What is At-Will Employment?

Most workers are considered employees at-will which means generally that they can be fired at any time and for any reason. The employment at-will doctrine evolved over many years and provides that an employer or employee can end the employment relationship with no legal recourse for the other party. In other words, neither has the right to insist that the employment relationship continue. This doctrine developed so that employers could control their own economic destiny and, to that end, pick employees who fit their subjective vision and objectives for the business. The doctrine also eliminates controversies over whether a verbal agreement about the length of employment exists. In Pennsylvania, all employment is presumed to be at-will.

Over the years, it has become axiomatic that most employees can leave employment at any time and for any reason. Other than the unwritten and otherwise unenforceable convention of providing an employer with two weeks’ notice, there are no restrictions on an employee’s nding the relationship. Giving advance notice of leaving is a courtesy aimed at reducing problems and complications regarding transition. 

If the employee has entered into a non-compete agreement or other restrictive covenants, he or she may be restricted from competing against the former employer in certain ways after that person starts new employment. However, those restrictions must generally be reasonable and calculated to prevent unfair competition. Knowing an employee is leaving to compete with your business is a good reason to consult with an attorney to determine if there are contractual or legal protections available. The departing employee would  also be wise to review those issues with a lawyer before accepting any new position that might violate a non-compete agreement or other legal restrictions.

With respect to an employer’s right to fire an employee, there have been a growing number of exceptions to the at-will doctrine. Where one of the exceptions applies, the employer may not fire the employee and if it does, could face paying damages. This is not necessarily unfair, but it does make the employer’s responsibilities more complicated. Generally, the at-will doctrine still provides that an employer may terminate the employment relationship for good reason, bad reason, or no reason at all and the employee has no legal recourse. So, if an employer simply doesn’t like the employee’s style, mannerisms, personality, or a single thing that may have been said or done, the employer can fire the employee without any legal recourse. That disparity in power really could put pressure on an employee and make the employee vulnerable to manipulation or unfair treatment for fear of losing his or her job. In reality, most employers are not looking to fire or mistreat workers as they have invested significant time and money into their continued productive involvement in that business. Nevertheless, there are a growing number of limitations to the at-will doctrine which might afford an employee some protection. An employer’s right to fire an employee may be limited by a written contract for a specific term, statutory protections like anti-discrimination laws, and certain public policy principles.

It is well established that the existence of a contract can take the employment relationship out of the application of the at-will doctrine. If an employer and employee enter into a written contract for a specified period of employment which provides it cannot be ended without specified reasons such as good cause, the employee may not be fired unless such good cause exists. Good cause is sometimes referred to as willful misconduct. This allows the employee to reasonably rely on the promise of employment for a certain period as long as the employee does not misbehave on the job. The reality is that very few employers offer such contracts for employment, and their use is typically limited to situations involving high-level executives.

Another type of employment contract which might prevent an employer from firing an employee is one that is implied. One example might be where an employee handbook states the terms or required basis for employees to be terminated so clearly that it forms the basis for an implied contract. Another would be where the employee has provided some truly extraordinary consideration at the time of accepting the employment position such as quitting an existing job and moving the entire family a significant distance to take the new job. In such a situation, it just makes sense that the employer should not be able to fire the employee without good cause after a few weeks or even months when the employee placed such reliance on the employment including incurring extraordinary inconvenience, costs and time.

While the at-will doctrine provides that an employer can fire an employee for even a “bad” reason, employers cannot fire an employee for a reason that the law deems to be improper or wrongful.  Thus, federal and state laws and regulations may also serve as exceptions to the at-will doctrine. Most of us are well aware of statutory restrictions which prevent employers from acting inappropriately when making workforce decisions. For example, there are many laws prohibiting discrimination, including firing an employee, based on race, color, religion, sex, national origin, age, and disability. While those are exceptions to the at-will doctrine, the remedy for an aggrieved employee is not an action for wrongful termination but rather an action for violation of the particular anti-discrimination statute.

Finally, there have been a growing number of exceptions to the at-will doctrine based on the public interest. That means that while there is no specific statutory or contractual prohibition from firing the employee under the given circumstances, the courts have determined that such a firing is against public policy. Those exceptions are still very few in number and are narrowly construed by the courts. Overall, the Pennsylvania courts have consistently announced that they do not wish to erode the long standing at-will doctrine. Notwithstanding, it seems that the courts find more and more public policy exceptions as cases are brought to test the waters.

A well-established exception is that an employee may not be fired for refusing to commit a crime. Other exceptions prevent firing for attending jury duty, in retaliation for filing a workers’ compensation claim, reporting an OSHA safety violation, and refusing to submit to a lie detector.

Both employer and employee must consider many things in deciding whether they have any recourse regarding the ending of an employment relationship. The employer is usually concerned with finding a new replacement and making sure the former employee is not competing against it unfairly. An employee, who can often be dramatically affected financially by the termination, has to determine if there is any basis for recourse to preserve the job or recover damages. While often there is none, there are a growing number of protections worth considering.

– Curt Ward


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