Understanding Employment At-Will
June 17, 2015
In an “at-will” employment relationship, either party (the employee or the employer) is free to end the relationship at any time and does not need a special reason, such as misconduct or economic necessity, to do it. Essentially, at-will relationships continue for so long as both parties want the relationship continue, and end when either party wants the relationship to end. To illustrate, an at-will employee can decide to quit his or her job whenever he or she chooses for any reason. Likewise, an employer is free to lay-off or fire an at-will employee for any reason which is not illegal.
In Pennsylvania, certain groups of employees are not at-will:
- Employees with express contracts of employment which make them other than at-will;
- Employees enjoying the benefits of collective bargaining agreements which protect employees against termination without “cause” (i.e. union employees);
- Employees who have implied contracts which make them not at-will; and
- Certain groups of public employees are not at-will by statute, such as employees who are hired under a civil service statute.
Express contracts, collective bargaining agreements, and implied contracts
Express contracts/collective bargaining agreements: Express contracts are obvious employment contracts. When an employment contract is for a fixed term of time (e.g. six months), the employee has a contractually enforceable right to employment for the full term unless the employee breaches the contract in a way that gives the employer a right to cut it short. Alternately, an express contract may be for an indefinite term or a renewable term and say that the employer can terminate only for “cause.” Cause may be left as an indefinite term, or might be defined in the contract. Collective bargaining agreements are a type of express contract, between the employer and the union, under which (in most union contracts) the employees can only be terminated if the employer can show just cause. Express contracts for other than at-will status can be oral or written, but the terms of written contracts are easier to prove if there is a dispute. If you are considering an employment relationship that is based on an oral or written contract, it may be prudent for both the employee and the employer to consult with an employment attorney before the relationship is finalized.
Implied contracts: Implied contracts are less obvious. In rare cases, employee handbooks may be written in such a way that a court may determine that a reasonable person would interpret the handbook as binding the employer to an employment relationship which is not at-will. Employers should review their employee handbooks with an employment attorney to make sure their true intent is reflected. Sometimes, the pattern of hiring can create an implied contract for a relationship which is not at-will. For example, if an employer recruits an employee who gives up a secure job and moves to take a job with the employer, a court might infer that the intention of the parties was that the employee not be at-will for a reasonable time.