VANNOY:

What is at-will employment? Hi, I’m Mike Vannoy, vice President of Marketing at Asure. And today we’re gonna unpack this, this topic. I, I think a lot of people have heard the term at-will employment, and I think they understand maybe the basics. That means you can, you can fire someone without reason. Someone can quit without giving you notice. But I think there’s a lot more legally to it. And so my guest today Brian Shenker is, is gonna help me unpack this topic cuz I think there’s a lot of, a lot of nuance here that people really do need to understand. Brian if you’re watch the show regularly, you’ll, you’ll recognize Brian. He’s from, like I said, from the, the law firm New York law firm o Jackson Lewis. He prac his practice focuses on representing employers in a wide range of workplace matters, as well as preventative advice and counseling. Brian has extensive experience defending class and collective action lawsuits under federal and state law, law, state wage and hour laws. He has successfully defended wage and hour audits conducted by the US and New York State Departments of Labor. And Brian regularly handles cases before courts and administrative agencies involving claims of discrimination, sexual harassment and retaliation. Welcome to the show, Brian.

SHENKER:

Sure. Hi Mike. Thanks for having me. And yeah, great topic today. Cause I think this is really, you know, the basis of, you know, everything we do, what does that will employment, the exceptions? And you know, it, it, it really paints a broad stroke across a lot of different areas.

VANNOY:

So, let, let’s just jump right, right from the top. I think I, I think a lot of people have heard of it, don’t probably really understand the depth of it, but there’s, I I think there’s a lot of people, small business owners, you know, they’re busy running their, running their shop, trying to grow their business. They don’t even know what the term means. So let’s just start with a definition. What is at-will employment?

SHENKER:

Right. So at Will employment, it’s a signature feature of employment law in the us. And the doctrine of at will employment basically creates a rebuttable presumption that either party in the employment relationship, the employer or the employee can terminate the relationship at any time for any reason, for any lawful reason with or without prior notice. So, you know, in short, it really means employment’s for an indefinite period of time, and it can be terminated by the employer or the employee. Much of what we’ll get to into today are the exceptions to the rule. And that really goes to, you know, lawful reasons for terminating

VANNOY:

Brian

SHENKER:

And what might be unlawful.

VANNOY:

Give some context before we start talking about exceptions. I guess, what, what’s the purpose? Cause so, so many people might be, and I, and I’ll maybe try to talk about the extremes and one, one end of the extreme, you might say, people are have a much more libertarian mindset that would say, well, of course people can leave whenever they want. Of course, I can fire someone if I, if I want to. How is this even an issue? Why is this a law other end of the spectrum? You know, some countries much more of an employment for life kind of mentality, where it’s highly regulated that you know, act, act of act of God to fire someone because you really, when you agree to employ someone, you’re really agreeing to take care of that person for their career, essentially. So what, where, how did this law come to pass? What specific law is it? When did it come about? Give us the context of this thing.

SHENKER:

Sure, sure. So basically, you know, employment at will gives businesses, lets them be the most nimble and kind of, you know, efficient in terms of, you know, in terms of making, you know, termination decisions, right? So in, at Will employment, you know, an employer for, you know, might have no good reason or a very good reason, and it can make decisions, it can terminate employees, hire employees compare that to a different scenario where you know, and this was something we saw a lot, you know, post World War ii, right? When unions were, you know, gathering steam, you know, in a stronghold in corporate America. And so kind of the contrast to show you right, the unions, in addition to, you know, promising better wages and benefits, one of the things that they promised was job security, right? So, union positions are one of these exceptions to at will employment because the employer must follow some procedure, some set of rules, and there’s some appeals process for when it wants to terminate someone.

So that, that, that show, you know, that gives us it shows us the divide. Whereas, you know, there are rules, procedures in place. Whereas if you have none of that and you’re, you just have an employee you know, it’s at will, so you can terminate them whether it’s within or outside the probationary period. And typically there, there’s no problem with that un unless, right, unless there’s some law or public policy that says you can’t terminate someone in that area. But generally what we’re talking about is the freedom to, you know, act as the employer, you know, chooses and, you know, in, in making employment decisions.

VANNOY:

All right? So that’s, that’s, that’s a good definition. Why is this so important for employers to know? You know, I’m I’m the, I’m the small business owner. I’ve got 15, 20 employees. I’m growing, I’m grinding, I’m serving my, serving my customers. Why, why is this something I should care about?

SHENKER:

Right? So, great question. And look, there are some of the more well-known exceptions to at-will employment, right? So we wanna know once we have an employee, you know, what we can do with them and how we can do it. So you know, one of the main exceptions, exceptions that most employers should know about are, you know, anti-discrimination statutes. So when we say you can employ, you know, terminate someone for any, you know reason, as long as it’s lawful, right? So you can’t terminate someone because they have a disability, right? That would violate, you know, federal law. And so, you know, that that’s what we’re talking about. You know, the other exceptions besides, you know, anti-discrimination statutes, you know, some are judicially recognized. It means, you know, the courts have, you know, made law that says there’s certain circumstances where you can’t terminate someone.

