Employment-At-Will Doctrine: Labor Laws Term Paper

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Employment-at-Will Doctrine

A lot of controversy surrounds the question of whether California is still an at-will state given all the exceptions it has made to the doctrine over the last few decades. Simply stated, the employment-at-will doctrine is a Common Law concept that gives employers and employees the right to terminate an employment contract at any time, with or without just cause. This basically implies that an employer can fire an employee at any time, for any reason or no reason at all; in the same way, an employee can quit their job at any time without necessarily giving reasons for the same to the employer (Muhl, 2001). Four states, including Florida, Georgia, Louisiana, and Rhode Island subscribe to the at-will doctrine fully, with no exceptions; the rest of the states, however, make varying exceptions to the doctrine as a means of protecting the rights of employees. The doctrine, however, only applies to at-will employees -- those employees whose employment is not governed by a contract stating that they may only be fired for just cause or that their employment extends for a specific period of time. The subsequent sections explore the at-will employment doctrine in the State of California, and demonstrate how it could be applied in real-life situations.

California's At-Will Employment Doctrine

California is an at-will employment state (Governor's Office of Business and Economic Development, 2015). The state's labor code avows that any employment relationship not based on a specified duration is at-will employment, and as such, the employer or the employee may terminate the same at any time even without just cause (Governor's Office of Business and Economic Development, 2015). In a bid to shield employees from unfair and wrongful terminations, however, the state has instituted three core exceptions to the employment-at-will doctrine (Muhl, 2001):

The Public-Policy Exception: state law prohibits an employer from firing an employee for asserting their statutory rights as provided in a well-established, explicit public policy of the state (Muhl, 2001). An employer cannot, therefore, discharge an employee of their duties because they refused to perform an illegal activity at their request, because they joined a worker's union, or because they filed a compensation claim for damages suffered on the job (Muhl, 2001). Aggrieved employees can sue for damages on this basis as long as they can prove that the act that they refused to support (at the employer's request) goes against the public good (Muhl, 2001).

Breach of Contract: the 'breach of implied-contract' exception bars an employer from wrongfully discharging an employee when an implied contract regarding the relationship of the two parties exists, even if the same is not laid out in a written instrument or express agreement (Muhl, 2001). An implied contract is said to exist when the employer makes a statement or acts in a manner that implicitly or expressly promises an employee some degree of job security, such as when they make oral assurances of the same (Muhl, 2001).

The Covenant-of-Good Faith Exception: this exception prohibits employers from making termination decisions out of malice or in bad faith (Muhl, 2001). It recognizes that there is an aspect of fair dealing and good faith, by which both parties must abide, in any employment relationship (Muhl, 2001). An employee can sue if they can prove that the employer had indicated or implied through their actions that the employee would be treated fairly and granted job security (Muhl, 2001). Long-term employees who have received positive performance reviews and favorable evaluations can, for instance, argue their good performance and years of service were sufficient signs that as long as they performed satisfactorily, they would maintain their job (Muhl, 2001).

Application of the Law in Hypothetical Scenarios

Scenario 1: Anna's boss refused to sign her leave request for jury duty and now wants to fire her for being absent without permission

Well, assuming Anna is an at-will employee, the employer reserves the right to fire her at any time, with or without justifiable cause. In this case, however, Anna is protected by the public-policy exception to the at-will employment doctrine. One of the basic tenets of the public-policy exception is the concept of public good, pegged on the utilitarian theory of ethics. The utilitarian theory suggests that individuals make decisions based on the expected outcomes -- the most ethically sound choice, in this case, is that which benefits the greatest number of people. From a utilitarian perspective, it would be injurious to the public if Anna failed to attend to jury duty because then, she risked either placing the entire society at the hands of a dangerous criminal or condemning an innocent person to a punishment that they do not deserve.

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People's lives were dependent on her taking part in jury activity; for this reason, the employer could not legally fire her. If Anna is fired and sues, the organization could pay huge sums in damages for violating the public-policy exception. The most appropriate action in this case would be to advise Anna's boss on the potential consequences of his actions, and explain the possible costs of the same. The COO also needs to help the two devise better ways of dealing with such situations in future so that such misunderstandings are avoided.

Scenario 2: A department supervisor wants to fire his secretary for subordination. Your investigations, however, lead you to discover that it is because she has refused to prepare false expense reports for her boss

The secretary in this case is protected by the public-policy exception to the at-will employment doctrine. Falsification of financial documents is a crime under the California Forgery Law (Penal Code 470 PC). The public-policy exception bars employers from discharging employees for refusing to perform illegal acts at their request. Moreover, by refusing to sign false reports as requested by her boss, the secretary acted in the best interest of the greater organization as required by the utilitarian theory. Towards this end, it would be illegal for the supervisor to fire her. To limit liability, the COO could attempt to make the supervisor understand the potential consequences of their decision, and then they could instigate disciplinary action against them, especially if there is evidence that falsification has gone on for a while. A possible reason for incidences such as these in the organizational setting is the lack of a whistleblower policy -- the COO ought to institute one to ensure that employees have a private and reliable way of voicing out concerns of this kind. It would also be safe and convenient to move the secretary in question to a different branch or department as a way of easing the tension and ensuring that work flows effectively in the affected department.

Scenario 3: Joe, who was disciplined for criticizing a customer on his personal email on a company computer, has threatened to sue for privacy invasion

The at-will employment doctrine would apply in this case, implying that the COO could legally fire the employee without facing any legal liability. Joe's privacy invasion allegations are baseless -- the Federal Electronic Communications Privacy Act forbids eavesdropping on private communications made over the internet; however, it makes an exception for privately-owned internal email systems such as those used in organizational settings (Office of Justice Programs, 2013). Employees communicating over private systems such as these are not guaranteed rights of privacy. The fact that Joe used the company's system for his own personal communication, therefore, denies him any privacy rights. To prevent such occurrences in future, however, the COO should make it clear to employees that the system is the company's property, and that they should, therefore, not have any expectation of privacy when they use the same for private communication. For convenience purposes, the COO could have notices to this effect placed on the company's start-up screens.

Real-Life Application of the Doctrine (Lidow v. Superior Court, 2012)

Summary of Facts: In a 2012 case at the California Court of Appeal, Alexander Lidow (P) brought suit against his employer, California-based MNC, International Rectifier Corporation (IR), for what he termed as wrongful termination. Lidow had joined the company as a board member in 1994, before being promoted to assistant CEO in 1995, and finally to CEO in 1999. There, however, was no written agreement governing Lidow's employment at IR (Hameed, 2012). In 2007, the company's branch in Japan was accused of accounting irregularities, prompting the board of directors to hire external investigators to look into the allegations (Hameed, 2012). The investigators made use of coercive tactics, including lying to employees, intimidating them, and physically assaulting them to obtain information. Employees filed complaints and began to resign in large numbers. Lidow, then CEO, spoke out against the inhumane tactics that were being used by the investigators in Japan. He criticized the manner in which the investigators and the audit committee were handling the issue (Hameed, 2012). Thereafter, Lidow was summoned by the board, accused of taking part in the fraudulent accounting practices, and sent on compulsory leave, before finally being given….....

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