hartfordYears ago, I recall having a friendly conversation with another attorney in Connecticut where the topic turned to the notion of “At Will” employment.

When we couldn’t settle on an answer, we moved on to talking about whether the Hartford Whalers would ever come back.

I think we had a better answer for that question: Probably not.

But this is an employment law blog, not a sports one, so let’s get back to the topic.

Employment-at-will is, from a legal perspective, the notion that an employer may discharge an employee without restriction, that is, for any reason or no reason, without incurring any liability to the employee.

Simple enough, right?

Well, not quite. First off, Connecticut recognizes two major exceptions to this doctrine:

  1. The termination cannot violate an important public policy;
  2. The termination cannot breach an implied contract of employment if one as formed.

And, it should be noted, that there is the obvious exception that the termination cannot violate any other state or federal law — such as the laws prohibiting discrimination.

This again sounds simple enough, but in discussions with employers, there is another topic that comes up — fairness.  In other words, employers typically are wise the ask themselves whether a termination under the circumstances is “fair”.

Now that can mean a lot of things in a lot of situations.  For example, suppose an employer hires an employee, but 3 weeks later the employer loses a major contract and needs to layoff ten employees.  It may not be exactly “fair” to terminate this newly hired employee, but if the employer may be being “fair” by laying off newly hired employees first.

Sometimes, the “fairness” question is framed slightly differently.  Suppose you have a newly hired employee who is late to work a few times in the first 30 days and then shows up to work under the influence of alcohol.  Can you simply terminate the employee then?

Under most circumstances, yes, and most people would say this is fair because the employer is simply holding the employee accountable under its rules and a new employee shouldn’t get a lot of free passes.

But now suppose you have a 20 year employee who has an exemplary record of service.  The employee has no record of tardiness or misbehavior, but after a March Madness weekend, shows up at late to work with bloodshot eyes.  It should be noted, though, that a week before, the employee had complained to his boss that the machine he was working on seemed in need of repair.

Under the employment-at-will doctrine, the employers still has the same right to terminate the employee, but I think most people would think this situation ought to be looked at differently.  If the employer proceeds with the termination, it’s possible that it opens itself up to a threat of a claim.

Why? Because while the employment-at-will doctrine still applies, a judge or fact-finding would also then ask the same question — does this termination seem “fair”?

If the answer to that question is “no”, then judges and juries will look for alternative explanations.  Here, one could argue that it was the employee’s complaint that was the motivating factor in the termination and the employee was being retaliated against for complaining.  Otherwise, the termination seems a bit “unfair”.

That type of logic may not be “fair” either, but it goes to show that the employment at will doctrine should not simply be relied on in all circumstances.

I’ve yet to have an employer just say, “I didn’t have a reason for firing the employee. I just felt like it.” That may work under the “at will doctrine” but in the real world, it probably wouldn’t fly.

For employers, always try to look at your decisions through a neutral prism.  Or better yet, ask yourself: What would my neighbor think about this? If the termination seems unfair under those circumstances, it may be a clue to re-think your decision.

 

Photo Courtesy Library of Congress

On Twitter and Facebook, the concept of “Throwback Thursday” (or #tbt) has become quite popular.  Typically, it’s a picture from long ago that you’ve forgotten.The theory behind why its so popular is that there is still gold to be mined out of older things.

I was thinking about that concept lately when it comes to blogs and employment law. Overall, lawyers tend to write about the latest and greatest development as if it requires a wholesale reinvention of human resources. I’ve tried to provide some context over the years but I’ve also been trying to find a forum to provide additional perspective on certain issues.

So, with that in mind, from time to time, I’ll take a look back at some cases and issues that still have relevance today and give them that modern day “blog” makeover.

The case that immediately comes to mind is Torosyan v.  Boehringer Ingelheim Pharmaceuticals, Inc., which was decided just a few months before I started my career in employment law. It was the case I can remember being discussed in my employment law meetings when I first started work.

Background

According to the court’s decision, back in 1982, the plaintiff came to Connecticut at the defendant’s invitation and expense, for job interviews with five of the defendant’s employees. According to the court:

At several of the interviews, the plaintiff informed the defendant’s employees that he was seeking “long-term” employment, and that he did not want to move his family from California unless the defendant could guarantee him job security. In response, one interviewer told the plaintiff that if the plaintiff did a good job, the defendant would “take care” of him. Another interviewer told the plaintiff that he hoped that the plaintiff would stay forever and that the plaintiff would have the opportunity to examine the company’s employee manual to determine whether it provided the guarantees that he sought. ….

On August 31, 1982, the defendant wrote to the plaintiff, stating that “[t]his letter confirms our offer to you for employment as Biochemist III at an initial salary of $30,000 per year.” Although the letter from the defendant further represented that the defendant would provide the plaintiff with various fringe benefits, it did not state that the plaintiff’s employment would be terminable only for cause. The letter also did not state, however, that it contained all the terms of the plaintiff’s employment contract or that it superseded any prior or subsequent oral representations that might be made to the plaintiff. The plaintiff countersigned the letter without adding anything thereto and returned it to the defendant.

On his first day of work, Torosyan received the employee manual. The manual provided that the company could discharge employees for “cause.” Approximately two years later, the company distributed a new employee manual which no longer limited discharges to cause. The new manual included a disclaimer stating that the manual was for instructional purposes only, and also added a section stating that falsification of any company record could result in termination. One year later, Torosyan was fired for submitting a false expense report, and sued claiming breach of contract and defamation.

