REPLACING “AT WILL” EMPLOYEES: HOW TO MANAGE THE RISK

Idaho employers have to be efficient and profitable before they can provide jobs that are secure. In today’s highly competitive post-recession economy, employers are continually restructuring their workforce to implement new business plans, and this often means replacing employees.This is an especially daunting task for mid-level managers who take charge of part of an organization and need to bring in their own team. But how can an employer replace personnel without running afoul of employment rights and regulations? To minimize the risk of a lawsuit, employers should know the law, both public and private.

Idaho is a “work at will” state, meaning that unless the employment contract states otherwise, either the employer or employee may end the employment relationship at any time, with or without notice and with or without cause.  (The Idaho Department of Labor’s Labor Laws FAQ can be found at: http://labor.idaho.gov/dnn/Default.aspx?tabid=693.) However, employers should be aware of two major exceptions to this default rule.

First, Idaho courts have recognized an exception where the motivation for terminating an employee violates public policy, such as with discrimination or retaliation.  A termination violates public policy where an employer terminates the employee for engaging in protected activity, which includes (1) refusing to commit an unlawful act, (2) performing an important public obligation, or (3) exercising certain legal rights and privileges. This public policy exception can apply, for example, where an employee is discharged for filing a workers’ compensation claim, for reporting safety violations, for serving on jury duty, or for participating in union activities. Also, if the employer is a government agency, its employees are covered under the Idaho Protection of Public Employees Act, which specifically prohibits adverse action taken against whistleblowers.

The second major exception to the “work at will” employment relationship is the “implied contract” where an employer makes oral or written representations to employees concerning their job security or procedures to protect them from adverse action.  In Idaho, such representations can be deemed to create or become part of the employment contract and may limit the employer’s ability to terminate the employment without cause. For example, an employee handbook might provide for notice or a hearing before termination. Employers should review their own policies, particularly any employee handbooks or union agreements, because the employment relationship may be subject to the terms of those agreements, which in effect create private law. Terminating an employee in violation of such policies can subject an employer to a lawsuit for breach of contract.

INSIGHTS FOR EMPLOYERS

  • Before deciding to terminate an “at will” employee, carefully review the employee’s file to ensure that termination will not create the appearance of discrimination or retaliation for protected activity.
  • Periodically consult the written employment policies, agreements and guidelines that might apply to your employees, including employee handbooks, because these can create an “implied contract” that modifies the “work at will” relationship and limits your rights.  To keep the benefit of the “work at will” relationship, delete any conflicting policies, or insert a clear disclaimer that the employment remains “at will” and the employment policies do not create contractual rights.
  • Approach terminations with great care and deliberation because taking adverse action against an employee under the wrong circumstances can have serious consequences.

    Please contact a Gjording Fouser lawyer at 208.336.9777 if you would like any additional information about this topic or any other employment issues facing your company.