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A. “At Will” Employment
Employees contacting me about problems in their workplaces usually tell me that they are “at will” employees, because that is what their employers tell them.
This blog explains what it means to be an “at will” employee.
“At will” is a legal phrase that means the employer has the right to fire an employee at any time, for any reason, including a senseless, mean, spiteful, or arbitrary reason, as long as the reason is not unlawful. An “at will” employment can be ended at the will of either the employer or the employee. An employment contract that has no definite duration, and that has no limitation on the employer’s ability to fire the employee, is normally “at will.”
Most States outside the far West presume that employment is “at will” unless a contract or another policy or agreement says something different. A case decided by the highest court in the District of Columbia, Adams v. George W. Cochran & Co., 597 A.2d 28, 32 (D.C. 1991) available from https://www.courtlistener.com/opinion/1527710/adams-v-george-w-cochran-co-inc/?q=Adams+v.+George+W.+Cochran&order_by=score+desc&stat_Precedential=on, explained it this way:
It has long been settled in the District of Columbia that an employer may discharge an at-will employee at any time and for any reason, or for no reason at all.
The Maryland Court of Appeals is the highest court in Maryland, and explains “at-will” employment this way:
The common law rule, applicable in Maryland, is that an employment contract of indefinite duration, that is, at will, can be legally terminated at the pleasure of either party at any time. . . .
Adler v. American Standard Corp., 291 Md. 31, 35, 432 A.2d 464, 467 (Md. 1981), available from https://www.courtlistener.com/opinion/1463778/adler-v-american-standard-corp/.
Spacesaver Systems, Inc. v. Adam, 440 Md. 1, 11-12, 98 A.3d 264, 270-71 (Md. 2014), available from https://www.courtlistener.com/opinion/2721256/spacesaver-system-v-adam/, held that either a definite duration of an employment contract, or a provision saying that the employee can be fired only for cause, takes the contract out of the “at will” category. The court explained the “at will” doctrine more fully:
We begin by laying out the fundamentals of Maryland employment law. Our starting place is one of our most venerated common law precepts, the employment at-will doctrine. In McCullough Iron Company v. Carpenter, this Court announced that “[t]here can be no doubt that, in this country, the rule is, an indefinite hiring is prima facie a hiring at will.” 67 Md. 554, 557, 11 A. 176, 178 (1887). This Court has confirmed this principle repeatedly and unequivocally. See Porterfield v. Mascari II, Inc., 374 Md. 402, 421–22, 823 A.2d 590, 601 (2003) (“The employment at-will doctrine long has been part of the common law of Maryland.”); Adler v. Am. Standard Corp., 291 Md. 31, 35, 432 A.2d 464, 467 (1981) (“The common law rule, applicable in Maryland, is that an employment contract of indefinite duration, that is, at will, can be legally terminated at the pleasure of either party at any time.”); see also Stanley Mazaroff & Todd Horn, Maryland Employment Law § 3.02 (2d ed. 2014) (“Recognizing the continued vitality of the employment at will doctrine, Maryland courts have held that an employment relationship presumptively is at will unless the parties clearly and expressly set forth their agreement that the contract is to last for a specific period of time.”).
This common law doctrine reflects the courts’ concern with promoting freedom of contract and fundamental fairness. See Dwiggins, 324 Md. at 303, 596 A.2d at 1073 (“The [employment at-will] doctrine was born during a laissez-faire period in our country’s history, when personal freedom to contract or to engage in a business enterprise was considered to be of primary importance.”).
The Supreme Court of Virginia has announced a similar rule:
We have stated that “Virginia strongly adheres to the common law employment-at-will doctrine.” . . . In Virginia, an employment relationship is presumed to be at-will, which means that the employment term extends for an indefinite period and may be terminated by the employer or employee for any reason upon reasonable notice. In Miller v. SEVAMP, Inc., 234 Va. 462, 465, 362 S.E.2d 915, 917 (1987), we explained that:
“An employee is ordinarily at liberty to leave his employment for any reason or for no reason, upon giving reasonable notice, without incurring liability to his employer. Notions of fundamental fairness underlie the concept of mutuality which extends a corresponding freedom to the employer. . . .”
Lockhart v. Commonwealth Educ. Systems Corp., 247 Va. 98, 439 S.E.2d 328 (Va. 1994), available from https://www.courtlistener.com/opinion/1301911/lockhart-v-commonwealth-educ-systems-corp/.
Employees like to think they have protection in their employment because they have worked for a long time, or because they have always had good performance reviews, or because they have never been disciplined. If they are “at will,” however, they can still be fired at any time for any reason that is not unlawful.
Racial discrimination is an example of an unlawful reason. Others examples are discrimination because of sex, sexual harassment, sexual orientation (in some areas), color, national origin, religion, age, disability, union participation, union organization, “concerted activity” within the meaning of the National Labor Relations Act, whistleblowing, retaliation for engaging in a protected activity like opposing an unlawful practice or participating in the EEOC charge-filing process, retaliation for some employee public statements protected by the First Amendment, and the like. There are also narrow exceptions for public policy, such as firing an employee for refusal to violate a statute, as in Adams.
B. Loss of the Right to Good Faith and Fair Dealing
In addition to being subject to being fired at any time, there is another important consequence of being an “at will” employee. In pretty much all contracts outside of the employment context, both sides have the right to an implied promise of “good faith and fair dealing.” And they can enforce that right.
However, many courts have said that employment contracts are different: the promise of “good faith and fair dealing” does not apply to “at will” employees. In other words, employers do not have to treat “at will” employees with good faith, and do not have to deal with them fairly.
