EMPLOYMENT AT WILL
A common-law rule that an employment contract of indefinite duration can be terminated by either the employer or the employee at any time for any
reason; also known as terminable at will.
Traditionally, U.S. employers have possessed
the right to discharge their employees at will for
any reason, be it good or bad. The “at-will” cat-
egory encompasses all employees who are not
protected by express employment contracts that
state that they may be fired only for good cause.
“Good cause” requirements are typically a part
of collective bargaining agreements negotiated
by employee unions; nonunion workers rarely
have this form of protection. The at-will doc-
trine also does not apply to contracts for a spec-
ified term, such as an employment contract that
contemplates the employee providing service for
a expressly designated number of years.
The United States is the only major indus-
trial power that maintains a general employ-
ment-at-will rule. Canada, France, Germany,
Great Britain, Italy, Japan, and Sweden all have
statutory provisions that require employers to
show good cause before discharging employees.
Beginning in the 1980s, employment at will
came under challenge in the United States.
Employees had grown increasingly dissatisfied
with the rule for a variety of reasons. For one
thing, a decline in the number of self-employed
individuals—due, in part, to a continuing
decline in the number of farmers—meant that
most U.S. citizens worked for someone else. For
another, a typical worker who was discharged
currently lost more than in the past in terms of
PENSION, insurance, and other benefits.
As a result, a greater number of discharged
workers brought suits alleging WRONGFUL DIS-
CHARGE from employment. By the 1980s, as
concepts of job security expanded, employees
became increasingly successful in such suits. In
1987, California juries ruled in favor of the
employees in over two-thirds of such cases and
granted an average award of $1.5 million. In
some successful cases, the courts have created
exceptions to the employment-at-will practice.
Thus far, these exceptions have fallen into three
broad categories: (1) breach of contract by the
employer, (2) breach of an implied COVENANT
of GOOD FAITH and fair dealing, and (3) viola-
tion of public policy by the employer. Employers
and legislatures have responded in a variety of
ways.
Breach of Contract
Approximately half of the states have allowed
exceptions to employment at will on the basis of
an express or implied promise by the employer.
Typically, a wrongful discharge action alleging
the breach of an employer’s promise is based on
a statement by the employer that expressly or
implicitly promises employees a degree of job
security.Ordinarily, such statements are found in
employee handbooks or in policy memoran-
dums given to employees when they are hired.
Some courts have interpreted such statements as
unilateral contracts in which the employer
promises not to discharge the employees except
for JUST CAUSE and in accordance with certain
procedures (Duldulao v. Saint Mary of Nazareth
Hospital Center, 115 Ill. 2d 482, 106 Ill. Dec. 8,
505 N.E.2d 314 [Ill. 1987]). Courts were more
reluctant to find exceptions to the employment-
at-will practice in cases that involved an oral
promise of long-term employment.
Breach of an Implied Covenant of
Good Faith and Fair Dealing
In wrongful dismissal cases based on an
implied covenant of good faith and fair deal-
ing, the discharged employee typically con-
tends that the employer has indicated in
