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"At-Will" Employment: Avoid Unintentional Mistakes

It may seem like a good idea to say you will terminate employees only "for cause," particularly if you want to be perceived as acting fairly towards your workers. But, if you do, you could be limiting your ability to implement your policies as you determine appropriate. Below are the five promises your policies should never make.

Q: As a practical matter, we typically do not fire an employee unless we have a good reason, such as poor performance or attendance problems. Is there any reason we should not state in our handbook that we will terminate only for a cause?

A: Yes. If you include a termination "for cause" statement, you likely will limit your ability to terminate employees at will or as you determine appropriate.

The at-will relationship generally covers employees who do not have contracts guaranteeing employment for a specific period of time (such as one year). Under the at-will doctrine, you have the right to terminate those employees who are working without contracts at any time and for any legally permissible reason. At the same time, these employees also have a similar right to resign whenever they want. In other words, at-will employment is a somewhat harsh and impersonal legal concept that says both parties can terminate the relationship at any time.

Employees who are not "at-will" often can be terminated only "for the cause." Employers that use this term generally mean that the organization will have a performance-related or disciplinary reason for terminating the employee. Some employers define "for cause" in their handbooks or policies and state that employees will be terminated only for specific reasons, usually related to performance or conduct.

Although most organizations do not terminate employees without having these types of reasons, specifying that an employee will be terminated only for a cause can limit your ability to implement your organization's policies and may create a contractual obligation to terminate only for those reasons. Similarly, employers that use the term "for cause" in written policies without defining it may confuse employees and invite legal challenges as to the validity of the reasons for termination. Therefore, to maintain management flexibility and preserve the at-will status of employees, you should not use the term "for cause" to characterize the reasons for which your organization may discharge employees.

Instead, you should build flexibility into your wording and steer clear of any promises that could be interpreted as a contract. For example, your policies should not:

1. State that the organization will "only" or "always" does something or "must" act in a particular way;
2. Describe employees as "permanent;"
3. State that employees will be terminated only "for a cause;"
4. Make promises of job security; or
5. Use all-inclusive lists, such as in disciplinary procedures or work rules.

As an alternative, you should use terms such as "generally," "typically," "usually," and "may" so that managers have flexibility in interpreting and applying the policies. In addition, you should specifically retain management's right to update, change unilaterally, and implement all policies as it sees fit.