Have you or someone you know ever been fired from a job, not because of something that you or they did, but just because the boss could? In all states but one, most employees are ‘at will,’ meaning, in general, that they can be let go for any legal reason. And that can be terribly unfair.
“But it is different in Montana. This small state, with a population of less than 1.5 million, may very well have one of the most significant roles to play in the ability of employers to fire someone for virtually any legal reason, immediately and without the need to prove justification,” observes New York attorney Steven Kelly, former associate commissioner at the New York City Department of Consumer and Worker Protection.
Kelly, a friend of this column and lecturer for LearnFormula, a provider of continuing education courses for many state bars across the country, added, “If you remember the hysterical Peter Sellers movie The Mouse That Roared, that’s Montana. While it is too soon to call it a trend, there is reason to believe that the worker protections Montana enacted decades ago might very well be revisited by other states, bringing our country in line with the rest of the world.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
“In fact, ‘just cause’ as a basis for termination is being debated in a number of state legislatures, while New York City and Philadelphia already have similar laws in place.”
'At will' equals employer flexibility
Flexibility is often cited as a justification for hiring ‘at will.’ Employers are free to hire and fire at will to meet staffing needs, but they must act within the law. Employees are also able to quit at any time. But many people in HR will admit that the result is uncertainty and, often, a greater amount of fear most employees have than you find in countries where a job is more along the lines of a property right and can’t be terminated without justification.
The fallacy in advice to business leaders
For this column, I interviewed a number of business leadership experts. Every one of them recommended creating psychologically safe environments that encourage employees to honestly share their feelings and opinions. But, as Kelly observes, “Without something along the lines of a just-cause basis for termination, employees are still reluctant to speak truth to power. When they do, far too often they are fired. For example, last year, much of the world was fixated on the Titan submersible disaster that tragically imploded during its effort to visit the Titanic. Warnings of its danger were ignored — and the employee who predicted failure was fired by the company’s owner. That could not happen in a just-cause jurisdiction. But this scenario is not unique.”
Employers need to adopt best practices for dealing with terminations
Kelly points out that no employee should be surprised that they are being terminated. “It is clear that movements to empower workers are gaining momentum. While ‘just cause’ may not happen overnight, employers — from mom-and-pop small businesses to large corporations — may need to retool their procedures for dealing with employees at risk for termination, out of basic fairness and in order to avoid wrongful-termination lawsuits.” Employees who are prepared for an impending termination are also less likely to resort to workplace violence.
One way to ensure that all employees are on the same page is to have an employee handbook. “Best practices dictate beginning with a well-drafted employee manual that sets out job descriptions (what is required), what can lead to a disciplinary process and what's going to take place during that process. It should include addressing the issue in a prompt manner and garnering input from the workers themselves,” Kelly underscores. “As these are difficult conversations to have, it is critical that employers contemporaneously document the interaction and treat all employees in a consistent manner.”
Employers shouldn't go it alone on drafting an employee manual
That handbook should also be written with the help of counsel, Kelly adds. “While this might seem to be a burden to a small-business owner, in today’s highly litigated environment, every business needs to have access to counsel well-versed in current laws who can help draft the handbook.”
Why? Because, Kelly says, “this is an area where it's critical to partner with legal counsel at the very beginning, not waiting until you're at the point where you're making a decision to fire someone, or perhaps have already. An attorney can assist in drafting the employee handbook and also making sure everything that you've written in there complies with the law.”
Kelly concluded our interview by asking this question: “Is your employee manual comprehensive enough to take into consideration virtually every scenario that the lawyer thinks your business, based on its size and on the number of employees, could encounter? Given the ever-changing nature of laws related to hiring, disciplining and terminating workers, it certainly better be.”
Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.
Related Content
-
Stock Market Today: Stocks Are Positively Mixed to Open DecemberTechnology led the way Monday as two of the three main equity indexes closed higher.
-
The Best Retail Stocks to Buy This Holiday SeasonE-commerce is a growing trend, but most folks still prefer to shop in stores. That makes these dominant retail stocks worth a closer look.
-
One Good Way to Withdraw Retirement Assets (and a Bad One)Don't withdraw retirement assets haphazardly. Managing distributions intentionally can lower your taxes, conserve your wealth and reduce Medicare premiums.
-
What Is Capital Gains Tax Deferral?Spoiler alert: It's the secret weapon of savvy real estate investors. Here's how it works and details about the tools you need to do it.
-
Don't Leave Your Heirs an IRA Tax BombYour traditional IRA has served you well, but when your heirs inherit it, watch out. Consider some of these strategies to minimize their tax burdens.
-
Five Ways to Maximize Your End-of-Year PhilanthropyTo do the most good, pick the right charity, be smart about how you donate and consider giving something just as valuable as money: your time.
-
Three Options for Retirees with an Old (Forgotten) AnnuityDid you buy an annuity in the 2000s? If it’s been out of sight and out of mind since then, it's time to dust it off and start making it pay for your retirement.
-
Tax Software vs a Tax Professional: Which Should You Choose?The simple answer is a question: How complex are your taxes? Here's how you can decide whether you can go the easy route or need the help of a pro.
-
The Key to Choosing the Right Annuity: Do Your HomeworkHere are some of the pros and cons of annuities, along with an explanation of the different types. Which might work for you?
-
Are You Annoyed That You Have to Buy Car or Home Insurance?Maybe instead of considering car and home insurance extra expenses that you don't benefit from, think about how those policies protect your investment instead.
