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Employment At-Will Basics

The general rule in the United States is that either the employee or the employer can terminate the employment relationship at any time, with or without notice and with or without cause. This is known as "employment-at-will."

Since the 1930's, judges and politicians have looked for ways to limit your ability to dismiss employees that do not work out. They have created three exceptions to the general employment-at-will rule (1) breach of a written, oral or implied contract, (2) failure to treat fairly and (3) violation of public policy.

1.  Express or Implied Contract. Courts look to brochures, employee manuals, job interviews, offer letters, performance evaluations and informal representations by managers and supervisors to determine whether there is a written, oral or implied contract. If the court finds such a contract, the employer often must show they had "just cause" for dismissing the employee.

The just cause standard is far more difficult for employers to meet than the employment-at-will standard. Most companies prefer to adopt preventative strategies that attempt to preserve at-will employment.

The general employment-at-will rule does not apply if you have written employment contracts or a union contract with your employees. Instead, either the terms of the agreement or the just cause standard will control.

2.  Fair Dealing. If the court finds an expressed or implied agreement, then the court may also impose an implied duty to treat the employee "fairly." This is an uncertain standard that can vary from jury to jury. For this and other reasons, many firms include disclaimers in employee manuals, for example, that the manual is not a contract.

3.  Public Policy. Finally, it is illegal to terminate any employee, including "at-will" employees, when the reason for discharge violates public policy.

A partial list of public policy mandates is set out below. Please remember this is only a partial list. It can vary between states and localities. Judges and politicians will undoubtedly continue to add additional mandates.

Federal, state and local laws do not allow employment decisions based upon the following:

•    Age (18+), Sex, Race, Color, National Origin, Religion, Marital Status or Disability
•    Sexual Preference (some cities & counties)
•    Work-Related Injury or Workers Compensation Claim
•    Pregnancy, Parental Leave or Family Leave
•    Jury Duty Service
•    Family Relationship to Past or Present Employees
•    Complaints or Actions by Two or More Employees Regarding Wages, Hours or Terms or Conditions of Employment
•    Expunged Juvenile Record
•    Athlete Participating in Event Recognized by the United States Olympic Committee (Oregon)
•    Military or Reserve Service
•    Veteran Status
•    Refusing Polygraph or Stress Test (Oregon)
•    Refusing Breathalizer Test Unless Reasonable Grounds to Believe Under the Influence of Alcohol
•    Reporting Possible Workplace Safety, Wage & Hour or Other Legal Violations
•    Pursuing a Legal Right Relating to Employment
•    Refusing to Participate in a Crime
•    Refusing to Sign a False & Defamatory Statement
•    Refusing to Submit to Sexual Harassment
•    Smoking Off the Job
•    Age, Sex, Race, Color, National Origin, Religion or Marital Status of Persons With Whom the Employee Associates
•    Federal Whistleblower Statutes

If you want to preserve your ability to replace employees that do not work out, you must continually protect your employment-at-will status.

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