2. Employment-at-will doctrine
• Nineteenth-century common law that
permitted employers to discipline or discharge
employees at their discretion.
• The right of an employer to fire an employee
without giving a reason and the right of an
employee to quit when he or she chooses.
3. Employers
Employers have the
right to hire, fire,
demote, or promote
as they choose, unless
there is a law or
contract to the
contrary.
Employees
Employees have the
right to quit and get
another job under the
same constraints.
4. Exceptions to the doctrine:
– 1. contractual relationship: a legal agreement exists defining how
employee issues are handled
– 2. statutory considerations: federal and/or state laws can create
exceptions
– 3. Public policy violation: Employees cannot be fired for disobeying an
illegal order from the employer
– 4. Implied employment contract: any promise or guarantee about job
security, verbal or written.
– 5. Breach of good faith: An employer breaches a promise or abuses
its managerial powers.
5. Contractual Relationship
• A contractual relationship exists when
employers and employees have a legal
agreement regarding how employee issues are
handled. Under such contractual
arrangements, discharge may occur only if it is
based on just cause.
6. Statutory Considerations
• Statutory Rights
• Rights based on specific laws and statutes passed by
federal, state, and local governments.
Most wrongful termination suits brought under
statutory causes of action use the federal anti-discrimination
statutes which prohibit firing or
refusing to hire an employee because of race, color,
religion, sex, national origin, age, or handicap status.
An organization cannot terminate an individual based
on his or her age just because such action would save the
company some money.
7. Public Policy Violation
• Under this exception, an employee cannot be
terminated for failing to obey an order from
an employer that can be construed as an
illegal activity.
• NC Courts have adopted a public policy exception to
the employment at will rule to allow Employees to
file suit for wrongful discharge if terminated by an
employer
8. Implied Employment Contract
• The fourth exception to the doctrine is the implied
employment contract. An implied contract is any
verbal or written statement made by members of
the organization that suggests organizational
guarantees or promises about continued
employment.
• These implied contracts, when they exist, typically
take place during employment interviews or are
included in an employee handbook.
9. Breach of Good Faith
• The final exception to the employment-at-will doctrine is
the breach of good faith. Although this is the most difficult
of the exceptions to prove, in some situations an employer
may breach a promise.
• In one noteworthy case, an individual employed more than
twenty-five years by the National Cash Register Company
(NCR) was terminated shortly after completing a major deal
with a customer. The employee claimed that he was fired to
eliminate NCR’s liability to pay him his sales commission.
The court ruled that this individual acted in good faith in
selling the company’s product and reasonably expected his
commission. Although NCR had an employment-at-will
arrangement with its employees, the court held that his
dismissal and NCR’s failure to pay commissions were
breaches of good faith.
