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Friday, April 6, 2012

A Simple Solution To Unjust At-Will Laws

Most employers can fire you for any reason or no reason at all. As I say in my upcoming book, that means they can fire you because they didn’t like your shoes that day. Or, as it turns out, the color of your shirt.

The law definitely needs to change. This appalling situation could happen to anyone. In all but one state (Montana) you can be fired because your boss didn’t like your shirt or your shoes that day or because they’re in a bad mood. And in this country, unlike most civilized countries, our health insurance is tied to our jobs. So you can lose both your job and health insurance coverage for your family and yourself, all because your boss was in a bad mood.

Then, to add insult to injury, our tax dollars pay for the cost of unemployment compensation and the side-effects of unemployment, all because your boss had a hissy fit one day and fired you without just cause.

I would suggest that there’s a solution that might help alleviate some of the huge societal burden, as well as the burden on individuals, that is cause by the reality of at-will employment. Every state in the nation already has a set of hearing examiners or referees who hear unemployment cases. If the employee is fired for misconduct, they don’t get to collect. But what about the employer who fires without just cause? Why not give the unemployment hearing officers one more power: the power to reinstate with back pay.

Why should taxpayers have to pay because someone was in a bad mood and fired an employee? Why shouldn’t they have to pay for their own folly? If they don’t want to reinstate, then they can pay the employee’s full salary for the entire length of time they would have collected unemployment.

So, constant readers, tell me. Why won’t this work? Why shouldn’t we impose as much burden on employers who terminate without just cause as we impose on employees who are fired for misconduct?

If you like my solution, tell your state legislators and members of Congress. If you think I'm wrong, gripe away. I'd love to hear from you.

18 comments:

  1. Donna, I started writing a response as a comment, but got so fired up, I opted to write my response as a post on my blog. Tune in Monday morning.

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  2. Wow, I think this is an awful idea. You (through the state) would force an employer to retain an employee it doesn't want because *you* think that preference is unreasonable? Where does that end? This would be a catastrophic policy for both employers and the employees who simply would never be hired in the first place.

    If your concern is truly related to preserving health insurance for employees, then the solution is to unbundle insurance and employment, not bind employers to their employees against their will. There are lots of ways to accomplish this--including ones which DON'T entail European-style socialized medicine, if that's not your thing.

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    1. No, the employer must provide just cause and show that he went through steps to work with an employee. An employer cannot fire you for the color of your shirt or what you do outside of work, but if your work duties are not being met, you are given written,verbal warnings, suspensions, and eventually terminated. But the burden is on the Employer to provide proof for grounds of termination.

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  3. Jon, I look forward to it. Jeff, thanks for your views. We'll probably never see eye to eye, but I appreciate your taking the time to comment.

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  4. Because what is "just cause"? What if you're slower than the other people. Is that good enough? What if you whine throughout the day--still get your work done, but annoy the snot out of the rest of the company? What if your sleazy boyfriend hangs out at the front of the store all day, waiting for you and intimidating little old ladies? Are all those reasons just cause?

    What about if you lay someone off for financial reasons? Will this court look at the boss's new swimming pool and determine that he could have kept on the employee if only he hadn't bought the pool, therefore it wasn't a just termination?

    I totally agree with separating employment from health insurance, but that's the end of our agreement.

    The reality is most people don't fire their employees because they don't care for their shoes. In the orange shirt case (which you are involved in) you said yourself that there was more to it than the color of the employees' shirts.

    The last thing we need is more restrictions on who a company can fire. The harder it is to fire, the less likely people are to hire. It becomes a bigger risk. If we had lower unemployment, getting fired wouldn't be a big deal because you could find a new job quickly. We want to make it as easy as possible for employers to hire--which means it needs to be easy to fire.

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    1. If you are slower than others, you are given written, verbal warnings, suspension, and eventually termination. The employer should be able to provide evidence that you are slower than other employees (production rates).

      If you whine through out the day, and others tell you to stop, it can be seen as harassment or impeding the workflow environment. Again you will be written up, and given time off before being terminated.

      If your sleezy boyfriend hangs out in front of a store all day, he should be warned to leave, and police should be called to handle the matter, as that can be seen as loitering/harassment.

      If the boss is buying things with company money outside of his own pay, and lays off loyal employees to compensate for that, he may also have to compensate that employees as well. Yes, this law does make employers answerable to employees through a hiring contract that says they will not fire an employee without justifiable reason.

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  5. Suzanne, the reason I use the term "just cause" is because there's a whole body of case law on what it is. Between labor law where union contracts require "just cause" terminations and Montana, which has a state "just cause" law, there's no need to guess.

