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Employee Rights: Employment-At-Will Doctrine & Exceptions

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  • 0:01 Employment-At-Will Defined
  • 2:25 Contract Exception
  • 3:20 Implied Covenant Exception
  • 4:26 Public Policy Exception
  • 5:32 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Most employment relationships in the United States are subject to the employment-at-will doctrine. In this lesson, you'll learn about the employment-at-will doctrine and its exceptions. You'll also have the chance to take a short quiz.

Employment-At-Will Defined

Prudence has worked at a software development company as a junior programmer for a little over a year. She recently moved to a new department. About a week after joining the new department, Dick, her manager, walked into her cubicle and informed her that she was fired. Prudence was shocked and dismayed. She asked why. Dick told her that he just didn't like her and that he was letting her go. After being escorted out of the building by security, she called her friend, Janice, who works in human resources, to ask her to meet for lunch.

Prudence is still in disbelief when she meets Janice at the restaurant, but her disbelief is quickly turning into anger. She tells Janice that there was absolutely no legitimate reason for her termination and that Dick even told her the only reason she was being fired was his dislike of her personality.

Janice asked a few questions and tells Prudence that she agrees there didn't appear to be good cause to fire her. Feeling emboldened by Janice's opinion, she tells her friend that she's going to contact a lawyer and sue her employer for wrongful termination.

Janice asks Prudence if she had an employment contract with her employer either personally or through a union. Prudence informed her that she did not. Prudence sighs and tells her friend that she'll probably lose the lawsuit even if she can find an attorney that will take the case.

Prudence is astonished and asked how her employer can possibly be able to fire her for no good reason. Janice tells her friend that the employment-at-will doctrine is in effect and that her employer was in its legal rights to terminate her. Prudence can't believe it.

Janice explains that the employment-at-will doctrine is a common law doctrine that holds that any contract of employment without a defined end date for the employment relationship may be terminated by either the employer or employee for any reason. This doctrine is a double-edged sword, explains Janice. It allows employees to quit their jobs at any time for any reason, but it also allows employers to fire for most any reason as well.

The reason can even be a bad reason. Janice notes that pretty much every other industrialized country does not utilize the doctrine, but rather requires that employers show good cause before firing an employee.

Contract Exception

Janice explains that there are some limited exceptions to the employment-at-will doctrine. Prudence asks her to elaborate. The doctrine will not apply if the employment relationship is governed by a contract with a specific term of employment, such as a one-year term. Additionally, the doctrine will not apply if the contract provides that an employee cannot be terminated except for good cause.

This provision is common in collective bargaining agreements between a union and management. Janice also notes that sometimes provisions in an employee handbook will be construed as contractual and may prevent the application of the doctrine. A good example is a provision stating that employees will only be terminated for good cause. Prudence isn't protected by a written contract, so she asks about the other exceptions.

Implied Covenant Exception

Janice tells her that her best shot may be an implied covenant of good faith and fair dealing. Under this theory, a court may find wrongful termination if the employee can establish that her employer has indicated in different ways that she has job security and will be treated fairly. Basically, it means that the employer has implied that it will act fairly in regards to the employment relationship.

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