If You Want To Protect At-Will Status You Have to Put It in Writing

16 Dec

I recently assisted a client in the termination of a long term employee who had become a cause of dissension in their office as well as a significant expense.  In talking with the – about to be ex-employee, he said, “but I was told several years ago that I had done such a favor to the owner that I had a job as long as I wanted”. 

There is little doubt that such a discussion probably did occur.  Such informal remarks happen in the workplace, whether intended or not.  Often the owner or manager may not remember them, but the employee involved does.  Later, when discipline or even time to fire the employee arises, all these comments come back to face the employer.

But they do not have to stop a well prepared employer from doing what he has to do to run his business effectively and lawfully.  You do need to have a well written employee handbook, and employee policies, however. 

This was demonstrated again just recently in Faigin v. Signature Group Holdings, Inc.  a California Court of Appeals, 2nd District, decision issued December 5. 2012.

This case involves damages for breach of an implied-in–fact agreement to terminate an executive’s employment only for good cause.  In this instance, the person was fired because the business was in financial trouble and new executives were brought in to replace him.

The Court of Appeals held: “The existence and content of such an agreement are determined from the totality of the circumstances, including the employer‘s personnel policies and practices, the employee‘s length of service, actions and communications by the employer reflecting assurances of continued employment, and practices in the relevant industry.  [Citations] An implied-in-fact agreement to terminate only for good cause cannot arise if there is an express writing to the contrary, such as a written acknowledgement that employment is at will or an at-will provision in a written employment agreement. [Citations]

The court went on to state, “There cannot be a valid express contract and an implied contract, each embracing the same subject, but requiring different results. [Citations]

So, what does this mean for you as an employer:  make sure you have a well written Employee Handbook with an “integrated at-will” provision.  And if you want to learn more about what that means or how to make sure you have one, just call me or email: DonDressler1@hotmail.com

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