 Those involve some public policies prohibiting discharge in certain circumstances. And then there’s some other, you know, more implied contracts, right? So we mentioned before that you could have a contract with employee, right? That means they’re no longer at will now, their employment’s governed by the terms of that contract. So now, you know, if you want to terminate that individual, we have to look through the contract. You know, are, does the contract limit the circumstances? Do they have to engage in certain behavior? Is there a certain time that needs to, you know, a no period that needs to be given? You know, so there are all these things that you can you know, get out of the at will arena, so to speak. But the most important part is that as the employer, knowing where you stand so one of the trickier areas we’ll get to today are these, you know, implied contracts, right?

Right. Most employers should know whether they have an express contract, right? You know, if you’ve signed an agreement with your employee. But you know, as we’ll get to implied contracts can be created by the, the company’s conduct things that managers say, documents that are given out to employees, and then an employer might unknowingly be, you know, taking itself out of employment at will and requiring certain, you know, circumstances in order or certain you know, practices to it might need to follow before it makes a termination decision. So, you know, we’ll get through those. So, you know, it’s not always so easy, right? And when, when clients come to me and they say, well, you know, I’m, let’s say we’re in New York. Is New York at will? Yes. All right, so I can do anything. I can fire anyone at any time. We, so that’s part of it to some extent. Yes. but we also need to be aware of, you know, the exceptions to the rule. That’s where employers can get tripped up on. That’s where, you know wrongful termination claims can arise.

VANNOY:

All right? So, just to be clear, purpose of this show is to share the best information possible with employers to grow productive teams in a world of a, a labor shortage, which we truly are facing right now. Whether you face it, your individual business today or not the economy is facing a labor shortage. It’s not just a big business thing, it’s, it’s, it’s hit main street. So we’re not advocating for ways how to, how to cleanly and inhumanely fire people. I think it’s obvious most businesses are trying to get more people. So that’s, that’s not even an, not even an issue. We are just trying to, to, to, to get, share the best information. But Brian, in that context, is it, is it fair to say the two places that employers get in the most trouble is either A, they’re unaware of an exempt exemption, right? Or B their behavior, they think they’ve got this W2 at will relationship and their behavior has led them down a path where there might be actually be some gray area that a court might side in favor of the employee, that no, this is really a contract relationship, and there is no such thing as that. Will you need to honor the, the, the, the agreements, even if not in contractual written form governed is, am I summarizing that right?

SHENKER:

Yeah, I, I think those are, yeah. Certainly the two areas that you’re gonna see the most issues arise in this. And, you know, I think, you know, we might be getting ahead of it, but a lot of it comes back to something that you and I, you know, preach almost religiously on the show, is that, you know, documentation, right? You know, documenting employment decisions and discipline. Because you know, what we’ll see as we go through all of this is that, you know, good employment practices are still needed even if there’s at-will employment, right? That I think, you know, some employers when they read about this, if they don’t, you know, go through all the way, or they, they stop listening right now, and they, they, they don’t listen to the rest. They, they might think, well, you know, at-will employment’s just, you know, that that’s a license to do whatever I want.

 But, you know, not, not so much. There are still very good reasons to, you know, document discipline, document employee issues and, you know, do all those things that we say, you know, from, you know, the hiring point up through, you know, the time they’re with the company up through termination, that set up, you know, the, the separation that set up the termination in the correct way. Because there can still be liability, right? Whether it’s an implied contract, whether it’s someone with who has a union employee, and there’s a collective bargaining agreement, or, you know, firing someone who may have a retaliation claim. You know, there are, you know, even in you know at will states that these issues arise.

VANNOY:

Yeah. I, I wanna actually spend a little more time there before we go into the, into the big buckets of what implies contract. And then ultimately, what are the exemptions that every employer needs to understand? I, you hit one of ’em. That, that I think is the most, one of the most common, if not the most common retaliation. So you’re at, you’re, you’re in work. You, your business isn’t at will state. You legally can terminate for whatever reason you choose. That doesn’t mean that employees can’t get hurt feelings and frustrated and angry and feel jerked around and either lawyer up or call to their local department of labor or whatever that governing agency is, and all of a sudden you’ve got a very expensive, time consuming, distracting situation on your hands. Can you kind of put, put into buckets beyond retaliation? What are the most common buckets that in, in, in, and boy, just like our last conversation, I think documentation to record keeping is like so key to everything, right? But talk, take us through what those buckets are first, and we can talk about maybe some of the remediating best practices to avoid those. Then we’ll get back to kind of the meat of more specific rules of at will employment,

SHENKER:

Right? So you, you know what I, I I think you hit the nail on the head, you know, retaliation obviously that goes hand in hand with the other, you know, civil rights statutes and you know, anti-discrimination measures. But, you know, retaliation is, you know, the number one claim we see you know, whether you’re, whether it’s a disability case, a race case, a sex case, often there’s a tag along, you know retaliation claim, right? And so I think even the EEO statistics, EEO see statistics show that that’s their most frequent claim. And, and so it just sh that that’s, that’s one of those areas where it goes to show us that, you know, you know, someone who’s an at-will employee, we need to, you know, treat them, you know, we need to know the basics of equal employment opportunity, right?

