Ready, Aim, Fire At-Will? Not Quite.
You probably know that 49 of the 50 U.S. states are at-will (all but Montana*). But the intricacies of at-will employment are more complicated than you may think. At-will does NOT mean you can fire people without concern for consequences or regard to the risks. At-will means that absent an employment contract or similar language indicating otherwise, employers generally may fire employees without notice, for any reason or no reason, as long as there is no unlawful reason.
Wrongful termination occurs when an employer fires an employee on grounds that can be construed as, or actually are, illegal. Illegal reasons for termination typically fall into two categories: An at-will employee alleges that they were fired because they are in a protected class, or because they participated in what is known as protected activity. Protected categories are determined by state and federal (and sometimes local) law, and depend on your number of employees. However, it’s important to remember that even where statutory protections don’t apply to small employers, other claims based on contract or public policy still can be brought. Finally, keep in mind that “alleged” can also mean, “Your word against theirs,” “Part of a made-up story where the facts fit the accuser’s narrative,” or “You actually fired them for an illegal reason.”
So, we have protected class and protected activity. Let’s look at each.
Here are examples of protected classes which may or may not be familiar to you:
- Color (yes, it’s different from race)
- Religion or creed
- National origin or ancestry
- Sex (a.k.a. gender)
- Physical or mental disability, or medical condition
- Veteran status
- Marital status
- Genetic predisposition
- Gender identity/sexual orientation
- Crime victim
Here are several examples of protected activity:
- Filing a worker’s compensation claim (valid or not)
- Lodging a wage or overtime complaint (valid or not)
- Reporting a safety or OSHA violation (valid or not)
- Complaining about working conditions to fellow employees or on social media
- Voting or political activity
- Being subpoenaed
Both of the above areas, class and activity, are broad in scope—so whether a termination is or is not unlawful is still open to interpretation by any intelligent attorney looking for a payout. It doesn’t take much to create the implication that the termination was based on some unlawful reason; sometimes it’s just about timing, or failure to document the real reasons for the termination in a timely manner. The ways in which employee complaints can be manipulated to make it look as if something you did was wrong, regardless of your intent, are endless.
Fortunately, there are ways to terminate employees safely and reduce the risk of a termination backfire. At CEDR, it is our job to help you address and hopefully resolve the issues that lead to conflict and claims, and avoid them altogether if possible. Sometimes, though, terminations can’t be avoided. In those cases, the steps we take together, to analyze the risks and properly document the legitimate reasons for employment action, form the best counter to an accusation of wrongdoing. Progressive corrective coaching that is written, acknowledged by the employee, and which explains the impact and need to improve, isn’t just an effective communication tool. This is documentation that can significantly reduce the risk of a claim when it comes time to terminate.
At-will status is presumed, but what you say or don’t say can ruin that.
The words you use in emails, in policies, and in conversations can be construed to mean a promise of future employment was made, which can supersede your at-will status. If the employee reasonably believed that when you said, “I will reassess you for a raise in one year,” that you meant they were guaranteed a job until then, then a contract was formed. Without at-will status, you generally need cause to terminate, and so a contract will almost always add liability and damages to any wrongful termination claim.
The best way to avoid contract claims where you intended to keep your at-will status intact is to include a strong at-will disclaimer in your handbook, as well as within any notices or letters to employees, especially any correspondence that discusses terms of employment, such as new hire letters or corrective action notices. Don’t use words like “probation” or “permanent employment,” as these are often judged to be at-will killers.
We leave you with this: Just because you are in an at-will state, that does not mean your at-will status is a bulletproof shield. Don’t let it lull you into a false sense of security.
Three things you can take away:
- Protecting your at-will status is crucial and requires you to be vigilant by documenting the lawful reasons for terminations.
- Just because an employment relationship is at-will doesn’t mean you can disregard protected activity or protected class.
- With the proper guidance and careful written and verbal communication, the risks of litigation due to an unlawful termination can be significantly reduced.
Need help? Members may call 866-414-6056 to speak with an advisor.
* By the way, even if you are in Montana, the one state that is only at-will during the first six months of employment, we still advise that you follow our guidance and create a record as to the cause for any termination.