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This is a summary of an aspect of employment regulation in the United States and its territories. Employers should consult an attorney who specializes in labor and employment law about questions applicable to your specific industry. EMPLOYMENT-AT-WILL The courts once considered employment with no fixed duration as "terminable-at-will", -- an employer was free to terminate employment (with or without notice) and make other decisions affecting employment status for a good reason, a bad reason, or no reason at all. Under the "at-will" employment theory, employees are also free to terminate employment (with or without notice) with or without reason. In recent years, an employer's discretion to make employment status decisions has been limited by anti-discrimination laws and judicially-created contract and tort actions. Public Policy/Retaliatory Discharge Any employee who is discharged for some act that violates a clearly defined public policy (refusal to lie to protect the employer in a government inquiry or for reporting unlawful conduct of the employer) is protected by law. Employee Manuals/Handbooks Employee handbooks or manuals can create contractual rights. Employees can sue for breach of contract if the employer fails to follow the provisions of their own handbooks or manuals. Express Statements About Duration of Employment If a manager or other person in a position of authority makes oral or written promises to an employee regarding job security, the employer will usually be bound by that promise. Save your "at-will right" policy -- dump that "probation period" If your employee handbook or job-offer letters say new hires will face a 60- or 90-day "probation" period, you should consider dropping that policy, or at the very least, referring to that period as an "introductory" period. Reason: By setting up a probation period, you imply that once the probation period is over, the employee becomes "permanent" and earns some new level of job security. That misunderstanding could eliminate the employee’s at-will status. Never refer to "permanent employees" -- call them "regular employees" Nothing is permanent except taxes and Clorox bottles. Your goal: Make it as clear as possible that employees can be terminated at any time for any reason. Include in your handbooks, applications and offer letters a disclaimer that says all employees are "at-will" unless they have a written agreement signed by the company president. Even if you have an introductory period, make sure it says employees will remain at-will employees both during and after the introductory period. And consider referring to it in words that are less likely to imply a contract. Recent case: Dore signed a job-offer letter than characterized his employment as "at-will." The letter said that phrase meant the company had the right to fire him "at an time just as you have the right to terminate your employment at any time." The letter also provided for a 90-day probationary period. Two years later, the company fired Dore but gave no reason. Dore sued for breach of contract, claiming the letter obligated the company to fire him only for good cause. A federal appeals court sided with Dore, saying the company limited the meaning of at-will to termination "at any time," but not necessarily "for any reason." The court also said the presence of a "probation period" called into question whether Dore was entitled to be fired only for good cause. (Dore v. Arnold Worldwide Inc., Cal. Ct. App., 2004) Final tip: To avoid the same problem, make sure your organization’s at-will policy says employees can be terminated "at any time" and "for any reason." Sample Policy This should appear among the first 2 or 3 pages of your Employee Handbook. This policy should be reproduced on a separate sheet of company stationary and kept in a separate file (like the file where you keep "for-the-record" copies of I-9 forms). WE
ARE AN “AT-WILL” EMPLOYER (Company
name) follows the traditional, common-law theory of “employment-at-will”.
That theory is: an employee can quit any job at any time without giving their
employer a reason for their decision or any advance notice that they are
leaving; similarly, an employer can end the relationship without notice or
reason. This
Employee Handbook contains the policies, rules, practices, benefits and
guidelines of (Company name). We reserve the right to alter, amend, delete,
add or otherwise change any policy, rule, practice, benefit, or other element
of this handbook with or without notice. Nothing
in this handbook shall be construed to create a contract of employment, or to
promise or imply any employment contract, between (Company name) and any
employee, and it shall not create or imply any promise of employment for any
definite period of time. Only
the (Title) of (Company name) has
the authority to make any promise of employment for any definite period of
time. (Company
name) reserves the right to terminate the employment of any employee for any
cause, or for no cause at all. (Company name) acknowledges that all employees
shall have the right to terminate their employment with us without giving us
notice or cause. EQUAL
EMPLOYMENT OPPORTUNITY
We
are an Equal Opportunity Employer and we absolutely forbid all forms of discrimination.
This policy is fully explained to all newly hired employees and it will
be reviewed during periodic meetings all work groups. It is posted in
appropriate locations throughout our workplace. Any
employee may bring a complaint of unlawful discrimination to any
supervisor or other management-level employee at any time. It is not be
necessary to follow a specific “chain-of-command” to bring a complaint to
our chief executive. All
management employees are responsible for receiving and promptly,
confidentially report these complaints to top management. No retaliation will
be against any employee who complains about any form of discrimination. Behavior
that violates this policy will confidentially investigated by outside
professionals. In some circumstances, suspension of employment, pending
completion of our investigation may be required. All
employees are expected to give the investigation every measure of cooperation
and assistance. Non-employees
will be asked to leave our premises and appropriate action will be taken. In
some circumstances, suspension of employment, pending completion of our
investigation may be required. Violations of this policy will be dealt with
under our disciplinary system and termination of employment will be among the
options that will be considered. Total
adherence with this policy is a condition of employment Compliance with and
support for the enforcement of this policy will be reflected in periodic
performance ratings of all employees. 4 more things to keep out 1. Instructions to managers. The employee handbook is for all employees. If you have guidelines for managers on how to interpret company policies, put those in a separate manual. 2. Details on benefits. Never try to recap your entire Summary Plan Description (SPD) in the handbook, or else employees will rely on this version rather than the more detailed plan description. Simply refer employees to the SPD on file in the HR or personnel office. 3. Policies about leave. Don’t try to detail the morass of local, state and federal laws on various kinds of leave and who’s entitled to what. Reason: your policies and the laws can change so frequently. Simply state in your handbook that the company will comply with all applicable laws and then refer employee questions about leave to HR. 4. Details that change frequently. Don’t include details that are likely to go out of date, such as the cents-per-mile rate that employees are reimbursed for car travel. November, 2008 |