We need to understand, you know, what statutes are applicable, right? We know the, you know, the discrimination statutes federally, but you know, maybe, maybe your state has, you know, a ban on using, you know, criminal records or, you know, salary history ban. And so there are more protected categories, you know, that, that you need to know about. And more protected categories leads to more people engaging in protected activity, right? And so, you know, that, that, that’s what I find that you know, one of, one of the things employers tend to do is kinda have knee jerk reactions to employee issues right? That you know, there’s an issue and, you know, a performance issue, and we’re gonna make a change real quick. You know, that’s not always the, the best, you know, outcome. Some, you know, companies should look at its policies is procedures, because even though you can terminate someone at any time, you want that to be lined up.

You want it to be set up right? Termination should never be a surprise. Right? There should be some history, whether it’s, you know, verbal warnings or written warnings along the way, you know, that will help us get there. So, you know, employment at will doesn’t mean we throw all that out the window. Employment at will means you document this kind of stuff. You document, you know, what the issue is, you document, you know, who spoke and when they spoke to the individual and how they were counseled. Because at the end of the day you know, it’s about what you can show. And, you know, if you can show that, you know, the, the company did not retaliate right then, then that’s what you need to show that, that there’s a legitimate business reason, right? For, for the for the employment action.

So, you know, even though you know, there’s you know, employment at, well, we wanna document everything because employees will claim that their termination fell under one of these exceptions, whether it’s, you know, a public policy, an implied contract, a discrimination statute and the only way that an employer can really establish that it did not violate any statute is by, you know, documenting. And again, can’t say this you know, enough. But certainly just because you’re an at will state doesn’t mean you can do whatever you want, right? You wanna document what you did and why you did it.

VANNOY:

Yeah. And, all right. So I guess maybe last thing I’ll just say, in closing, just having seen, having seen entrepreneurs and small businesses get hit just even though when they may have been right, maybe they didn’t break any laws being right and in cost to defend are two very different things, right? Now if you’re a, if you’re an employer doing bad things, then you should probably expect there, there’s gonna be a, a price to pay someday. But if you’re a, a, a good employer doing good things, you know, sometimes employees just don’t see it that way, right? They’re seeing things through a very different lens. And you could find yourself if, you know, if, if you could find yourself being sued for retaliation, even though you didn’t, you could, you could find yourself being accused of discrimination even when you weren’t.

And so our best guidance always is follow the law, communicate proactively to your employees as much as you possibly can, and record, keep record, keep record, keep. That’s the fastest way to resolve these, these issues, and diffuse them hopefully before they ever get to before, before a judge any cost of litigation or any, any governing body who might come in and decide to do an audit. So, we’ll, we’ll, we’ll put that off to the side. Let’s, let’s get back to the guts of at will. And I, I think where I want to go first you tell me, Brian, do you want to, you wanna talk exemptions first, or probably the thing that’s most interesting to me is this mistake where people think that it’s a W2 at will employee, but their behavior actually leads to them being a contract employee. What? I’ll let you choose where we go here.

SHENKER:

Yeah. Why don’t we start with that? The implied contracts. I, I think that’s an important issue, and probably something that a lot of employers are not even considering during the employment process.

VANNOY:

Yeah. So, so stay away.

SHENKER:

Yeah. Yeah. So with that, yeah, go ahead.

VANNOY:

No, no. Take, take it away. I, I agree with you. I, I think people just, I think employers just don’t realize they’re like, I don’t think there’s a bunch of bad employers out there thinking, ah, I get to squash the little man, and I’ll just fire this person and fire that person. Nobody enjoys that. Nobody’s successfully trying to grow businesses trying to do that, but they also might have a false sense of confidence that they could do that in a pinch or when a tough decision is required in maybe they can’t because of their behavior in an implied contract. So, go ahead.

SHENKER:

Right? So, yeah, let’s start out with, we, we all know that where there’s an actual written contract, that that’s going to govern the employment relationship, and we’re probably outside of the at will arena at that point, right? But here we’re gonna talk about implied contracts. So that means there’s no written agreement. But the issue is really, you know, that depending on, you know, the totality of the circumstances, you know, all the factors of the employment, it’s possible that the law will imply a contract for employment on some certain terms. So, you know, if this occur, Frank,

VANNOY:

Give us an example what that might look like.

SHENKER:

Yeah. So, you know, this might look like in an offer letter, right? Saying that the employer, the employee is being hired for a year long project. Right? Now, there’s a question as the, is that employee guaranteed a year of employment, or are they still at will? You know, it’s, it’s things like that. You know, when in the offer letter you state that this, you know, it’s a yearly salary instead of, you know, breaking that down into a weekly amount, right? You know, there can be, you know, other issues like in handbooks, if, you know, people are labeled as, you know, permanent employees or you know, sometimes there’s language regarding completion of a probationary period, and it might imply some duration of employment is guaranteed after, you know, passing that probation period. You know, sometimes companies are just a little bit loose with the language you know, in an employment handbook.

