Chapter I

Employment-At-Will

 

Most people will spend a significant portion of their lives working. It is estimated that there are nearly 140 million people working in the United States today. In Rhode Island workers fill more than 484,000 non-farm jobs. While work relationships are defined by a myriad of federal and state laws - some of which apply to some workers and some of which apply to all workers - any analysis of employment law must begin with the doctrine of employment-at-will . Employment-at-will has a fairly long history in the United States, dating back to the 1800's. Perhaps more important is the fact that it is the presumed employer-employee relationship in the United States absent any evidence of any other form of employment relationship.

 

What is employment-at-will ?

 

Employment-at-will is a common law (judge-made law) doctrine that defines the employer-employee relationship. It permits the employer wide latitude in deciding how he or she will conduct business, including whom he or she will employ and for how long. With respect to discharges, the employment-at-will doctrine provides for the termination of employment by either the employer or the employee at any time and for almost any reason. At-will employment is contrasted with employment governed by a contract for a definite term or employment covered by a collective bargaining agreement.

 

Is an employer required to explain why an at-will employee is being terminated?

 

No. Employers terminating an at-will employee are not obligated to give any reasons for the termination. Employment-at-will was typically understood to mean that an employer did not have to give any reason for firing an employee and was permitted to do so for "good reason, bad reason, or no reason at all." Indeed, Rhode Island courts have long held that "a contract to render personal services to another for an indefinite term is terminable at the will of either party at any time for any reason or no reason at all." Roy v. Woonsocket Inst. For Savings , 525 A.2d 915 (R.I. 1987).

 

Often, at-will employees assume - having heard the term just cause - that an employer must have a good reason for terminating an employee and demonstrate that reason before terminating the employee. That is not the case. Just cause is a creation of contract - typically collective bargaining agreements - with a specific meaning that has developed over a period of years primarily in the unionized setting. See discussion of just cause on page 44.

 

A fuller explanation of the employment-at-will doctrine must take into account changes in the law. Perhaps better stated is that an employer is permitted to terminate an at-will employee for "good reason, bad reason, or no reason at all, but not an illegal reason ." This definition recognizes those limits (such as illegal discrimination, whistleblower protections, etc.) imposed by the law. These topics are discussed in subsequent chapters.

 

Do at-will employees have any protections?

 

Yes, but most of these protections derive from restrictions imposed by statutes. For instance:

 

•  Federal and state discrimination laws prohibit discharging employees because of race, color, gender, creed, or national origin, or because an employee is older. Rhode Island law extends this protection to stop discrimination based on sexual orientation and gender identity or expression.

•  Federal and state disability laws make it illegal for employers to discharge workers with disabilities in most instances simply because of their disability.

•  OSHA laws prohibit retaliation against employees who file safety complaints.

•  The Whistleblower statute prohibits retaliation against employees who report employer violations of various laws.

•  Federal and state labor relations acts prohibit discharging employees engaged in certain concerted activities in order to improve their terms or conditions of employment.

 

This is not meant to suggest that employees in an at-will situation are immune from an employer's unlawful acts. Some employers will intentionally violate the law and take their chances in court, assuming that the employee even has the time and the resources to bring suit. Some employers may unwittingly violate the law. But the laws mentioned above do provide an employee with some protection and provide a mechanism for relief when terminated unlawfully.

 

It is also possible that the ­ at-will employee may find that some of his or her rights will not be adjudicated in court, but will be decided through arbitration. This depends on whether the employee agreed to arbitrate work-related claims - perhaps by signing an employment application when commencing employment which contains an agreement to arbitrate employment-related disputes. See Circuit City Stores Inc., v. Adams , 532 U.S. 105 (2001).

 

Apart from the statutory restrictions, do employees-at-will have any other protections?

 

Employees who believe that their terminations were unlawful have brought suit using several theories. (Cases sited from other jurisdictions are intended to provide illustrations of certain theories mentioned in the text and are not binding on Rhode Island courts.) In Rhode Island, plaintiffs have met with limited success. The theories include:

 

•  Covenant of Good Faith ;

•  Implied Contract Theory ;

•  Wrongful Discharge Based On Public Policy ; and

•  Tortious Interference With Contractual Relationship .

