EMPLOYMENT-AT-WILL

 It has been a well-settled principle of common law in this country that an employee who is hired for an indefinite period of time without an employment contract is terminable at-will by the employer without restriction. One court has said that employers "may dismiss their employee’s at-will ...for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong." Under this rule, employees are correspondingly free to quit at any time and for any reason. Most states such as New York have established the at-will rule in judicial decisions. "It is still settled law in New York that absent an agreement establishing a fixed duration, an employment relationship is presumed to be a hiring at-will, terminable at any time by either party." Sabetay v. Sterling Drug, Inc., 69 N.Y. 2d 329,514 N.Y.S. 2d 209 (1987).

In contrast to employment-at-will, a contract of employment for a specified period ordinarily may be terminated only for "good cause" or "just cause." Even where there is a written contract for a definite time period, however, other contractual provisions might render the employment relationship terminable at-will. For example, in several cases, employers can terminate employment contracts at- will where they provide for a definite term, but also provide that either party could terminate the contract by giving notice to the other party.

It is estimated that 70% of American workers are subject to the at-will rule, as compared to approximately 15% who are union workers and 15% who are public employees. These groups of employees have historically enjoyed dissimilar levels of protection from wrongful dismissal. Those covered by collective bargaining agreements, employed in the public service, or working under written employment contracts for specific periods of time can usually be discharged only for cause. Until very recently, at-will private sector employees were not so fortunate. During the past couple of decades, however, many commentators have decried the harshness of the at-will rule, and have variously urged legislative reform or judicial activism as a means of limiting the unfettered discharge discretion ceded to employers by the rule. They have met with startling success. The traditional rule has begun to suffer exceptions at the hands of Congress and the state legislatures, as well as various state courts. So far, legislative initiative toward reform has been sparse, but state courts have not been as reluctant to take up the task of reshaping social policy in the area of job security.

The traditional rule making most employment at-will still applies to most cases, but its modifications and qualifications require careful consideration by employers of the circumstances surrounding terminations of all employees not covered by collective bargaining agreements. This is a relatively new and rapidly evolving area of the law, and few rules should be considered settled. Rather, when planning a discharge, employers should consider the current state of the law in their own and other jurisdictions and control the circumstances to maximize the possibility of avoiding liability for wrongful discharge. A state court's ruling against an employee on a particular issue does not mean that state law on that point or on related issues is settled. Courts frequently alter the common law rules concerning employment, often after looking at decisions from other states. Employers also should watch for statutory modifications of laws concerning discharge of employees.  

Special Protections Against Arbitrary Dismissal

 Remedial and other legislation. Although most non-union, non-contract private employees are subject to the traditional employment-at-will rule, many are protected, at least in part, from the rule's operation by express statutory restrictions on the employer's ability to fire. Federal and state laws have made inroads on the traditional rule in a variety of ways. For example, the various federal and state job discrimination statutes prohibit discharges based on such factors as race, color, religion, sex, national origin, age, handicap, status as a veteran, and jury duty .Other federal and/or state laws protect employees from being fired in retaliation for asserting their rights under wage and hour laws, having their wages garnished, engaging in union activities, opposing unlawful discriminatory practices, entering military service, refusing to take lie detector tests, filing for workers' compensation, serving on a jury, and "whistleblowing."

Judicial erosion of the at-will doctrine.

 In Weiner v. McGraw-Hill, 57 N. Y. 2d 458,457 N. Y .S. 2d 198 (1982), New York recognized a very narrow exception to the employment at-will rule. This exception currently requires plaintiffs to establish the following factors in order to bring a successful employment claim based on breach of contract:

The plaintiff must prove the existence of an express limitation on the employer's right to terminate at-will;

The plaintiff must establish that he or she was "induced" to leave other employment by assurances that they would not be terminated without cause;

The plaintiff must show the existence of a written promise of job security in an employment application or elsewhere; and

The plaintiff must show reliance on the employer's assurances of job security.

In recent years, a growing number of courts have recognized a variety of exceptions to the traditional employment-at-will rule. Basically, in New York, these exceptions fall into three broad categories.

Public Policy exceptions.

New York has recognized that at- will employees may assert claims challenging their discharge on the grounds the discharge violated a public policy, but thus far only where the public policy is expressly embodied in a statute or a constitutional provision. Unlike courts in other states, New York has declined to adopt an exception based on a general concept of public policy.

Whistle Blower exception.

New York has enacted a law (Labor Law Section 740) that prohibits a private employer from taking retaliatory action against an employee who discloses to a supervisor or appropriate authority that the employer is in violation of a "law, rule or regulation" that "presents a substantial and specific danger" to the public health or safety. The term "law, rule or regulation" has been interpreted to include civil statutes, administrative regulations as well as traditional criminal laws.

Employees seeking the protection of Section 740 must specify which statute, rule or regulation is being violated by their employer. An assumption or opinion by an employee that a violation has occurred or the mere possibility that an employer's conduct has breached a law or regulation, is not a sufficient basis for invoking the statute's protection. The statute applies where:

1) The employee threatens to disclose or discloses to a supervisor or public body that an activity, policy or practice of the employer is in violation of a law, rule or regulation;

2) The employee provides information to or testifies before a public body investigating a violation of a law, rule or regulation by the employer; or

3) The employee objects to or refuses to participate in any activity, policy or practice in violation of a law, rule or regulation.

Labor Law Section 740 offers only a limited protection to private employees because of the difficult burden of establishing that the conduct or activity complained of is creating a danger to the public health or safety. Activity that only threatens an individual's health or safety will not provide the basis for bringing a cause of action under the section. One court has observed that ''as is apparent from the plain words of the statute, not every disclosure or threat of disclosure by an employee of a practice in violation of a law, rule or regulation is protected by Labor Law Section 740." (Remba v. Federation Employment and Guidance Service, 545 N.Y.S. 2d 140 (1st Dept.1989), affd 559 N. Y.S. 2d 961 (1990).

Common law tort exceptions.

Employees subject to the employment-at-will rule have frequently asserted traditional tort claims, as opposed to contract claims, in challenging the fact of their dismissals or particular employer conduct connected with the termination. For example, in states recognizing a so-called "prima facie tort" for the commission of an otherwise lawful act when done for a malicious motive, employees have attempted to assert a "malicious discharge" cause of action. Discharged at-will employees have also brought claims for wrongful discharge, intentional infliction of emotional distress, interference with contractual relations, fraud, and invasion of privacy, among others.

Although employees have advanced a great many theories to restrict the employer's unfettered right of termination, and while suits arising from these theories have recently met with greater success than in the past, it must be emphasized that in the larger number of cases in which courts have actually decided the merits of wrongful termination charges, the employer's right to discharge has been upheld, either because the court refused to recognize the employee's cause of action or because the employee failed to prove his case. Although, this is a developing area of the law in which the courts have demonstrated an increasing receptiveness to the newt11eories, the New York courts have refused to allow a cause of action in tort (or civil wrong) to address wrongful discharges. Murphy v. American Home Products, Inc., 58 N.Y. 2d 293,461 N.Y.S. 2d 232 (1983); De Petris v. Union Settlement Associates, 86 N. Y. 2d 406,633 N. Y.S. 2d 274 (1995).

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