What is “at-will” employment?


“Employment at will” is the fundamental concept of employment law in New Jersey. Yet there is a surprising lack of understanding of this basic concept among both employers and employees. We know. We’ve heard it from both sides. From employers we hear, “she’s an at-will employee, so we can just fire her and not have to worry about any legal ramifications.” Well no, that’s not necessarily right. And from employees, we sometimes hear “I know I’m employed at will and can’t do anything about the fact that I’m being fired.” That’s not right either.

What is true is that the great majority of employees in New Jersey are employed at will. The only exceptions are when there is an employment contract for a specified period of time, an implied contract created by an employee handbook, or the employee is in a union covered by a collective bargaining agreement (another type of contract).

So what is “employment at will”? It means that either the employer or the employee is free to terminate the employment relationship at any time, for any reason, with or without cause. The ability to end the employment relationship is not unlimited, though, and the law contains important exceptions to the at-will doctrine.

The two common exceptions are state and federal laws which prohibit discrimination and retaliation. The more important in New Jersey is the Law Against Discrimination [LAD or NJLAD], a state statute which prohibits over two dozen separate kinds of discriminatory conduct. Examples of the better-known kinds of discrimination are race, gender, age, and disability. Detailed information about the LAD can be found here. [Link]

Less important in New Jersey, but still worthy of note, are federal laws that are similar to the LAD. These include Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and the Americans with Disabilities Act. Information on these laws is found here. [Link]

The most prominent difference between the federal and state discrimination laws lies in the remedies that they provide. Unlike the federal laws, the LAD has no cap on the amount of money damages that are recoverable by a plaintiff and provides for larger attorney’s fee recovery by successful plaintiffs.

Other exceptions to the at-will employment doctrine are the whistleblower laws. The New Jersey law is the Conscientious Employee Protection Act (CEPA), which prohibits an employer from retaliating against an employee who discloses, objects to, or refuses to participate in conduct that she reasonably believes to be illegal, fraudulent or in violation of public policy, or which affects public safety or patient care. As with the LAD, liberal damages and attorney’s fee remedies are available to successful plaintiffs. [Link to additional info re CEPA/Whistleblower]

What are the common warning signs that an employer may have acted in a discriminatory or retaliatory way? One is if you believe that your employer has given you a false or concocted reason for your termination. Another would be if other people are being treated in a way that is substantially different from you. The discrimination laws do not require that employers treat all employees exactly the same. They do prohibit employers from treating people differently on the basis of characteristics – for instance, race, sex, or age – that the law identifies as suspect classifications. If you think that this is happening, you should contact an attorney experienced in employment law as soon as possible. Likewise, if your employer has invented a reason for your termination that does not square with what you know to be the truth, it may be trying to cover up unlawful conduct.

Tipoffs can include minor violations of company polices, such as attendance or tardiness, that were not enforced until the employee complained about discrimination, harassment or illegal activities. Performance improvement plans (or “PIPs”) are often a sham designed to build a paper trail in an effort to cover up an unlawful termination. PIPs frequently involve niggling criticisms that are being flagged as performance deficiencies for the first time. It is not unusual for the performance requirements of the PIP to be all but impossible to complete successfully.

A reduction-in-force, where the employer claims that some business condition has forced it to lay off employees. These claims are often suspect, particularly when the “layoff” is limited just a few employees, or even just one. You also see RIFs that affect a greater number of older employees than younger.

And then there’s the “let’s force the employee out” gambit. In these situations, the employer chooses not to go forward with a termination. Instead, it tries to make the employee’s work environment and life so miserable that she leaves on her own. Often this involves cutting back on the employee’s job functions. These can be difficult cases. It is very difficult to establish a case for intentional infliction of emotional distress, as this requires horrid behavior by the employer. Sometimes, however, the employee can make out a claim for a “constructive discharge” if the workplace was so intolerable that any reasonable person subjected to the work environment would feel that she had no choice but to resign.