    I'm not saying employers shouldn't be able to fire anyone they want if they're in a bad mood (at least, not here). I'm just saying I shouldn't have my taxes go up as a result. The employer who fires without just cause should face consequences.

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    1. Yes, but in all the situations I've mentioned, the employee would be granted unemployment. (At least in my experience.) So if it's determined that the employee did "nothing" to cause the job loss, what's to stop the expansion of this to cover all the above situations?

      Montana is a very small (population-wise) state with a different culture than, say, Florida.

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  6. Donna,
    an employer/employee relationship is not the same as a parent/ child relationship. they both entered into that relationship on a mutual voluntary and consensual basis. upon agreement the employer agreed to pay a salary or wages for labor performed along with any benefits as agreed upon while that person was employed.

    given this, both can terminate that relationship at will with neither one having any obligation to the other upon termination by the decision of either party. to declare that an employer has an obligation once that relationship is terminated is unjust. the only exception would be if such an obligation was the result of a contract.

    an employee has no such obligation as a result of his terminating of the relationship by quitting his job so why should an employer? when you think about it an employee "quitting" is the same as if saying that he has fired his employer and he needs no just cause in order to quit.

    that creates a relationship of "equality"

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  7. And the employee who quits for no reason doesn't get unemployment. So why should my taxes go to pay for an employer who fired someone because they were in a bad mood?

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  8. your tax dollar does not pay for an employer who fired someone. your tax dollar pays for an employee because he does not have a job and more than likely did not create an emergency fund to cover this situation. that is your government at work spending your tax dollar not his employer.

    place blame for the spending of your tax dollar where it belongs, on government politicians who created this law to buy votes for themselves. to say otherwise is to declare that politicians are "altruists"

    remember, an employee is hired for one reason only, to create additional profit for a business. that employer is not hiring him for altruistic reasons.

    and if an employer fires someone who is an asset to that company then that business suffers too. the two most obvious things is the loss of profit that the employee was earning for the company as well as the costs of hiring a replacement.

    is an employee responsible for the loss of profits that results or the additional costs to that employer for the training of the new employee needed to replace him when he quits because he is in a bad mood?

    it is the business, itself, that becomes the victim for the foolish acts of either person. and your solution only makes that business even more of a victim.

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    1. Your tax dollar doin fact pay if employers across the board decide to fire people based on the shirt they wear, whether they smoke outside of work, etc. If these people cannot quickly find re-employment, the economy suffers as a whole.

      An employee is hired to be a contributing member of society, so that man can evolve and continue to grow, not only to create profits for a businesses own greed.

      The employer does not suffer as much as an employee in the situation where it "fires" someone. It may if someone "quits", but that is where just cause also benefits the employer.

      No employee is responsible for a business's losses in the case of him "quitting", anymore than an employer should continue to pay a "fired" employee until he finds another job.

      Many people's lives now are the victims of a businesses foolish acts, this law would only put them on equal terms.

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  9. I posted this comment in response to Jon Hyman's blog http://www.ohioemployerlawblog.com/2012/04/get-rid-of-at-will-employment-give-me.html#disqus_thread where he objects to the abolition of at-will laws. Thought I'd also share it here:

    What is "just cause?" It's an established legal term of art from years of union cases and Montana cases. http://www.opeiu8.org/Local8MemberResources/LeadershipStewardHandbook/JustCauseDefined/tabid/249/Default.aspx There would be no confusion. As to taxpayers footing the bill, Jon, I asked the question why my taxes should go up just because someone was in a bad mood? Believe it or not, Jon, I'm an employer. My taxes do go up every time an employer fires someone because they didn't like the color of their shirt. All taxpayers bear the cost of lost insurance when we end up footing the medical bills.

    The same arguments were used when Montana passed America's only just cause bill. The sky didn't fall when they did: http://www.acslaw.org/files/Roseman%20Issue%20Brief_0.pdf Instead, the opposite happened: unemployment rates fell. Job growth in Montana paralleled that of its neighboring states. The conclusion of the empirical study of Montana's just cause law?: "Employees do not risk losing their jobs as a result of gaining greater job protections. Employers do not put themselves at a competitive disadvantage by legislation that protects their employees from arbitrary and unfair discharge decisions. The twin bogeymen of higher unemployment and lower job-growth rates should not shape the public policy debate on the abolition of the doctrine of employment at will."


    Just cause is the law in most advanced industrialized countries. Europe, Japan, Canada, even most of South America give employees some rights when fired. Indeed, most executives build just cause into their own contracts. Wouldn't want to be fired for wearing the wrong shirt, would they?

    We recognize the importance of jobs when it comes to government employees. Civil service jobs are considered "property" that can't be taken away without due process.

