The employment at will doctrine often leads to harsh results. Employees often feel a strong need for security in their jobs, but the doctrine provides no such security since an employer can terminate an employee without any recourse in the law. Civil rights legislation enacted in the 1960s provided support for the idea that employers should not have unfettered rights to hiring and firing of employees. Discharged employees challenged the at-will doctrine in courts during the 1970s and 1980s and eventually experienced some success. Courts began to allow employees to recover damages in suits for wrongful discharge.
The major exceptions to the employment at will doctrine are as follows:
The most common exception prevents terminations for reasons that violate a state’s public policy. Another widely recognized exception prohibits terminations after an implied contract for employment has been created. An implied contract mat be found through employer representations of continued employment, in the form of either oral assurances or expectations created by employer handbooks, policies, or other written assurances. Finally, a minority of states has read an implied covenant of good faith and fair dealing into the employment relationship.
Under the public-policy exception to employment at will, an employee is wrongfully discharged when the termination is against an explicit, well-established public policy of the state. For example, in most states, an employer cannot terminate an employee for filing a workers’ compensation claim after being injured on the job, or for refusing to obey an employer’s orders to break the law.
The second major exception to the employment-at-will doctrine is applied when an implied contract is formed between an employer and employee, even though no express, written document regarding the employment relationship exists. Although employment is typically not governed by a contract, an employer may make oral or written representations to employees regarding job security or procedures that will be followed when adverse employment actions are taken.
The exception for a covenant of good faith and fair dealing represents the most radical departure from the traditional employment-at-will doctrine. Rather than prohibiting terminations based on public policy or an implied contract, this exception reads a covenant of good faith and fair dealing into every employment relationship.