Under the traditional employment at will doctrine, an employee who is not hired for a specific period can be fired at any time, for any reason, with some exceptions.
EXAMPLEAn employee cannot be fired for reporting that his employer’s paper mill is illegally polluting groundwater.
This doctrine has been much criticized: Nearly every state has employment at will (Montana is an exception), but there is a growing movement to abolish employment at will, as many other countries besides the United States have done.
Because employment at will operates widely in the U.S., the general consensus is that an employee may quit at any time for any reason and that, correspondingly, an employer may let an employee go for any reason, but, again, there are exceptions to this general rule.
In today’s business law environment, employers are subject to the risk of being sued for the tort of wrongful discharge of an employee. This type of lawsuit is based on claims by an employee that an employer violated some law (such as anti-discrimination laws), a contract of employment that protected the employee, or otherwise wrongfully terminated employment.
There are three main exceptions to the employment at will doctrine:
We will now look at each of them in a bit more depth.
The federal law of Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, and national origin. In addition, the Age Discrimination in Employment Act of 1967 (ADEA) prohibits discrimination in employment against individuals age 40 and over.
The Americans With Disabilities Act (ADA) prohibits employment discrimination against employees based on disability. The Vocational Rehabilitation Act of 1973 prohibits discrimination against federal employees and contractors based on disability. The Pregnancy Discrimination Act of 1973 prohibits employment discrimination based on pregnancy.
There are numerous additional federal laws that control actions of employers when it comes to uniformed officers, participants in certain benefit plans governed by ERISA (a federal law that governs pensions and employee benefits), the Consumer Protection Act (prohibiting firing an employee for a wage garnishment), the Jury System Improvement Act (prohibiting firing an employee for jury duty), the U.S. Bankruptcy Code (prohibits firing an employee for filing for bankruptcy protection), as well as many whistleblower laws that protect people who report violations of the law.
These laws are only a sample of the many federal laws that exist in addition to state and local laws that also protect employees from being fired for discriminatory or improper reasons.
2b. Existence of an Employment Contract
The existence of an expressed contract for employment, including but not limited to a union collective bargaining agreement, will most likely abrogate, or cancel out, employment at will.
Such a contract is binding on both the employer and the employee. In addition, an implied contract may exist if the employer, for instance, states during an interview that the employee is hired, the employee quits her current job based on this, but then the prospective employer withdraws the offer.
In such cases, a court may apply the theory that in every contract (expressed or implied) there is a covenant of good faith and fair dealing, and that if an employer did not exercise good faith, an employee’s wrongful termination lawsuit may go forward.
In other cases, an employee handbook has been construed to constitute a contract between an employer and an employee.
In Sowards v. Norbar, Inc., a company's handbook outlined progressive discipline steps the employer would take before terminating employment, and an employee denied progressive discipline was awarded damages for his termination.
Sowards v. Norbar, Inc., 78 Ohio App.3d 545 (1992).
2c. Public Policy
The public policy exception applies to actions an employer takes that are widely acknowledged as departures from acceptable norms of conduct, but perhaps not formally protected by statute.
EXAMPLEThis exception would likely apply to a company that fired an employee for filing a complaint for discrimination, or fired an employee for leaving a vehicle unlocked because the employee was attempting to save someone’s life in a nearby car accident.
Source: This content has been adapted from Lumen Learning's "Duties between Agent and Principal" tutorial.