In general terms, Employment-At-Will means that an employer, or an employee, may terminate employment at any time, for any reason (excluding exceptions), with or without cause, with or without notice.
As much as there are rights to terminating on the spot, doing so can call unwanted attention to an organization via challenges to the legality of its employment practices. It’s a known fact that law suits can cause financial and sometimes irreparable reputation damage to an organization, but, what is also costly, is the negative impact on the trust, morale and loyalty of the remaining employees. Therefore, the tangible and intangible costs for at-will terminations can be very damaging.
As HR business partners, it is our goal to arrive at win-win solutions for all parties involved by creating and implementing policies and practices that support excellent employee relations and engagement. For example, practicing progressive discipline encourage transparency and open communication between management and employees, and gives employees the opportunity to correct behavioral or performance concerns. Documenting performance or behavioral issues and applying progressive discipline fairly and consistently amount to the best practice and defense against unfair termination claims.
Exceptions to Employment-At-Will
Almost all states in the US, including New York, are known as at-will states. However, unknown to some employers, several states recognize exceptions to the employment-at-will doctrine. Lets’ examine these exceptions.
Public Policy exception negates the at-will doctrine when an employee, in the interest of the health or well-being of the public, reports an employer for violating state or federal law or public policy statute. For example, an employee who informs that a publicly traded employer is knowingly and willfully engaging in fraudulent dealings would be acting within his or her right and would be protected against retaliatory treatment by the employer, including termination, under the Sarbanes-Oxley Act, which protects whistleblowers.
Statutory exceptions such as Title VII of the Civil Rights Act or the Age Discrimination in Employment Act protect specific classes of employees from discriminatory employment practices, including termination. For example, an employer cannot terminate an employee who is over 40 years-old in favor of hiring a younger worker, then, try to justify its action under the employment-at-will clause. The employee would have a legitimate age discrimination case against such an employer.
Expressed Contract exception, such as labor bargaining agreements or other employment contracts ensure due process for employees.
Implied Contract exception or covenant of good faith and fair dealing exception means that an employee has a reasonable belief that his or her job was not at-will. For example, an employee might have been told by a manager during a performance evaluation that his or her job was secure. Therefore, the employee would reasonably believe that an implied contract was created. Employee handbooks that do not bear an employment-at-will statement could also inadvertently create an implied employment contract.
Some Best Practices to Consider
Establish Standards of Acceptable Behavior
Employers can avoid employment litigation through the establishment of and adherence to clear ethical standards of behavior, including anti-discrimination policies and practices. Yearly or more frequent reviews of these expected norms of behavior and providing avenues to eradicate conduct that is of the contrary will help to create an ethical culture and an organization where all employees feel valued. There should also be a zero tolerance policy for actions that are not in the interest of the public and employees.
Abide By the Terms of Employment Agreements
It goes without saying that where employment contracts exist, employers ought to follow the terms. Otherwise, an employer would be in breach of the agreement and exposed to litigation.
Communicate Employment-At-Will Policy
To prevent the creation of implied contracts, employers should add its employment-at-will policy to the employee handbooks, employment offer letters, performance reviews, relevant communications, or even excerpted policies. Importantly, to be compliant with NLRB findings, the at-will policy should not restrict the employees’ protected right to engage in concerted activities, as provided in Section 7 of the National Labor Relations Act. Including a statement in the policy to indicate that a specific party within the organization has the sole authority to form written, individual employment agreements will normally satisfy the NLRB’s concern about restrictions on non-unionized employees to organize and bargain the terms of their employment.
As your HR business partner, we will streamline your hiring and termination practices to ensure compliance and best practices to limit exposure. Call HR Factor, LLC today!