We’ve been speaking about the issue of at-will employment and some of the exceptions to the general rule. Last time, we specifically spoke about limitations based on illegal discrimination, retaliation, and whistle-blowing activity. In addition to these protections, some states also recognize certain public policy exceptions to at-will employment, but these exceptions vary considerably.
Aside from these exceptions, states may also recognize limitations to at-will employment based on implied contracts, implied covenants of good faith and fair dealing, certain tort-based claims, and the equitable doctrine of promissory estoppel. As with the other exceptions to at-will employment, it is important for employers to have a solid understanding of the law and the limitations to the rule of at-will employment so they can implement business practices and policies which address liabilities in this area.
In addition to everything else we’ve spoken about, another possible way to limit at-will employment is to modify the rule by contract. Employers and employees may agree, for instance, that the employee has the right to contractual protections. This often happens with high-level employees, but it can also occur with collective bargaining agreements. Employers who choose to modify the at-will rule under a contract need to be very careful in drafting the language to ensure they have the ability to terminate the employment relationship in suitable circumstances.
Employers who wish to avoid all possibility of reading a modification of the rule into a contract can take certain steps to make it clear that there is no modification. This includes not only explicit contractual language, but also reinforcing the understanding in the hiring process, employee training, employee handbooks, performance reviews and so on.
Managing potential liabilities around the issue of at-will employment is not necessarily and easy matter, and employers can and should seek the advice and guidance of an experienced attorney to ensure they are able to protect their interests in this area.