Employment-at-will doctrine gets court’s backing

Great news for employers! Most employers today are aware and fully understand the meaning of “at will” employment. Although there are a few exceptions to the doctrine, employers do not need good cause to fire an employee. In all states in the United States except Montana, the law presumes that private sector employees are employed “at will”. Unless an employee can prove they are not an at will employee, chances are your “at will” employment practices will get the court’s backing as it did in this recent case with Wyndham. Karen Morris with Hotel Management Operations defines the case for us.

at will doctrine

 

 

The employment-at-will doctrine is well and alive. This is the rule that says both the employer and employee can terminate a job at any time for any reason.

Here’s an example of the doctrine at play. A GM of a Wyndham property in New York City was fired. He sued for breach of contract. The hotel company responded, “What contract?” It claimed the GM was an at-will employee and so no contractual obligation to continue his employment existed.

The GM had received two warning memos despite the GM’s claims of “excellent” reviews and significant improvements in the facility’s productivity, TripAdvisor rankings and financial results. The admonitions cited bullying, profanity, rudeness and aggressive and retaliatory behavior. Additionally, the GM was faulted for failing to follow basic accounting guidelines and for hiring an independent contractor without authorization.

The GM argued that the “totality of circumstances” established an implied contract that limited Wyndham’s ability to terminate him. He noted his 5.5 years with the company, his participation in Wyndham’s 401(k) and long-term incentive plans and his involvement in important Wyndham projects impacting the entire company. The court rejected this argument, refusing to find from these facts an implied agreement for continued employment.

The GM also argued that Wyndham’s employee handbook clipped the company’s ability to terminate him at will because it contained a “preference for a multistep disciplinary process.” He argued that this provision entitled him to a thorough, transparent investigation made in good faith. This argument also was rejected. The law does not require an investigation to end at-will employment. Further, held the court, when an employer opts to go beyond its legal obligation and undertakes an investigation, there is no duty to satisfy best practices or meet any other standard.

The GM next asserted that since the hotel had initiated a disciplinary process (the two notices), it had waived the at-will relationship. Not the law, said the court.

The judge’s written decision also cited a well-advised provision in Wyndham’s handbook that read, “Nothing in this policy is intended to alter the at-will nature of your employment with Wyndham.” Such an explicit disclaimer negates any protection from termination a worker might infer from other parts of the handbook.

The court was very clear in reaffirming the well-being of the at-will-employment doctrine. Either party—the employer or the employee—can terminate, with or without cause and without liability. Ideally, employers will treat employees fairly and in recognition of the importance a job plays in most people’s lives. Nonetheless, knowing the law can help inform your actions.

Note: Even in an employment at will, the employer cannot terminate workers for the sole reason that they belong to a protected class based on race, color, religion, disability, etc.

 

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