And it might say, you know, welcome to a lifetime of employment with, you know, company X, right? You know, so these, these are just examples, but they’re, they’re the types of things where, yeah, maybe one thing alone might not do it. But, you know, you can see how things like these can add up. And, you know, the, the court will look at, you know, the totality of the employment to understand whether, you know, the company may have promised either, you know, a certain duration of employment to an individual or that, you know, termination only in certain circumstances. And, you know, thi this, this can happen the majority of states recognize that an employee can prove an implied contract that essentially will negate the relationship. And so, like I mentioned, right? This, this could be in documentation like an offer letter or a handbook.

 It can also be something verbal, right? If we have managers or, you know, the hiring manager saying you know, Hey, we need good people around here. You know, you’ve got a job for life. Or, you know, when they’re hiring an employee, you know, we don’t ever, you know, fire employees, you know, we, we always give everyone a chance to correct their behavior, right? Or, you know, Hey, you’re gonna be great here. You’re gonna work at least, you know, 10 years, right? Right. You know, so these are the types of things that, you know, an employer might not think so much about saying these, but that these, these can imply that there’s you know, an agreement to be employed for a certain period of time that takes you outside of at will employment.

VANNOY:

Brian, I’ll, I’ll give a

SHENKER:

Will. One of the things in terms of,

VANNOY:

I’m gonna give you a use case here. Cause this, this, this is, this happened to be in the last maybe a month or two ago. According to F l s A, an inside sales job must be classified as non-exempt, right? So they meaning that they, they would be eligible for overtime, even though an inside sales job in today’s modern world with Zoom and, and email isn’t much different than an outside job, but that’s legal classification, right? And so because of that we give an offer letter to someone, we kind of discuss the annualized compensation plan, base salary, variable commission compensation, form of commission, et cetera, and we have verbal agreement, but the offer letter goes out and it just says a do a a a dollar hour, well, kind of freaked the person out. They were a junior person in their career freaked them out thinking, oh, this isn’t what I thought I signed up for.

Right? But the HR side of this is, Hey, you can’t tell ’em they’re gonna make X per year, because that could be an applied contract, right? When it’s not, it’s an hourly, hourly rate. Th this, I’ve said it before, th one of the, I think probably the most frustrating things for people who watch and listen to this show is they’re probably hoping for more black and white answers from us. And there’s no single thing, there’s just a bunch of best practices to follow, to avoid risk, right? In that situation, what’s, what’s your guidance? On one hand, the legalistic HR most protective side would say, here’s their hourly rate. There’s the real world side over here that says, Hey, this guy doesn’t even, all of a sudden he thinks he’s some low wage hourly worker, and I told him he is gonna have a salary, and now he thinks I bait and switched him. What, what, how do you strike a balance as an employer being protective and just speaking frankly, in normal language with people to, to not come off as this overly legalistic company that the employee might not wanna work for?

SHENKER:

Right. No, look, I, I agree, and it’s a, it’s a tough tightrope to walk. I, I think that as an employer, you need to be very careful in what you are putting in writing. So I, I would agree. I, you know, for instance, when we’re expressing the wage in an offer letter, you know, I want, I wanna express that in the smallest time period possible, right? It, it’s, you know, we can sit down with the employee and explain to them, you know, what, you know, that that actually means, you know, realistically but, you know, we, we want to be careful about it and make sure you know, again, you know, there are, you know, there’s disclaimer language that I always, you know, recommend, you know, being used and I know, you know, sure. Use it. And, you know, whether it’s, you know, in an offer letter, whether it’s in a a handbook that’s going to say, right.

You know, this shall not be interpreted as as an agreement or contract either expressed or implied between the company. It’s an employ and its employees, or Right. You know, your employment’s voluntary and you’re free to resign at any time with or without notice or cause you know, those are the types of things that, you know, you can’t state them enough right. Because right, there are other little things that might be said or written that yeah. Might imply something different. So that’s, you know, include that disclaimer language to make sure there is no confusion. But yeah. Yeah, I, I think as you hit on, you know, one of the issues that we always have are, you know, even if you have all the written documentation that that’s perfect, you know, what, what are your supervisors and what is HR going to be said be saying, because, you know, oral assurances you know, might be just as bad as, you know, having something, you know, in writing, right? So I think generally, you know, companies wanna avoid, you know, any type of assurances about, you know, job security, length of employment you know, disciplinary, you know, pro procedures just so that they maintain that flexibility and they make sure you know that they’re not giving the impression that, you know, employment is guaranteed in a way that, that it really isn’t.

VANNOY:

This

SHENKER:

Just, so this is, this is so

VANNOY:

Hard today. Yeah, so, so hard today, cuz I mean, when, when unemployment is, you know, north of 7% and, and the employer kind of has their choice of candidates, you can have the warm fuzzies and the interview and you can give a black and white legalistic hardcore offer letter and the, the candidate will be likely to accept it cuz they don’t have choices, right? In a, in a yes sub 3.5 unemployment rate where there’s choices as many o openings as there are candidates, which is the world today. Candidates have lots of choices. And so I, I just think this is extra important for employers to, to really get a, get a handle on this today. Cuz I don’t think, Brian, we we’re not advocating ridiculously legalistic only HR compliant offer letters here. And we’re not suggesting you shouldn’t say, Hey Brian, I think you’re an amazing employee.

