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Evolution of At-Will Employment

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Does At-Will Employment Mean an Employee Can be Fired for No Reason?

Generally no. While most employment contracts are at-will, in recent years courts have increasingly granted relief to employees who have been discharged without good cause. Thus, employers are often required by the court to provide sufficient proof of "good cause" for termination.

What Is Good Cause?

In general, courts have considered the following to be adequate good cause for termination:

  • Employee's inadequate or improper conduct
  • Changes in employer's economic and/or institutional goals

Failure to provide "good cause" for termination is often considered a breach of contract. If a court determines that an employee was terminated without sufficient good cause, any of the following damages may be awarded:

  • Reinstatement
  • Back pay
  • Restitution for Lost Benefits
  • Lump Sum Severance

How Can an Employer Substantiate "Good Cause" for Termination?

  1. Establish an Employee Manual: To help clarify their intentions and protect against litigation, companies often create employee manuals which specify termination policies and procedures. Generally, an effective manual must identify the company's intent to create specific discharge procedures and justifications, identify the actual policies, and indicate employee acceptance through explicit or implicit agreement. In most situations, employers can assume that continued employment is an indication of an employee's implied acceptance of the amended at-will terms.
  2. Outline a Termination Procedure: An employee manual should indicate the company's procedure for termination and specify when an employee's infraction will result in immediate suspension or termination. Companies often use a "progressive discipline" process that outlines a multi-step process of warnings and opportunities. Under such a process, a company will resort to suspension or termination only upon the employee's failure to improve performance despite multiple warnings.

 In most situations, by establishing and following a prescribed set of termination procedures, employers can provide some protection against wrongful termination claims.

Should You Hire an Attorney for At-Will Employment Issues?

While it is not complicated to establish a basic employee manual, an experienced employment attorney could provide important guidance to ensure that policies and procedures sufficiently provide protection for both employees and employers. If you are an employer or employee facing a claim for wrongful termination, you need to consult an employment attorney to learn what your rights and obligations are in the situation and to obtain the necessary court representation.

Photo of page author Kristen Johnson

, LegalMatch Legal Writer

Last Modified: 02-06-2015 02:43 PM PST

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