 

What does the Covenant of Good Faith mean?

 

The critical issue in suits based on a violation of the Covenant of Good Faith is employer honesty and whether the employer sought to avoid certain obligations due the employee - such as a firing motivated by the employer's desire to avoid paying a sales commission to an employee. Fortune v. National Cash Register Co. , 364 N.E.2d 1251 (MA. 1977) Where courts have rejected the doctrine it has been because it was viewed as an attempt to place a just cause requirement on the employment relationship. The Rhode Island Supreme Court has yet to embrace this theory.

 

What does an Implied Contract Theory mean?

 

The Implied Contract Theory generally involves employee handbooks or personnel policies and the contention that the handbook (or policy, practice, memo, etc.) created a contractual right which the employer violated when terminating the employee. In short, this theory holds that a contract can be inferred from the conduct of the parties.

 

The Rhode Island Supreme Court has indicated that a plaintiff relying on this theory will bear the burden of demonstrating that the employer's policies, practices, procedures, or employee memoranda "give rise to a reasonable belief that [the employee] was anything other than an at-will employee." A mere belief on the part of the employee and nothing more will be insufficient to establish an implied contract. DelSignore v. Providence Journal , 691 A.2d 1050 (R.I. 1997). The Court has also held that an employer had no contractual obligation to provide severance benefits outlined in the employee handbook to a terminated employee where the handbook expressly stated that it was not intended to be a contract and reserved to the employer the right to unilaterally change benefits. D'Oliveira v. Rare Hospitality International, Inc. , 840 A.2d 538 (R.I. 2004)

 

What does a Wrongful Discharge Based On Public Policy mean?

 

An employee, who claims that his or her termination amounted to a Wrongful Discharge Based on Public Policy , g enerally alleges that he or she was terminated for having exercised a right or duty created under a statute. Courts typically have required that the public policy upon which the terminated employee relies be express and explicit. So, for example, a termination because an employee missed work because she served on jury duty or because he was away on National Guard duty would likely constitute a wrongful discharge based on a clear public policy.

 

In the relatively few instances where the Rhode Island Supreme Court has considered this issue it has read the public policy exception narrowly.

 

What does Tortious Interference With a Contractual Relationship mean?

 

Tortious Interference With a Contractual Relationship speaks to conduct on the part of a third party which induces one party to break a valid contract it has entered into with another party. The elements of the tort include:

 

•  the existence of a business relationship or an expectancy,

•  knowledge by the interferor of the relationship or expectancy,

•  an intentional act of interference,

•  proof that the interference caused the harm sustained, and

•  damages to the plaintiff.

 

Legal malice, that is, a malice that evidences an intent to do harm without justification - though not necessarily spite or ill will - is required. O nce the plaintiff establishes these elements the burden shifts to the defendant to prove that there was sufficient justification for his or her interference. Toste Farm Corp. v. Hadbury, Inc. , 798 A.2d 901 (R.I. 2002)

 

Example: A is employed at-will by B . The relationship is good and A has received good evaluations and regular raises. C has a personal grudge against A 's father. C brings this grudge to B 's attention, and suggests to B that A - who has nothing whatsoever to do with the grudge - may be disloyal to B . C encourages B to terminate A 's employment and B does so.

 

Rhode Island courts recognize this tort and have concluded that an employee's at-will status "would not and could not permit a third party . . . to interfere with an existing employment relationship, which but for [the interference], may have gone on indefinitely." D'Andrea v. Calcagni , 723 A.2d 276, 278 (R.I. 1999)

 

What does employment-at-will mean with respect to workplace rules?

 

As it pertains to private businesses and where there is no contract or collective bargaining agreement defining the work relationship, employers can establish almost any workplace rules they choose, unless restricted by other law. Many of these laws limiting an employer's discretion (i.e., FLSA, OHSA, FEPA, Title VII, etc.) are discussed in subsequent chapters.

 

Lawful employer rules can range from establishing employee dress codes and absenteeism policies to the regulation of certain on-the-job conduct (such as smoking). And while some employers may try to regulate off-the-job conduct, generally they have had less success with such efforts.

 

 

 

 

 

A Guide to Rhode Island Employment Law
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