Employee Termination - At Will or otherwise?

March 4, 2014

Question:

Jennifer,

I want to terminate an employee and the contract says "at will" and has a 2 week notice provision.  When can I terminate?

Thanks,
Dr. G

Answer:

Most employment contracts contain a provision stating the employee is an employee “at will”, but what does that mean?  Does that mean that contract may be terminated by either party at any time for any reason?  The “at will” provision in an employment contract does not vitiate the other terms in that same contract; meaning, if contrary terms in the employment contract exist, for instance, a termination provision requiring notice by either party terminating without cause, then an employee may not be terminated without notice for no reason.  Where an employment contract has specific terms related to termination, or where a practice has adopted certain policies and procedures regarding termination, or where the practice has given an employee a term sheet or engagement letter, if any of those documents contain provisions related to termination, those provisions should be followed upon terminating an employee.  Where none of the above exists and an employee is brought on to work at the practice without any contract or policies or procedures, that employee would be treated as an employee “at-will”.  Likewise, where none of the aforementioned policies address potential termination, employees would be treated as “at will”.  An “at-will” employee may be terminated at any time for any reason, so long as the reason the employee is fired is not a prohibited reason, for example, it is a crime in New York to terminate an employee based on:

•    Race
•    Creed
•    National origin
•    Age
•    Handicap
•    Gender
•    Sexual orientation
•    Marital status
•    Political or recreational activities outside of work
•    Legal use of consumable products outside of work
•    For membership in a union

Also, the employee is equally free to quit at any time without need to explain or defend that decision.  New York and many other states are extremely litigious state with too many attorneys with not enough to do.  It is not difficult for an aggrieved prior employee to find counsel to assist in an action against an employer, which is why it is recommended that each and every employer document carefully performance of each employee.  It is not typical for an employer to terminate an employee for no reason at all.  The reason may be a need for down-sizing, if not related to job performance; regardless, there is usually a reason.  You are not required to share the reason for termination with the employee, however, if you have a justifiable reason for terminating, you may wish to disclose in an effort to stave off any potential aftermath.  Discrimination claims, wage/hour claims and general unlawful termination claims are on the rise. 

To protect your practice against any such claims, in addition to keeping excellent documentation, and maintaining and utilizing practice policies and procedures (including an employee handbook), you may wish to pursue obtaining Employment Practices Liability Insurance (“EPLI”), which is typically offered by your general liability insurer.  EPLI provides coverage for legal expenses related to unlawful termination claims.  For additional information I recommend contacting your insurance broker or call our office for a referral.