ANOTHER INROAD INTO AT-WILL EMPLOYMENT:
By JOANNA GROSSMAN
Tuesday, Sep. 11, 2001
Most Americans work "at will"their own and the employer's. That means there is no fixed term for the employment relationship, and while employees can quit without reason, they can also be fired without cause: for a good reason, a bad reason, or no reason at all.
However, at-will employment has, over the years, been narrowed by various statutory and common law rules that give employees some rights against termination. A recent Connecticut decision has added another such rule: In that state, even a woman who is an at-will employee cannot be fired merely because she becomes pregnant.
The Connecticut Ruling
The Connecticut decision came as a result of a case brought by Nicole Ann Thibodeau against her former employer. Thibodeau alleged that she was fired because she became pregnant. Her employer claimed, instead, that she was fired due to performance deficiencies.
Thibodeau faced some hurdles in challenging her termination. Because she worked for a very small business, she could not file suit under either federal or Connecticut anti-discrimination statutes, which apply, respectively, only to businesses with at least fifteen, or at least three, employees. Moreover, as an at-will employee, Thibodeau had no contractual rights against discriminatory termination.
As a result, Thibodeau did not bring a statutory or a contract claim, but rather sued for wrongful discharge. She argued that because of Connecticut's general public policy against pregnancy discrimination, even an at-will employee who is not protected by statute against discrimination should be able to bring a wrongful discharge claim if she is fired simply for becoming pregnant.
The trial court rejected Thibodeau's claim out of hand. But the Connecticut appellate court reversed, providing even greater protection against pregnancy discrimination for the women of the state, no matter how small their employer.
At-Will Employment: The Limiting Statutes
Because Thibodeau worked for a very small business, her situation in which the only possible remedy for her firing was a wrongful discharge claim was not unusual, as a quick review of at-will employment law and its exceptions will show.
Under traditional at-will employment, at least in theory, neither the employee nor the employer could sue if the employee was fired or quit, because each retained an absolute right to terminate the employment relationship. Absent any statutory or common law exceptions, this unfettered right of termination even included the right to fire someone because she is black, female, pregnant, Jewish, or comes from a foreign country.
But as mentioned above, the law has changed significantly over the years, through both statutes and the common law that is, the collective set of judicial decisions interpreting doctrines such as the law governing wrongful discharge. The most significant inroad into pure at-will employment is the federal anti-discrimination statute Title VII, which makes it illegal for employers (above a certain size) to fire any employee on the basis of a protected characteristic like race, sex, or religion.
In addition, most states have, like Connecticut, enacted Title VII analogs, which are often broader, apply to smaller employers, and sometimes add sexual orientation to the list of protected characteristics.
Finally, the Family and Medical Leave Act places an additional limit on employers with more than 50 employees, by guaranteeing job reinstatement to employees who take time off when they have a baby or become seriously ill.
The Small Employer Exemptions
There is no dispute that all of these statutes protect not just employees who work under contract, but also at-will employees against discriminatory firing. Taken together, they effectively allow employers to fire at-will employees for no reason, but not for a bad reason. Yet most of these statutory protections do not apply to small employers; rather, most exempt all employers who fall below the minimum number of employees set in the statute.
These minimum-employee requirements are the product of political compromises between civil rights forces and the small business lobby. The theory behind most of them is that small businesses cannot afford, for example, to hold jobs open or hire temporary workers while women take maternity leave. Small businesses also have asserted that they cannot afford the cost of litigating employment discrimination claims.
As a result of successful lobbying, small, exempt employers, then, retain the right to fire at-will employees for discriminatory reasons.
There are some protections in place for employees who work for small employers, but they are limited to only some forms of discrimination (none, for example, protects against pregnancy discrimination). Section 1981, for example, is a federal civil rights statute that prohibits race discrimination in the making and enforcement of contracts, including those between employers and their employees. It applies to employers of all sizes, no matter how small. Moreover, according to several recent federal appellate cases, Section 1981 applies to at-will as well as fixed-term employees.
Common Law Protection for At-Will Employees
Because statutes provide little help to at-will, small-business employees like Nicole Thibodeau, these employees are left to rely on common law protections.
There are two types of common law protections against firing for at-will employees: procedural and substantive. The first type involves the imposition of good cause or due process limitations on employers' right of termination. Courts have made use of contract law to provide some of these protections.
For example, many courts have said that at-will employees can sue for wrongful termination when the procedures outlined in employee handbooks are not followedeven though the employees have no underlying right to continued employment on the theory that the handbooks constitute a type of contract with employees.
Other courts have held that an at-will employment relationship is governed by an implied covenant of good faith and fair dealing, which prevents an employer from firing an at-will employee without cause. This covenant may be implied even where there is not written contract.
There are substantive protections for at-will employees, too. Courts have recognized public policy exceptions to the doctrine of at-will employment to inhibit firing on specific bases. These exceptions are based on the notion that employers should not be able to exercise their right to fire at-will employees if doing so in a particular situation is inconsistent with an important public policy.
Some common public policy exceptions include: protection for older workers against being fired before their pensions vest; protection for whistleblowers against retaliatory firing; and protection for workers who refuse to commit crimes (like perjury, for example) on the employer's behalf. These exceptions place additional limits on the ability of employers to fire at-will employees by allowing them to sue for wrongful discharge.
A Public Policy Against Pregnancy Discrimination?
What the Connecticut appellate court has done in Thibodeau is create a new public policy exception to the doctrine of at-will employment for pregnancy discrimination. But what separates this exception from others is that it creates a right where the legislature has expressly not created one.
Recall that the Connecticut anti-discrimination law's three-employee minimum expressly exempts employers with two or fewer employees from its prohibition of, among other things, pregnancy discrimination. Yet the effect of this court's ruling is to extend that same prohibition to every employer, no matter how small thereby virtually writing the small employer exemption out of the statute.
How did the Connecticut court reach that result? It did so by examining the state constitution and various state statutes, and finding therein a general public policy against pregnancy discrimination.
The Connecticut Constitution, unlike the federal Constitution, includes an Equal Rights Amendment. Accordingly, it provides some authority for finding a strong state public policy against sex discrimination, including pregnancy discrimination. Thibodeau could not sue her employer directly under the Connecticut constitution, which only regulates state actors, not private employers. But the appeals court still found it relevant as a barometer of state public policy.
Likewise, Thibodeau could not sue under the state's anti-discrimination statute, which explicitly prohibits pregnancy discrimination but exempts small employers. But the appeals court still found that statute relevant to her case, in that it evinced a state commitment to eradicating pregnancy discrimination.
In short, the court looked to the motivations behind the Constitution and the statute to articulate a broader state policy of anti-discrimination that could be applied in a common law wrongful discharge suit.
An End Run Around the Legislature?
The Thibodeau decision is certainly vulnerable to the criticism that it effects an end-run around the legislature, which had explicitly rejected a proposal to apply the anti-discrimination statute to all employers regardless of size. Thus, one might wonder how the Connecticut court reconciled its ruling with the legislature's decision to exempt small employers.
The court defended its ruling by explaining that the legislative decision to exclude small employers was not intended to give them a license to discriminate with impunity. Rather, it was only designed to limit the statutory remedies against them, and common law suits such as Thibodeau's can still proceed consistent with that design.
With the Thibodeau decision, Connecticut joins a growing number of states that have recognized public policy limits on the doctrine of at-will employmenta trend that may be a loss for employer freedom, but is certainly a victory for women. Perhaps decisions like this one will force people to question why legislatures give small businesses greater latitude to discriminate against their employees in the first place.