At-Will Employment—How Does It Apply to Your Business Today?

I recently mentioned to a colleague that I wished clients would call me before they fired the pregnant employee. No disrespect intended to pregnant ladies here (having been one myself—twice). However, one of my goals in life seems to be to get employers to understand that they can take certain actions when disciplining and discharging employees that can likely provide them with legal protections should the employee (pregnant or otherwise) determine to sue claiming that his or her termination was wrongful. But, understanding what those actions might be involves calling their lawyer before firing the employee. Calling afterwards to tell me that "I fired Jenna today for always missing her deadlines—by the way, she told me last week that she was pregnant and wanted to know what our maternity leave policy was, but I told her I had to get back to her about that," may be too late.

In trying to impress the "call me before" point upon clients, what do I hear? "She was employed at-will. I can fire her at any time, for any reason, can’t I?" "Well," I, the lawyer, try to calmly respond, ". . . maybe."

Most states in the U.S. still recognize the doctrine of "at will" employment—that employment that exists at the will of the employer and the employee. As long as both sides want the relationship to continue (as long as they "will" it), it will continue. When one no longer wants to be part of that relationship, the law allows the employee to quit at any time, and the employer to fire the employee at any time, for any reason, without cause or notice. At-will employees can be fired for a good reason, bad reason, or no reason at all . . . but not for a discriminatory reason.

"But, but," my client stammered, "Jenna was not fired for a discriminatory reason. She was fired because she could never meet a deadline." Perhaps—but she was also fired right after she advised you that she was pregnant, asked about maternity benefits, and you had yet to answer that question. In other words, employee discharges not only need to not be discriminatory, but they also can not appear to be discriminatory. What do you think Jenna is going to tell her state’s fair employment practices agency when she files a discriminatory discharge claim?

Here’s how it will work:

• Jenna: I was illegally fired because I was pregnant.
• Client: You are at will; I can fire you whenever I want.
• Court/Lawyer: Jenna claims she is fired for a discriminatory reason. Even if she is at will, you can not fire her for a discriminatory reason. You need a legitimate, business reason to counter her claim of discrimination. What’s your reason?
• Client: She missed deadlines.
• Court/Lawyer: OK. What is your proof of that?
• Client: (Will either present the proof . . . or will not have any proof because client failed to document and/or failed to take necessary counseling or other actions prior to the termination. The difference in being able to defend against such claims is often dependant on whether the client called their employment lawyer before terminating this employee’s employment.)

"So why do I have to be so careful not to destroy my employees’ at-will status if it doesn’t mean anything?" wails the client. "Because," I, the lawyer, sigh, "it does mean something." Here’s why:

Let’s say the client has proof of the missing deadlines; sufficiently shows the termination was not discriminatory; Jenna cannot show that her termination was motivated by her pregnancy; so the client wins the discriminatory discharge claim. But wait, claims Jenna, missing deadlines is not a good enough reason to fire an employee! Now what?

If Jenna is at-will and employer has done nothing to destroy the at-will relationship: Claim dismissed. Client does not need a "good enough" reason to fire Jenna. She’s at-will and could be fired for good reason, bad reason or no reason at all.

But what if Jenna is not at-will: The court could go on to determine whether the reason was "good enough," and whether Jenna should have been fired. It could determine that the reason was not good enough and that, even though the client won the discrimination claim, the client loses the wrongful termination claim and either needs to reinstate the employee or pay her monetary damages (or both). This result is not inconceivable. So, yes, being at-will matters.

The moral of the story is—employment lawyers can be useful before you get legal claims. Human Resource professionals and employment lawyers can work as a team to strengthen the company’s legal protections. Call your employment lawyer before terminating employees where there are potential risks of legal claims associated with the termination. The fact that the employee is at-will will not prevent that employee from asserting a discrimination claim, valid or otherwise. Companies need to be smart. Let your employment lawyer help you set up potential defenses against those employee claims which are becoming ever more prevalent in these interesting times.