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Selected State Laws Concerning At-Will Employment

The vast majority of states recognize at least one exception to the employment at will doctrine. The most commonly accepted exception is the public policy exception; the only states that do not recognize this exception include Alabama, Florida, Georgia, Louisiana, Maine, New York, and Rhode Island. A few states have enacted piecemeal legislation related to at-will employment, though only Montana has enacted a comprehensive statute on the subject.

The following provides summaries of some selected state laws regarding application of the doctrine of at will employment and its exceptions:

ALABAMA: The Alabama Supreme Court has held that even where an employment contract has been made with reference to and subject to workers’ compensation laws, this did not restrict an employer’s right to terminate the contract at will. Several cases have reaffirmed the employment at will doctrine.

CALIFORNIA: The California Supreme Court has recognized that an employer who has violated a mandate of public policy may be liable under a contractin tort.

CONNECTICUT: The Connecticut Supreme Court in a 1980 case held that an at-will employee could recover for wrongful discharge after the employer fired the employee for insisting that the employer comply with the Food, Drug, and Cosmetics Act.

IDAHO: In 1996, the Idaho Supreme Court ruled that a teacher could recover for wrongful discharge after the state department of education fired her for missing work when she responded to a subpoena. According to the court, the firing violated public policy because failure to comply with a subpoena could be punished by contempt under a state statute.

INDIANA: Indiana courts have recognized that an employee may have a cause of action when an employer retaliates after an employee has exercised a statutorily-conferred right, an employee has refused to perform an unlawful act, or the employee has breached a statutorily-imposed duty.

IOWA: The Iowa Supreme Court recognizes two exceptions to the general rule of at-will employment. First, an employee may recover when a discharge violates a well-established and well-defined public policy. Second, an employee may recover when an employee handbook creates an implied contract.

KANSAS: The Kansas Supreme Court has recognized that an employee may recover for wrongful discharge where the employee is terminated for filing a workers’ compensation claim.

MASSACHUSETTS: The Supreme Judicial Court of Massachusetts has stated that an employee may be terminated at any time, for any reason, or for no reason at all.

MONTANA: Montana has enacted the Wrongful Discharge from Employment Act. In most instances, an employee may only be discharged for “good cause.” The statute defines good cause as reasonable job-related grounds for dismissal based on failure to satisfactorily perform job duties, disruption of employer’s operation, or other legitimate business reasons.

NEW HAMPSHIRE: The New Hampshire Supreme Court has held that termination of an at-will employment relationship that is motivated by bad faith or malice on the part of the employer is not in the best interest of the legal system and constitutes a breach of contract.

NEW JERSEY: The New Jersey Supreme Court has held that an employee may have a cause of action for wrongful discharge when the discharge is contrary to a clear mandate of public policy. Such a mandate may appear in the form of legislation; administrative rules, regulations, or decisions; or judicial decisions.

OHIO: Ohio courts recognize the tort of wrongful discharge in derogation of public policy. This tort has four elements, including the following: (1) the clarity element, which requires that a clear public policy existed and was manifest under state or federal law; (2) the jeopardy element, which requires that the dismissal of employees like those involved in the plaintiff’s dismissal would jeopardize public policy; (3) the causation element, under which a plaintiff must prove that the dismissal was motivated by conduct related to the public policy; and (4) the overriding justification element, where a plaintiff must prove that the employer lacked a legitimate business justification for the dismissal.

SOUTH DAKOTA: A South Dakota statute defines termination of employment at will as follows: “An employment having no specified term may be terminated at the will of either party on notice to the other, unless otherwise provided by statute.”

VERMONT: The Vermont Supreme Court has held that the dismissal of an at-will employee on the basis of age contravened public policy and established a cause of action under the public policy exception to at-will employment.

WISCONSIN: The Wisconsin Supreme Court held that an employee could recover under the public policy exception to at-will employment when the employer was terminated for refusing to drive a company truck after telling the company that he did not have a required license to operate the truck.

Inside Selected State Laws Concerning At-Will Employment