Employment-at-will: Has the death knell officially sounded?

Employers in the U.S. have traditionally been able to terminate employees without notice or cause, but this established doctrine appears to be waning
By Peter Strelitz, Arturo Aviles and David Walter
|Canadian Employment Law Today

A change in termination doctrine

The notion that an employee without an employment contract was an “at-will employee” who could quit or be legally terminated for any reason became a popular one across the United States in the late 19th century. By 1908, the United States Supreme Court recognized the doctrine and it became a fixture of employment-related common law.

Over time legislators recognized employers and employees were clearly not on equal footing. Eventually, the Fair Labour Standards Act and the Civil Rights Act provided the groundwork for protecting employees from discriminatory work practices.

Courts also became more active in protecting employees. One approach entailed carving exceptions into common law at-will employment. The three most prevalent themes to emerge focused on “public policy,” implied contracts” and “good faith covenants.” These exceptions have taken root, to varying degrees, in U.S. case law and legislation. Many legal analysts now conclude the at-will employment doctrine has suffered significant erosion. Given the prominence of employee termination rights in Canadian employment law, it will be interesting to see the fate of this different perspective on termination in the United States.

Many states in the U.S. have seized on the public policy principle, which is the principle of the law that no subject can lawfully do anything harmful to the public or against “the public good,” to craft exceptions to the at-will doctrine, particularly with respect to employment termination. But, in this context, what exactly is “public policy?” The majority of states have based their definition of public policy on state constitutions, statutes and administrative rules. Some state courts have recognized exceptions not explicitly anchored to those sources, while others have applied narrow exceptions limited to statutes expressly declaring they are exeptions to the state’s employment-at-will doctrine.