You’re doing a great job here. I hope you stay forever. We’re not saying you can’t encourage people in, in, in with flowering language but there, there are, there are boundaries that you need to be aware of. So let, let’s just go through some of these. So you talked about don’t say, Hey, here’s your annual salary. If it’s a, if it’s a non-exempt employee, it’s, hey, as we discussed, your an annualized salary would be this, but you’ll be paid X dollars per hour, right? Your annual, an annualized quota would be this, our expectation is that each week or month, this is how much you’ll be selling, right? We can say these things and then still add the disclaimer language, Hey, that, you know, you can leave anytime you want. We can term this anytime we want it. It’s the combination of these things that, that we’re ab advocating for. Correct.

SHENKER:

Right. Exactly. And look, as we’ll get to at the end, I, you know, at-will employment might not be for every, every employer or for every employee, you know, there might be certain employees that, for instance, you do want a contract with you do want to take it outside of you know, the, the at will status. And, you know, we can discuss that there, there, you know, may be good reasons to do so. Like, like you were saying, like, you know, a lot of you know, companies are having hiring employees at this time. So, you know, giving someone a contract for, you know, a certain period of time or, you know, certain guarantees can be something that’s, you know, enticing to certain employees, right? But at the same time, you know, a company should weigh the, you know, what they get out of, you know, at-will employment versus, you know, what they have to deal with if they have an agreement and how they’re so limited you know, in terminating or other disciplinary measures.

VANNOY:

Yeah. Right. Is there anything else that you’d want to give guidance around? So we talked about offer letter, we talked about oral feedback during employment. Are there other gotchas that that people watching might not be aware of, of things that could, a, a judge might look favorably on the employee’s case or a former employee’s case that no, this was actually an implied contract, even though it started out at will over time it became a contractual relationship. What, are there other examples you could share?

SHENKER:

So, to, to me, in, in my practice, the, the two areas this comes up the most are the offer letter in the handbook. Just because you think those are, those are two documents going out right at the outset of employment that are going to, you know, the offer letter is specific to this employee outlining, you know, some of the terms of their employment. And so, you know, an imprecise offer letter really, you know, really can cause problems. So I, I think offer letters and really to go hand in hand with offer letters, you know, a job description, you know, those should be looked at, you know, explore, you know, the language you’re using in those, and then handbooks, right? I think that again, you know, there should be disclaimer language in there. It should be clear it’s not an agreement.

 And, you know, you just wanna make sure that you’re not putting language in there to imply that you know, besides that training managers so that they understand, you know, a as part of many o of their other roles, you know, what at will employment means, right? What, what that actually is. And that, you know, they shouldn’t be making guarantees. You know, it, it’s one of those things that’s difficult in this environment. We have, you know, we wanna retain workers. It’s becoming more difficult to do so you wanna incent, incentivize them. You wanna promise some things, but realistic things. So, you know, we want to make sure that, you know, managers aren’t you know, saying, Hey, you know, if, if you stay for, you know, six more months, you know, you’ll get a bonus. You know, we want to make sure we’re measured in the things that are promised, because again, you know, a manager might not think much of this statement, but trust me, the employees hear this and they rely on it. And that’s what they would try to convince a, a court to do, to rely, you know, that, you know, the employee, you know, was you know, entitled to rely on the statement of the employer, and that they should then, you know, get the benefits that were were promised. So, right. Just wanna make sure in, in conveying, especially at the beginning of employment, you know, those, those right expectations.

VANNOY:

All right. So, so I think, I think we, I think we covered that topic pretty well. Let, let’s go to the exceptions and there, and there’s a bunch of ’em, right? So as, as Mary Simmons frequent guest in the show always likes to talk about you, you can’t, you can’t create policy outside of the law, right? You, you, no matter what your policy is and what your desire is, you have to follow the law. So you may work in a state, you may employ people in a state where there is an at-will state but there are still ex exemptions. We’re not gonna, we, it’s not possible to go through every single state and every single exemption, but what are the big federal ones? What are some of the state ones we should know about?

SHENKER:

Right? And, and again, right, these are going to vary, you know, based on, on the state, you know, whether it’s, you know, they, they might be recognized, but to a different extent. So, you know, that’s important to understand. But you know, one of them, and we, we’ve touched on it a little bit not by name, would be the public policy exception. So this is a widely recognized exception to the at-will employment status that protects employees against adverse employment actions that violate a public interest. So you might imagine this is similar to, and does overlap a bit with you know, the retaliation exception, which kind of goes under the anti-discrimination laws. But, you know, so that, what, what is a, a public policy exceptions. So essentially these are whistleblower claims or retaliation claims where, you know, we’re saying there’s a public policy that employees should be able to, you know, report claims of, say, discrimination or, or other types of issues, or to, you know, make whistleblower complaints that, hey, you know, the company is doing this and this violates a regulation or a law that they should be able to make those types of complaints, you know, without being subjected to termination.

