EMPLOYMENT AT WILL: BEWARE OF EXCEPTIONS
All too often employers read or hear about a law or case in their favor and run to apply it to their circumstances without further review or research. In many situations, however, there are exceptions to the “black letter” law or a court’s decision. Such is the case with the doctrine of “employment at will”.
Case law holds that an employer may fire an employee for good reason, bad reason, or no reason at all under the employment at will doctrine. An employment relationship remains terminable at the will of either an employer or employee unless an agreement exists that provides otherwise. Many employers fail to consider this highlighted language when considering the employment status of their employees and under what circumstances employees can be terminated. Such employers mistakenly assume that their employees maintain an “at will” status, so they terminate them without cause, leaving themselves open to burdensome and sometimes successful litigation by those employees.
Probably the best known exception to the employment at will doctrine was confirmed by the New Jersey Supreme Court with respect to implied contracts. In Woolley v. Hoffman LaRoche
, 99 N.J. 288 (1985), dealing with the issue of an implied contract based upon an employment manual/handbook, the Supreme Court held that absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only “for cause” was enforceable against the employer even if the employment relationship was otherwise at will.
In addition to implied contracts, especially those in employee handbooks or manuals, exceptions to the employment at will doctrine and status for employees have been found in written contracts, oral contracts, and collective bargaining agreements. It is generally an issue of fact as to whether the employer, through the written or oral contract, promised to discharge the employee only for cause. It is axiomatic that the burden of proof of an exception is more difficult with alleged oral contracts.
Another New Jersey Supreme Court decision, Pierce v. Ortho Pharmaceutical Corp.
, 84 N.J. 58 (1980), created a public policy exception to the employment at will doctrine. That case held that an employee has a cause of action for wrongful discharge when the discharge is contrary to a “clear mandate of public policy.” The sources of public policy include legislation, administrative rules, regulations or decisions, and judicial decisions. More specifically, the New Jersey Law Against Discrimination, Title VII of the federal Civil Rights Act of 1964, New Jersey’s Conscientious Employee Protection Act, the federal Occupational Safety and Health Act, New Jersey Civil Service statutes, the New Jersey Constitution and even the Rules of Professional Conduct can all be potential sources of “clear mandates of public policy.”
Employers should not be too quick to discharge an employee without cause. Before doing that, it is essential to make sure that he employee is truly “at will” and that his or her status does not fall within one of the exceptions to at will employment.