Continue Reading Throwback Thursday: Why Your Offer Letters and Employee Handbooks Have Disclaimers #tbt

The law is mightier than the pen?

Rather than tell you the result of a new Connecticut Supreme Court case first, let’s play along with the facts at home first.Here they are:

The plaintiff was hired as a laboratory manager by the defendant in February, 2006. On February 2, 2006, the plaintiff and [the defendant’s principal] signed a document that included the plaintiff’s rate of compensation, commission opportunities, benefits and work schedule. Thereafter, on April 6, 2006, the plaintiff and [the principal] signed a second document that revised the terms of the plaintiff’s employment, providing for a raise in her salary.

In February, 2007, the plaintiff provided [the principal] with a handwritten list of updated terms of her employment wherein she requested another raise. On March 1, 2007, the plaintiff and [defendant] signed a third document, stating ‘[t]his will cover the [thirty-six] month period starting April 1, 2007 and ending March 31, 2010.’ [The employer] terminated the plaintiff’s employment [with the defendant] on October 16, 2008, and [this] litigation followed.

You can view the entire agreement here.

So, here’s your test: The employee alleged that the contract was for a fixed term of employment and that the employer breached the contract.  Is the contract plain and unambiguous?

If you answered “yes”, that was the finding of a trial court and Connecticut Appellate Court with the above facts.  In fact, I posted on it in 2012.   (The legal system moves slowly.)

The Appellate Court held: “The plain language of the contract unambiguously demonstrates that the parties intended to create a contract for a definite duration of thirty-six months. It specifically provides how many personal days would be allocated to the plaintiff for the duration of the contract and provides that any increase in health insurance premium would be absorbed by the defendant ‘for the duration of the contract.’”

As a result, there is no need to look to external evidence of what the parties intended; the contract speaks for itself.

But if you answered no, you have found the winning argument — at least according to a new Connecticut Supreme Court decision (Cruz v. Visual Perceptions) that will be officially released next week.  The court concluded that it was ambiguous after all:

We conclude that the language of the letter agreement at issue in the present case reasonably may be interpreted as evincing either an intent to create a definite term of employment or an intent to set the terms and conditions of an at-will employment contract.

The result of such a conclusion? The court can look to “extrinsic evidence” to resolve this ambiguity and the case is sent back to the trial court for a determination.

For the lawyers out there, footnote 12 of the decision is worth a mention as well.  In it, the court takes pains to note that the status quo of employment agreements is that at-will employment is presumed but it can be overcome.  And because of that presumption, the language of the 36-month term does not change the contract, absent something more:

Although, as the dissenting justice points out, the presumption of at-will employment can be overcome either by an express provision in the employment contract that employment can be terminated only for cause or by an express provision that the employment contract is for a definite term, if either provision is ambiguous, the ambiguity must be resolved with extrinsic evidence.

For employers, though, the takeaways that I highlighted back in 2012 are worth a mention too.

First, and by far most importantly, this decision once again emphasizes the need to put, in any offer letter or written agreement, that the employment is “at-will” and can be terminated by either party without good cause.  Had that language been in the agreement at issue in the case, it would have been far easier for the employer to prevail.

Additionally, consider having an attorney review some of your agreements. I’m not advocating every piece of paper you create be reviewed by an attorney, but poor drafting can sometimes be avoided by having an attorney involved.  At the very least, if you have a form agreement or offer letter that you use, have outside counsel review that.

I was hoping that fellow blogger, Jon Hyman (of Ohio Employer’s Law Blog fame), and I would get to make another World Series bet. Unfortunately, his team (the Phillies) and mine (the Yankees) are both watching the World Series from some tropical poolside bar.

Employer Bill of Rights?

But it gives me an excuse to cite to a recent post by Jon in which he attempts to outline what an employer’s Bill of Rights would look like.

Among the rights he describes:

  • The Right to Hire on Qualifications and Fire on Performance: We want to be able to hire a white male under the age of 40 without fear of a lawsuit from every protected class we did not hire. We want to be able to fire without the fear of an expensive lawsuit when you fail to perform.
  • The Right to Criticize: Every performance review is not an attempt to push you out the door. Believe it or not, every employee we hire represents an investment by us. We want that investment to bear a substantial return. Criticism is meant be a constructive attempt to help you improve, not a destructive set-up for you to fail.
  • The Right to Control Operations: We know how many people we need to employ, how many shifts we need to run, and how many facilities we need to operate. Most importantly, we know what can afford to remain profitable. If we have to shutter or relocate a plant, lay people off, or furlough hours, it’s not because we are discriminating against you; it’s because it’s necessary for us to remain open and able to employ anyone at all.

On first blush, it certainly is provocative.  Why, after all, do companies need to have rights? (Something that the Occupy Wall Street group would certainly take issue with.)

But the point I think Jon is making is that despite all the rights that have been granted to employees over the years (FMLA, ADA, WARN, etc), employers still have things that they can do that should avoid judicial intervention.

I use the word “should” in the loosest sense because even a situation as simple as an employee quitting his or her job can turn into a legal proceeding over the eligibility for unemployment compensation or, worse yet, a hostile work environment “constructive discharge”.  The “rights” aren’t set in stone and unfortunately, that makes it difficult for employers to get some certainty in their employment decisions.

So, dear readers, what is Jon’s list missing? Or is the whole notion of an employer’s bill of rights too far-fetched?