Three examples from local courts illustrate the bad consequences of this doctrine for employees.
In a D.C. case, Kerrigan v. Britches of Georgetowne, Inc., 705 A.2d 624 (D.C. 1997), available from https://www.courtlistener.com/opinion/2338713/kerrigan-v-britches-of-georgetowne/, Kerrigan worked as a district manager. His court complaint alleged that an internal complaint accused him of sexual harassment, that he was cleared by the internal investigation, that the HR manager was personally hostile to him and caused the investigation to be re-opened, that as a result false information was contained in the HR manager’s progress report to him, that Kerrigan asked to confront the witnesses providing the false information, that the HR manager refused to allow him to do so, and that Kerrigan was demoted to store manager as a result. Kerrigan sued, and among other things claimed he was not dealt with fairly. The D.C. Court of Appeals decided that he was an at-will employee and so did not have any right to fair treatment. It approved the statement of a Federal trial court as accurate: “‘District of Columbia law does not recognize a claim for breach of an implied covenant of good faith and fair dealing when brought by an at-will employee.’” Id. at 627.
In a Maryland case, Suburban Hospital, Inc. v. Dwiggins, 324 Md. 294, 596 A.2d 1069 (Md. 1991), available from https://www.courtlistener.com/opinion/2175497/suburban-hospital-inc-v-dwiggins/, Dwiggins was a building maintenance supervisor with ten years on the job. He apparently made mistakes on the job, and invoked the grievance committee procedure Suburban Hospital had established. He was not fired, but had to sign an agreement specifying that he would be fired if he violated any of the specific provisions of the agreement. A hospital official later complained that he had violated the terms of the agreement. He invoked the grievance committee procedure again, and the committee recommended that he be fired. He was fired and sued, claiming that the process was unfair. The Maryland Court of Appeals stated:
Although we have generally implied a covenant of fair dealing in negotiated contracts,1 there is no implied covenant of fair dealing with regard to termination by either side in an employment-at-will. The employer or employee may terminate “at-will” even though to do so might be unfair to the other. Any modifications to the employment relationship in the instant case were self-imposed by the employer and unilateral. The employees remained free to quit the employment at any moment for any reason, and no grievance procedure would be available to the employer. If an employer unilaterally adds specific limitations or conditions on the right to terminate at-will, those specific limitations or conditions should be enforced by the courts, but they should not be expanded by the courts. Specific modifications to the at-will relationship should not be an indication that the employer intends to go beyond the specific modifications and add an implied covenant of fair dealing to the at-will relationship.
324 Md. at 309-10, 596 A.2d at 1076-77. However, as noted above, Spacesaver Systems, Inc. v. Adam, 440 Md. 1, 11-12, 98 A.3d 264, 270-71 (Md. 2014), available from https://www.courtlistener.com/opinion/2721256/spacesaver-system-v-adam/, held that a provision saying that the employee can be fired only for cause takes the contract out of the “at will” category. This would then trigger the duty of good faith and fair dealing.
The Supreme Court of Virginia has recognized an implied covenant of good faith and fair dealing in contracts. See Levine v. Selective Ins. Co. of America, 250 Va. 282, 286, 462 S.E.2d 81, 84 (Va. 1995), available from https://www.courtlistener.com/opinion/1060256/levine-v-selective-ins-co-of-america/ (“Selective does not dispute the existence of this contractual obligation of good faith and fair dealing. Also, Selective does not dispute that it owes a duty of good faith and fair dealing to the plaintiffs as third-party beneficiaries.”). It has never addressed the applicability of this doctrine to at-will employees, but numerous trial-court decisions have held that the covenant does not apply to at-will employees. For example, Parker v. Family Services of Tidewater, Inc., 41 Va. Cir. 433, 1997 WL 33617009 (Cir.Ct., City of Norfolk, Feb. 25, 1997), stated at p. *1:
. . . The plaintiff is only claiming the defendant breached its duty of good faith and fair dealing. The Supreme Court of Virginia has never decided if such a duty exists in a contract of employment at will, but several reported Circuit Court decisions have held that it does not. Burton v. Central Fidelity Bank, 14 Va. Cir. 159 (1988); Schryer v. V.B.R., 25 Va. Cir. 464 (1991); Murray v. Cees of Virginia, Inc., 29 Va. Cir. 95 (1992); Spiller v. James River Corp., 32 Va. Cir. 300 (1993); Spencer v. Tultex Corp., 37 Va. Cir. 15 (1995). In Burton, supra, Judge Sweeney concluded such a duty would be inconsistent with termination at will. I agree. The demurrer to Count I will be sustained.
C. Who Benefits from “At Will” Employment?
Courts like to talk about the employee having the freedom to leave at any time, but the most important meaning of employment “at will” is that the employer may fire the employee at any time, for any reason—no matter how arbitrary, silly, nonsensical, or downright hostile—as long as it is not for an unlawful reason.
Employees do not normally get any advantages from an “at will” employment contract. Employees cannot be forced to work for the employer because the courts have held that that would be slavery, and the Thirteenth Amendment to the Constitution, passed shortly after the Civil War, abolished slavery and “involuntary servitude” except as a punishment for crime. Employees who have contracts of employment for a definite period cannot be forced to perform them, but can be sued for the damages caused by their quitting, if any. In most situations, there will not be any damages, so the only ones really protected by the “at will” doctrine are employers.
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Richard T. Seymour
Law Office of Richard T. Seymour, P.L.L.C.
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