At-Will Employment Act Exposed

The At-Will Employment Act is listed under ALEC's Commerce, Insurance, and Economic Development Task Force and was included in the 1996 ALEC Sourcebook of American State Legislation. There is no adoption or approval information available. ALEC has attempted to distance itself from this piece of legislation after the launch of ALECexposed.org in 2011, but it has done nothing to get it repealed in the states where it previously pushed for it to be made into law.

CMD's Bill Summary

This bill protects the right of employers to fire workers by weakening or eliminating common-law protections of worker's rights. Courts, for example, have found that firing an employee without following the procedures established in the employee handbook could be a breach of contract. Courts have also found that firing an employee in violation of "public policy" could amount to a wrongful discharge (i.e. an employee who is fired for reporting misconduct of the employer or a co-worker). This bill narrows or eliminates those protections.

ALEC Bill Text

Summary

Under traditional "at will" employment, either the employee or employer can terminate the employment relationship at any time for any reason or no reason at all. Many courts and legislatures have modified this traditional relationship, sometimes even requiring an employer to show good cause before being able to terminate the employment relationship. The At-Will Employment Act stipulates that employment relationships shall be "at-will," unless otherwise specified in an employment contract. The Act also restricts remedies available in the courts for discharged employees.

Model Legislation

Section 1. {Short Title.}

This Act shall be known as the At-Will Employment Act.

Section 2. {Legislative Declarations.}

This legislature finds and declares that:

(A) At-will employment is the traditional relationship between employer and employee that allows either party to abandon the relationship at any time in a manner not inconsistent with applicable state, local or federal laws.

(B) Some courts and law making bodies have weakened the at-will employment doctrine, making it more difficult for employers to justify discharging an employee. These bodies have often rely on amorphous terms such as "against public policy" or require a showing of "just cause" to justify discharging an employee.

(C) Litigation of improper discharge cases results in substantial expense to employers and creates disincentives for employers to expand business operations within the state.

(D) In light of the fundamental right to contract, an employer and employee should be free to contract on their own terms.

(E) Existing state, local, and federal laws provide adequate protections for employees, making modification of at-will employment unnecessary.

(F) Modifications of at-will employment often cause changes in an employer's hiring practices, hurting employees in the long run.

(G) As a result, it is against the public policy interests of this State/Commonwealth to weaken the concept of at-will employment. Courts should not create causes of action that are inconsistent with this stated public policy.

Section 3. {Definitions.}

(A) "At-will employment" means employment terminable at the will of the employer or the employee, without notice, at any time for any reason that is not prohibited by law.

(B) "Employer" means an individual, partnership, corporation, association, government entity, or other legal entity that has supervision and control over the labor of one or more employees.

(C) "Modification" means transformation of an at-will employment contract to any other form of employment contract.

Section 4. {Employment shall be at-will, unless otherwise stipulated.}

(A) Employment of an individual is at-will employment unless the individual and his or her employer are subject to a written contract specifying either of the following:

(1) That the individual is employed for a specific term.

(2) That the individual's employment may be terminated by the employer only for cause.

(B) Modification of an individual's at-will employment contract is effective only upon execution of a written agreement for modification of the contract, signed by the individual and either his or her employer or the authorized representative of his or her employer.

(C) An employee handbook shall not be construed to be an employment contract if the handbook has a conspicuously placed and clearly expressed contractual disclaimer.

Section 5. {Cause of Action.}

(A) An employee has a claim against an employer for termination of employment only if one or more of the following circumstances has occurred:

(1) The employer has terminated the employment relationship of an employee in breach of an employment contract as set forth in section 4, in which case the remedies for the breach are limited to the remedies for a breach of contract.

(2) The employer has terminated the employment relationship of an employee in violation of a state, local or federal statute. If the statute provides a remedy to an employee for a violation of the statute, the remedies provided to an employee for a violation of the statute are the exclusive remedies for the violation of the statute or the public policy arising out of the statute, including, but not limited to:

a. The Civil Rights Act.

b. The Occupational Health and Safety Act.

c. The Fair Labor Standards Act / Wage and Hour Act.

(3) The employer has terminated the employment relationship of an employee in retaliation for any of the following:

a. Refusal of the employee to commit any act in violation of state, local or federal law.

b. Exercising rights given to an employee under state, local or federal law.

c. The disclosure by the employee in a reasonable manner that the employee has information or a reasonable belief that the employer, or an employee of the employer, has violated, is violating or will violate a state, local or federal law to either the employer or a representative of the employer who the employee reasonably believes is in a managerial or supervisory position and has the authority to investigate the information provided by the employee and to take action to prevent further violations of the state, local or federal law.

Section 6. {Severability Clause.}

Section 7. {Repealer Clause.}

Section 8. {Effective Date.}

1996 Sourcebook of American State Legislation