    I don't think it's much to ask that employers think twice and document problems before they terminate. Firing someone because you didn't like the color of their shirts that day or because you were in a bad mood is just plain wrong.

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  10. I think it's bizarre to think that an outside agent can possibly be in a better position than the actual people involved to know and understand the relevant facts to determine whether or not a given termination is arbitrary or unfair. It's actually costly for employers to fire, or even lay off, productive employees. They don't want to terminate productive employees just to have to go through the search, training, and accommodation process again with a new person.

    Just because the law has a prescribed mechanism to determine whether or not a particular firing was "just" for those cases for which it is obliged to make such a ruling doesn't mean that it would be wise to vastly expand the number of cases.

    The example of the unemployment case hearing board is flawed in one crucial aspect: it actually is (or can be) profitable for an employee to quit (or intentionally get himself fired) to collect unemployment insurance for a while. The existence of the unemployment insurance system makes the board necessary.

    It isn't profitable for an employer to fire a productive employee. (By definition a productive employee is profitable. This isn't a moral judgment about the person involved. Employees can become "unproductive" because there isn't enough business anymore.)

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  11. Scott, I don't know why the same board that determines whether or not employees quit without cause or were fired for misconduct can't also determine that an employer fired without cause. Goose/gander. Employees who quit without cause attributable to the employer are disqualified from collecting. Employers who fire without cause should have to bear the brunt of their bad mood decision. "Productive" employees get fired all the time for no reason other than a bad mood. I hear nightmare stories all the time: fired because the employer didn't like their shoes, etc. Nobody should have to bear the tax burden for such a firing other than the employer. Maybe then they'll think twice before firing someone just because they can.

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  12. "Why not give the unemployment hearing officers one more power: the power to reinstate with back pay."

    While I agree with you that at will employment is largley an oppressive instrument that corporations can use to cover acts of petty feudal lord wannabes,or more often blatant greed in the form of cuts to increase profits by a marginal fraction, I disagree with the solution. As I understand it (I'm a 30yr old student who's gone back to college on the GI Bill as an alternative to unemployment, so I'm not exactly an expert in employment law, except as the recipient of some nasty and unnecessary lay-offs)companies must pay into a pool of money for unempoloyment insurance. I think the board should be able to mandate that the company who fired an employee without just cause (as opposed to financially motiviated and for cause terminiation) fully subsidize the unemployment insurance benefits paid to that employee, including any authroized extensions, and fully subsidize medidcal benefits at the same level for the same period of unemployment. This would create an immediate, tangible, and quantifiable consequence to employers who fire without just cause. (For things like lay offs, cut backs, etc, normal unemployment rates would apply.)This would minimize the tax burden on wasteful firing, minimize the occurene of these events, and would avoid the propblems associated with mandating an employee be allowed to return to work, becuase of the specter of retaliation and loss of trust. Just a few thoughts from the short end of the stick, and I love your blog =D

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  13. I like your solution, CLH! I'd like it even more if unemployment compensation came even close to being a living wage. We're way at the bottom of industrialized nations in the percentage of wages we compensate through unemployment. Most people can't get by. And there's still the insurance problem. If you're getting $275 a week in unemployment you can't afford to pay the $1000/month COBRA payments. Taxpayers will have to eat their health costs, which are astronomical. I'm so glad you enjoy my blog!

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  14. I remember the days when there was job security, particularly if you had seniority. That was kind of your protection. Now, it didn't mean that you could come to work and sleep at your desk all day just because you had a certain amount of time in, but it did mean that seniority counted for something. You had respect for your work ethic for staying at the same job for so long. Nowadays, you can be fired because your boss has a hissy fit or is in a snarky mood or is just feeling peevish and wants to get rid of you. It's so grossly unfair and it's costing the American taxpayer big time. It's adding to our anemic economic recovery (recovery? WHAT recovery, I ask you?) because more and more companies are shutting their doors, laying off their employees who are then forced to file for unemployment compensation, COBRA and in some cases, welfare and/or food stamps. It's wasteful to fire people just because you're in a bad mood or some other ridiculous thing, especially if you're the senior person in your department, never missed a day of work, came to work early, bought the coffee supplies for the office, made the coffee every morning and put in a full day's work on top of it.

    I think that "at will employment" is egregious and should be repealed. Reasons for firing should be things like theft, assault, malfeasance, not showing up to work, constantly being late, being rude and nasty to people - that's the kind of thing that I was taught were the kinds of offences for which you could and should be fired. But then, there are two kinds of people, bosses and leaders. Bosses criticize and correct, leaders inspire and motivate. Sadly, most of us have been stuck working for bosses as opposed to leaders, of which there are far and few between.

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