At-will employment
[4] Over the 20th century, many states modified the rule by adding an increasing number of exceptions, or by changing the default expectations in the employment contract altogether.
In workplaces with a trade union recognized for purposes of collective bargaining, and in many public sector jobs, the normal standard for dismissal is that the employer must have a "just cause".
A fortiori, the employer may act peremptorily, arbitrarily, or inconsistently, without providing specific protections such as prior warning, fair procedures, objective evaluation, or preferential reassignment.
[8] However, the National Labor Relations Board has opposed as unlawful the practice of including in such disclaimers language declaring that the at-will nature of the employment cannot be changed without the written consent of senior management.
For instance, in 1870 in Massachusetts, Tatterson v. Suffolk Manufacturing Company[11] held that an employee's term of hiring dictated the default period of notice.
The at-will practice is typically traced to a treatise published by Horace Gray Wood in 1877, called Master and Servant.
"[15] Wood, however, misinterpreted two of the cases which in fact showed that in Massachusetts and Michigan, at least, the rule was that employees should have notice before dismissal according to the periods of their contract.
[17] Justice Edward T. Bartlett wrote that New York law now followed Wood's treatise, which meant that an employee who received $10,000, paid in a salary over a year, could be dismissed immediately.
Four years earlier, Adams v. Fitzpatrick (1891)[18] had held that New York law followed the general practice of requiring notice similar to pay periods.
[19] Some courts saw the rule as requiring the employee to prove an express contract for a definite term in order to maintain an action based on termination of the employment.
The WDEA is unique in that, although it purports to preserve the at-will concept in employment law, it also expressly enumerates the legal basis for a wrongful discharge action.
"[24] The doctrine of at-will employment can be overridden by an express contract or civil service statutes (in the case of government employees).
This includes retaliating against an employee for performing an action that complies with public policy (such as repeatedly warning that the employer is shipping defective airplane parts in violation of safety regulations promulgated pursuant to the Federal Aviation Act of 1958[26]), as well as refusing to perform an action that would violate public policy.
In the same 2000 decision mentioned above, the Supreme Court of California held that the length of an employee's long and successful service, standing alone, is not evidence in and of itself of an implied-in-fact contract not to terminate except for cause.
[7] Eleven US states have recognized a breach of an implied covenant of good faith and fair dealing as an exception to at-will employment.
Although all U.S. states have a number of statutory protections for employees, wrongful termination lawsuits brought under statutory causes of action typically 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.
Verkerke explained that "although everyone agrees that raising firing costs must necessarily deter both discharges and new hiring, predictions for all other variables depend heavily on the structure of the model and assumptions about crucial parameters.
For instance, Schmitz (2004) argues that employment protection laws can be welfare-enhancing when principal-agent relationships are plagued by asymmetric information.
