizations, employees are “at will,” that is, they are hired for no specific time period, with no contractual relationship, and employment can be terminated by either party, for any or no reason, with or without notice, unless specifically prohibited by law.
It’s those last five words that cause vexation and that demand caution when terminating at-will employees, says expert Diana Gregory. Gregory is a senior human resources specialist at the Walnut Creek office of Administaff, a professional employer organization and human resources outsourcing firm.
Limitations to the At-Will Doctrine
Even though most employees are at will, employers must realize that there are many exceptions to this legal doctrine, says Gregory.
First, there are state and federal laws that protect employees against adverse job actions based on their protected status. Obviously, terminating an employee is considered an adverse action. In addition, U.S. courts have enhanced job security for “common-law” exceptions, such as public policy (e.g., whistleblowers and exercising legal rights) and implied contracts (e.g., handbooks, offer letters, and oral promises).
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Protected Status
If an employee charges that a termination decision was based on the employee’s protected status, such as race or religion, it falls to the employer to prove otherwise. That will require justification and documentation to back it up.
Protected categories differ from state to state but, for example, in California they include: race, ethnicity, color, national origin, religious creed, age, marital status, sex, gender, medical condition, physical or mental disability, sexual orientation, registered domestic partner status, and military status.
How many employees do you have that don’t fit one of those categories?
Public Policy
If an employee has exercised a legal right, such as filing a workers’ compensation claim, and is fired shortly thereafter, there is a high probability that the employee will claim that the termination was based on exercising that right. Courts have recognized enhanced job protection in such cases.
Similarly, terminating an employee immediately following (or during) a job-protected leave, such as leave under the Family and Medical Leave Act, would be highly risky and subject to challenge.
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Whistleblowers
Another category of workers protected by public policy is whistleblowers–employees who have reported illegal activity or activity they reasonably believe is illegal. That could range from financial irregularities to safety or pay issues.
Implied Contract
If your organization has an employee handbook, uses employment agreements or offer letters, or has somehow promulgated, in written or oral statements, language that appears to assure employees that their employment is for a certain period or will not be ended without a disciplinary process, your termination decision may be subject to challenge for not adhering to this “contract.”
For example, Taco Bell was required to show good cause for terminating an employee who had signed employment documents with at-will disclaimers. A jury found that language in relocation agreements modified the employee’s at-will status and implied that termination could occur only for good cause. The penalty? $800,OOO–Ouch!
If your handbook contains language regarding a disciplinary procedure, add a disclaimer stating that the company may, at its discretion, choose not to follow such a procedure, and that the procedure is not meant to modify any employee’s at-will status.
In tomorrow’s Advisor: In view of the myriad exceptions, should you still make use of the at-will language?