At-will Employment? Right-to-Work? What Does It All Mean?

Issue: February 2010 by in Archives, Legal

With rising unemployment rates and a failing economy, employment law is becoming more of a headache for employers, employees and lawyers alike. It seems that almost everyone understands the rules of the game for an employee that quits and finds work elsewhere. However, almost nobody understands the rules when the employee is terminated.

At my practice, I consistently deal with the following two scenarios:

Employer: “That employee was terrible; I had to fire her. Even though she was never outright, hostile or insubordinate, she just never did anything the way it was supposed to be done. Now, she is after me for more money. How in the world does she expect to collect unemployment? Isn’t this an at-will employment state?”

Employee: “I cannot believe they fired me; they didn’t even tell me why. The boss simply demanded that I pack up my personal things and leave. I suspect the real reason they fired me is so that they can hire someone to do my job for less pay. Don’t I have an action against them for wrongful discharge? Isn’t this a right-to-work state?”

The answers to employment law questions certainly involve interpretation of facts but, more importantly, they involve an understanding of employer and employee rights. Allow me to explain a few things about employment law in Virginia that, hopefully, will clear up some common misunderstandings.

First and foremost, one must understand that Virginia is both an at-will employment state and a right-to-work state. A proper understanding of these terms is essential for an understanding of the rights of both an employer and employee.

Right-to-work means an employer cannot make an agreement with a union that membership in the union is a condition of hiring or continued employment. Basically, membership in a union is voluntary for employees. In most workplaces, right-to-work is irrelevant because there is no union. In addition, an employer rarely violates this prohibition.

At-will employment means that, subject to some limitations, the employer is free to discharge individuals for good cause, bad cause or no cause at all, and the employee is equally free to quit, strike or otherwise cease working. This is the heart of employment law in Virginia, and the subject of most disputes. Usually, a case for wrongful discharge will arise from a violation of the at-will employment limitations.

The most important limitations on at-will employment are found in a patchwork of federal and state laws and regulations designed to prohibit discrimination. Discrimination is generally defined as taking an adverse action against an employee or potential employee based on race, color, religion, sex, national origin, age or handicap status. There are also limitations on such adverse actions based on pregnancy, family medical leave, refusal to commit illegal acts and a host of other things. In addition to the above limitations, an employer also must abide by the limitations contained in the terms of any employment contract between the employer and employee.

An employer that discriminates can certainly be held accountable for wrongful discharge. However, firing an employee for any reason other than discriminatory acts or even no reason at all is acceptable in Virginia. As long as an employer sticks to any enforceable contracts and avoids the list of prohibited reasons, the court will not recognize an action against the employer for wrongful discharge, even if the discharge is completely unfair.

Employees take note: Cheaper labor, bad economy, poor management decisions, disagreements with coworkers, sending inappropriate emails, partying on the weekend and mixing business with pleasure are all absent from the above list. These are all reasons that an employer may fire you, and, in fact, the employer is allowed to fire you for no reason at all.

Employers take note: At-will employment gives you broad latitude when deciding to fire someone, however it does not discharge any duties related to unemployment compensation. Unemployment compensation is a complicated matter, but the bottom line is that if an employee is eligible for it, then they will get it.

So what is the best way to bypass all those pesky laws and limitations so that you can get down to business? You should use an employment contract or employee handbook with a predetermined termination procedure. Such a procedure will establish a standard that both the employee and employer can appreciate. It lets an employee know what is expected and allows the employer latitude to deal with problems. It also puts limits on both parties’ ability to open the door to termination. Even in an at-will employment state, the court will always uphold such an agreement between an employer and employee, as long as it is a valid contract and it doesn’t discriminate. In the end, it is the easiest way to relieve the employment law headache.

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