So, you know, the majority of

VANNOY:

States, so, so for example, Brian, would that be okay? I, I’m a, I work in the kitchen of a restaurant, 35 employees, and I see that my employer, you know, I’ve tried talking to my boss it’s unsanitary conditions in the kitchen. I know it breaks health code it’s not getting fixed. I get frustrated. I, I’m, I, I, I care. So I make an anonymous call to the, to the local health department, and they found out it’s me. They can’t fire me for that, right? Because that, that does that fall under a public policy,

SHENKER:

So, right. That, that would, and yeah, and depending on that, how that state construes that this exemption, right? Even though that’s, that might not necessarily be protected by a certain statute, that the public policy of it all says that, Hey, we want someone to, you know, make complaints about that, and therefore we don’t want someone being, you know, terminated for, for making those complaints. So, so yeah, in the majority of states, something like that would be accepted. There’s a minority of states that really only follows, you know, what’s put into the statute. So if it’s against the law to retaliate in a certain area, that that’s the only exception that they’ll they’ll follow, they won’t go outside of what the law what the statutes you know, prohibit. But yeah. A couple other examples of this would be you know, for instance let’s say, you know, we’re prepping a an employee, a witness for a trial, and, you know, the, you know, the employee said, you know, the employer is asking the employee to lie, right?

To, to say something that’s not true. And the employee says, I’m gonna refuse to cooperate. I’m not going to testify because you’re at, you’re, you’re telling me to commit perjury at trial, right? So that, that would likely be an example where, you know, the court would, you would say that, yeah, you, you shouldn’t be able to terminate someone who’s refusing your request to commit perjury. You know, things like that. Or, you know, reporting a violation of the law like where, you know, an employee reports, you know, fraudulent accounting practices at the company, or the, you know, the unlawful use of, you know, child labor, you know, those, those might be ones that, that come under this.

VANNOY:

Brian, Brian, let, lemme I’m gonna cut you off there. I assume that almost no one, if probably no one watching or listening today thinks that they’re abusing child labor that they’re asking their employees to perjure themselves. It happens <laugh>, it does happen, and you see it <laugh>, but, but what are, what are the edge cases that an employer thinks? I had no idea was doing anything wrong with that, right? Wh where are the areas that employers really get themselves in trouble here when it comes to public policy? And I’m, and I’m thinking it’s the, my brain was going to like the, the kitchen staff at a restaurant that, that thinks the place is gross and the owner won’t clean it up. So he, he notifies the local health board, or maybe it’s the construction worker who knows darn well they’re not following OSHA standards they’re on some ladder or some harness system or whatever and their won’t buy them the right equipment so that they make, they make a call. Where, where do you think employers get in the most trouble here?

SHENKER:

Yeah, so I, I think right in, right in that area you were just discussing where, look, a lot of these, and, and when I said the beginning, these overlap because I, I think, you know, as you mentioned, you know, with osha, right? There’s, there’s an osha, you know, anti-retaliation provision. So, you know, some of the stuff in this public policy exception may already be covered, you know, by a federal or state statute. But right, the, the things that might fall a little, a little less than that, right? Where, you know, perhaps there’s, you know, not something, you know, on the books in that state about the health codes and reporting, you know, that at a restaurant, but that it would, you know, make sense and be for the public good that an employee who’s going to report something like that, you know, shouldn’t be terminated.

 To me, things in this area are things that, you know, might fall, you know, just shy of you know, a retaliation claim. But you know, for instance, you know, many states do, but there, there are some that don’t have this on the books that, you know, file, you know, firing an employee who files a claim under worker’s comp comp laws, right? They should be protected from termination. You know, for instance here in New York that’s already on the books as being retaliation, but, you know, there may be somewhere that’s not. And so that’s typically something we’re gonna say, you know, no, you can’t do that. You know, when we’re looking at these, we’re looking at, I think, you know, broad senses of of fairness and, you know, what the public policy is of that state. You know, again, if the company is plausibly asking employee to engage in something that’s, you know, un unlawful, you know, I think we’re definitely within the imply, you know, the, this exception. But you know, it can, it can look a, a lot, you know, scenarios that come up under the public policy can be, you know, very, very different in how they come up. But a again, you know, a lot of the states will somewhat track their, you know, anti-retaliation laws with respect to their public policy exception.

VANNOY:

All right. So, so two big buckets you said, right? Number one is public policy exemption a anything else under public policy that you want to unpack?

SHENKER:

No, I, I, I think that’s pretty good. I think that covers

VANNOY:

It. And so what’s, what’s the second major category of for exemptions?

SHENKER:

Right? So, you know, I think the other, well, so we talked about implied contracts. I think another one to this, the the covenant of good faith, right? And this is, you know, a minority o of the states you know, really look at this one. But you know, this exception reads you know, a covenant of good faith and fair dealing into every employment relationship. So essentially it would mean that, you know, terminations and bad faith or you know, motivated by malice would be prohibited. This is a tough one, and it’s not a very large you know, exception. This would apply in California, Massachusetts Arizona to name a couple of the the states that follow the, the, you know, this exception. And, you know, look, really in deciding whether an exception is, is going to be inferred, the court will look at again, all the factors here, right?

