Monday, April 14, 2008

Protecting employment at-will

At-will employment is one of the hallmarks of American employment law. "Under the employment at will doctrine, either party to an employment relationship may terminate the employment at any time, with or without cause, for any legal reason or for no reason at all." Craddock v. Flood Co. One notable exception to this general rule are terminations that violate the discrimination laws. Others include terminations that breach express or implied contracts, or terminations that violate public policy. The touchstone of at-will employment is that an employer does not need just cause to terminate an employee.

In Colorado, labor unions are trying to change the rules. The Rocky Mountain News reports that a coalition backed by labor organizations is trying to get a constitutional amendment on the November ballot that would eliminate Colorado's at-will employment system and require just cause for all terminations. Under this "just cause" initiative, employers would be restricted from firing or suspending an employee unless the employer can prove incompetence, policy violations, willful misconduct, conviction of a crime involving "moral turpitude," employer bankruptcy, or economic circumstances that provide for layoffs of 10% of the workforce.

This measure is exactly the type that could gain popular support, and would alter the landscape of employer/employee relations in this country if it catches hold. It's not so much that it will restrict reasons for termination, although that would be a problem. Most businesses (or at least those that want to retain good employees) do not terminate arbitrarily, but only for a good reason. This law would put a premium on having well-defined employment policies on which employers could hang a "for cause" termination. The more troubling aspect of this proposal is that it places the burden on employers to prove just cause, as opposed to employees to prove that a termination was not justified. In the typical employment case, proving unlawfulness (such as discrimination) falls on the employee. If this law passes, terminations will be presumed unlawful unless the employer can prove otherwise. For the sake of businesses everywhere, let's hope that this proposal dies a quick legislative death, and does not catch on and begin to spread. [Hat tip: Point of Law]