What are the legal obligations regarding the terms of employment between an employer and employee?

The terms of an employment relationship will either be determined by the employment agreement between employer and employee or pursuant to the legal duties established under state law. All states in the US, except Montana, recognize the at-will employment doctrine. This doctrine allows for an employer to discharge or fire an employee for any non-discriminatory or retaliatory reason without cause or justification. Further an employee may resign from or quit her employment at any time without legal liability. This doctrine seeks to promote free movement of employment. Each state, however, recognizes limited exceptions to the principle of at-will employment. That is, these states either pass statutes or have common laws protecting the employee from discharge in certain situations.

What is the Public Policy Exception? 

Most states in the United States prohibit an employer from firing an employee if the reason for the action violates some readily accepted public policy. This prevents an employer from terminating an employee for exercising a legal right or failing to perform a legal act for the employer.

Example: Firing an employee for performing some public duty (showing up to jury duty), for exposing illegal conduct (such as reporting violation of some law to the employer or government agency), or exercising her rights as a US or state citizen (such as voting) are all against public policy.

What is the Implied Contract Exception (Good Cause Exception)?

Some states see the employer employee relationship as a contract that cannot be undone without specified or good cause. The terms of the contractual relationship consist of any representations or assurances made by the employer prior to or during the term of employment.

Example: If an employer provides an employee handbook to a new employee, the provisions in the handbook may be considered part of the contractual relationship. Often, these handbooks will outline a procedure for performance review, discipline, and discharge of the employee. An employer who fails to live up to these obligations prior to discharging an employee could be liable.

What is the Good-Faith and Fair-Dealing Exception?

Some states impose upon the employer a duty to exercise good faith and fair dealing with regard to all employees. This doctrine, to varying degrees, means that an employer must treat an employee fairly in the decision to fire her. This generally means that an employee violates these duties by firing an employee without due cause of justification.

As stated above, these doctrines exist to varying degrees in all states. A pure, at-will state will not recognize or recognize these principles to a lesser extent.

Related Topics

• Employment Law (Intro)
• Who is an employee under the employment law?
• Subcontracting
• What characterizes the employer-employee, At-Will relationship?
• What are the major employment laws?
• What are the taxation requirements imposed upon employers?
• What is the Fair Labor Standards Act (FLSA)?
• Exempt Employee 
• NonExempt Employees
• Family Medical Leave Act (FMLA)?
• Worker Adjustment and Retraining Act (WARN Act)?
• Occupational Safety and Health Act (OSHA)?
• Employee Retirement Income Security Act (ERISA)?
• Active Participant Status
• Defined Benefit Plan
• Pension Plan
• Accumulated Benefit Obligation
• Defined Contribution Plan
• Cash Balance Plan
• Pension Benefit Guaranty Corporation
• Blackout Period
• Benefit Allocation Method
• Multinational Pooling
• DB(k) Plan Definition
• Employee Contribution Plan
• Unit Benefit Plan
• Top Hat Plan
• Non-Discrimination Rule
• Alternative Minimum Cost Method
• Consolidated Omnibus Budget Reconciliation Act (COBRA)?
• Health Insurance Portability and Accountability Act (HIPAA)
• Workers Compensation Laws?
• Workers Compensation Coverage A Definition
• Workers Compensation Coverage B Definition
• Federal Unemployment Tax Act
• State Unemployment Tax Act
• Voluntary Termination
• Employment Verification Laws?
• Form I-9
• Workplace Privacy Laws?
• Background Checks
• Davis-Bacon Act
• Loudermill Rights
• Work Opportunity Tax Credit
• Work for Hire Agreement (Independent Contractor Agreement)
• Engagement Letter Definition
• Non-Compete Agreement
• Non-Solicitation Clause
• Wrongful Termination Claim
  
• What are labor laws?
• Organized Labor
• Collective Bargaining Agreement
• Labor Union
• What are the major labor laws?
• Department of Labor
• What is the National Labor Relations Act?
• Unfair Labor Practice
• Right to Work Laws
• Labor Management Relations Act
• Labor Management Reporting and Disclosure Act