 You know, whether, you know, the company filed its personnel policies, the length of employment for the employee any job security statements the employer may have made. But you know, an example is probably easiest. So what does this look like? You know, one good example would be, you know, firing an employee, a salesperson, right? Before, you know, a large commission is expected to be payable. Yeah. So we’re not, you know, they haven’t earned the commission yet, but they’re, you’re, you know, they’ve done all the work. We know within a matter of days or weeks, you know, that this commission will be payable, and the, the company essentially fires the, the salesperson to avoid having to pay that. Now, again, in many states, that’ll be fine, you know, there’s not gonna be any, you know, public policy saying you can’t do that. But in some, like I mentioned, Massa, Massachusetts, California, they’re going to look at that a little closer, and they might find, you know, an issue with firing someone in those circumstances just before a commission is due.

 Or another one might be firing you know, an older employee to avoid paying, you know, certain retirement benefits, right? Right. something that might not necessarily fall under age discrimination, but might, you know, put us in a situation where, you know, there’s a public, you know, there, there’s a good faith there. There’s clearly an issue with whether the employer is showing good faith. Now these are tough, and, you know, the ca the, the judicial decisions on these are few and far between, because you can kind of imagine right? Defining what good faith or bad faith in terms of this is very difficult. And if the court goes too far, it’s really just rewriting what at-will employment actually is. Yeah. So while this is something, you know, certainly you know, it doesn’t come up all the time.

VANNOY:

And, and again, I’ll go back to my kind of my previous comment that probably nobody on here is, even though we know darn well it happens in probably nobody listening is thinking, Hmm, I’ve got this person approaching retirement. I’m gonna whack ’em so I don’t have to pay benefits. Or I got this sales rep who with, with, with five kids and a sick mom. But I’m gonna fire ’em just to avoid this commission. Probably don’t have a bunch of people listening think thinking that, that, that are that evil. And if they are, you know, karma’s a bitch, right? So it’s probably more the edge cases, like as an employer, you don’t get to be passive aggressive. You don’t get to say, coming in late every day is fine, and then one day it’s, you snap and said you’ve had enough, you’re gone. Well, if you said it was fine, that means that you’re, you’ve demonstrated through your behavior that it’s actually fine, right? It’s probably these more nuanced scenarios that get employers in trouble and the, and maybe the cumulative effect of how these things stack up on top of each other.

SHENKER:

Yeah, absolutely. And this, you know, and, and exactly what you’re saying goes, goes to why documentation is so important in this percent, you know, employees, you know, can, there, there might be multiple reasons for, you know, termination and, you know, something in there might be questionable. And, you know, in terms of its legality and if the company has, you know, documented it and documented why it’s, you know, taking the action. I mean, you know, what I, as, as a litigator, you know, I, I often tell employers a whole nother reason why they should be documenting things is because, you know, your memory gets fuzzy over time, but, you know, documents stay the same. So, you know, even if you know, you’re thinking of nothing else, but, you know, maybe in a few years I’ll be in litigation if this person makes a claim, you know, that that’s the reason to document it, because you’re not gonna remember why on you know, September, 2022 on a certain day, you know, you disciplined an employee, you know, when you’re asked about it a year later.

Right? But if you document it, it’ll show, and then it leaves less room for employees Yeah. To bring up that the, the reason for their termination fell within one of these exceptions. Yeah. and, you know, going, you know, down that road, right? Another big area of exceptions to at will employment, which we’ve touched on are the, you know, discrimination laws laws they’re gonna be, you know, discrimination laws in, you know, federally that we have to abide by that, you know, say you can’t terminate someone because of, you know, their race or their sex. And then, you know, states go beyond that. You know, in, in lots of different states, you know, there, there are more and more protected categories as we’re seeing. And so those need to be considered, you need to understand, you know, what’s a protected category in your state.

 But you know, as we also mentioned, right, whistleblower laws you know, these are know things that, you know, as you mentioned, right? The health issue at, at, at the, you know, at a restaurant you know, a safety issue at a home, you know, for home health aids, right? And their patients. These are things that are going to be exceptions. If someone makes a whistleblower claim, we’re, we’re not terminating them because of that. You know, they’re, that that’s a whole nother area about what to do after a whistleblower claim. But, you know, these types of you know, issues under, you know, under federal statute, whether it’s saying, you know, you can’t discriminate against someone or under the F M L A, you need to give this person job protected leave, you know, that means, of course, that’s an exception to at will.

We can’t terminate that person, right? While they’re out on their you know, 12 weeks of F F M L A leave. So, you know, each of these laws, if you think of it, you know, provides you know, a limitation on, you know, when, and, you know, and for what reason, you know, someone can be terminated. So, yeah, I, I think that knowing your state’s you know, knowing the federal, you know, protected categories, but then going farther, knowing that the protected categories in your state should certainly be important in terms of, you know, not dismissing someone for one, you know, for one of those characteristics.

VANNOY:

Yeah. Very good. Hey, last topic, I think maybe we should talk about here is in enforcement. So a, you know, as we, as you and I frequently discuss, you know, sometimes, okay, E E O C, this is their lane, department of Labor, federal or state, this is their lane. This is an area that’s just handled in the courts through, through lawsuits. How, how is at will inform how at, at-will employment enforced how, and, and, and what, what governing bodies are there in maybe then in practicality, how does this usually play out?

SHENKER:

Right? So, yeah, I mean, you know, unlike you know, wage and hour and, or, you know, discrim, you know, discrimination with the E O C wage and hour with the D O L, you know, there’s no you know, I guess, you know, at-will employment police, right? Right. But I think it, it, you know, what we do see is that, you know, at, at-will employment issues, they get into every area of what we deal with. So, you know, at will employment, you know, that’s gonna be something that’s raised in a discrimination case. Right. You know, the employees claiming they were discriminated or terminated because of some characteristic, the employer is going to say no. They were terminated for a legitimate business purpose and we were permitted to do that because we can, you know, terminate someone for, you know, any reason as long as it’s not unlawful.

So, right. Discrimination, retaliation cases, whether it’s at, you know, the state or federal agency or in courts, this is, you know, often brought up there. And then there the, you know, there are other laws, for instance, you know, we, we talk about you know, unpaid wages quite often under the flsa, the Fair Labor Standards Act the FLS a also has an anti-retaliation provision, right? We can’t terminate someone for, you know, complaining about their wages. So again, that’s another area where, where you see this come up you know, and then the, the whistleblower type issues, those will come up you know, at, at osha potentially there’s some other federal statutes, but also, you know, state statutes. So, you know that that’s where we’re often seeing this when there are, when there are challenges to employment decisions you know, obviously, you know, companies that have a union workforce understand that or should understand that those, those union workers, you know, they fall outside at-will employment.

 But it’s more about your regular at-will employees and where, you know, where you’re gonna see these issues come up. So typically, you know, discrimination, retaliation claims but also more and more under whistleblower type issues. And again, when, when we talked about implied contracts that’s something where, you know, that that could give an employee cause to, you know, file a lawsuit to say, no, I have an agreement for, you know, x these terms. And the employer’s not recognizing that. And, and that could just be its own lawsuit, not not relating to anything, you know, any other, you know, potential statute. Right. So, you know, there are a lot of areas this comes, this comes up in, not necessarily just on its own, as in what’s at will, it’s almost, you know, at Will employment is such a, an important doctrine in US law that, you know, to under, you know, to really understand the, you know, the employer-employee relationship. You know, each employer should really have an understanding of, you know, at-will employment, what it means, what the exceptions are so that, you know, everything else kind of builds on top of that, you know, in our, in our legal system.

VANNOY:

Yeah. Very good. Brian, anything else you wanna say that you think we should have covered and didn’t about at-Will employment?

SHENKER:

Yeah, I, I think the, the only thing I I’ll mention is, you know, cuz we’ve been telling about at-Will is that, you know, of course there are, there are options, right? You, you don’t need to have at will employees. You know, an employer could have employment contracts and those could govern termination or right, in the past, Mike, we, we’ve talked about restrictive covenants. You might have an employment agreement that doesn’t necessarily talk about you know, termination provisions and it might rein, it might reiterate that it’s at-will employment, but just governs other aspects of the job. So, you know, it’s important, you know, whether you have no contract or you might have some contract with employers to understand, you know, whether you’re taking that, you know, this employment outside of at will or, or if it’s still in there. And

VANNOY:

Brian, is it what

SHENKER:

I would say,

VANNOY:

Do you think, think of a scenario where someone, an employer should consider using a contract and making a contract employee?

SHENKER:

Yeah. Yeah. I, I think that especially in this the environment we are now, these days, that contracts can help attract top talent for companies, right? Where you’re agreeing that, you know, as the employer is saying, I’m not gonna fire you whenever I want. You know, that might be a job perk if, if they have, you know, guaranteed employment for, you know, some period of time. You know, it also, you know, formalizes the, you know, the employee’s engagement you know, helps set the, the framework for their employment. And, you know, another benefit through employment agreements, you can get notice, right? We can put in that the employee needs to provide, you know, two weeks or four weeks of notice. I know that right now with my clients, that’s a big issue with not just turnover, but people leaving so quickly and, and not time to not having time to you know, cross train someone else or get their replacements. So having an agreement that, you know, the employee will provide certain amount of time before they leave, you know, it can be an effective tool for, for companies as well. Yeah.

VANNOY:

Very good. Brian, I, I learn from you every time we talk, so appreciate you joining today. Why don’t you take 15, 20 seconds, tell everybody about your firm and how you help employers.

SHENKER:

Sure. Thank you. So Jackson Lewis. We’re a nationwide law firm with over, you know, 60 offices in the US and over 900 attorneys. All we do is represent companies in labor and employment matters. Whether it’s you know, compliance side or litigation you know, we are happy to help any company in employment Employee Matters.

VANNOY:

Thanks Brian, and Asure over 90,000 small businesses that we provide payroll and HR services for. And as, as Brian kind of talked about here, one, one of the best practices you can have is two, two of the best practices to avoid inferred contracts and to, to steer clear of any at-will employment. Termination issues is good, offer letters and an employee handbook. These are core to what we do as, as part of our, our HR services for absolute fraction pennies on the dollar, what you could ever pay a full-time SHRM certified hr professional on your team. So if there’s anything we can do to help, we would love to do that as well. Brian, I always enjoy talking to you and e everyone. Thanks for joining today. Look forward to talking next week. Have a great day.