EMPLOYMENT AT-WILL
INTRODUCTION
The recent riots in Paris provide us with a glimpse of the consequences of significant changes in employment practices in many states, including Ohio. The French protesters were objecting to a law which would have allowed employers to fire workers, under the age of 26, at any time during a two-year trial period without giving a reason. In other words, France’s youngest workers would be “at-will” employees. This limited “at-will” status stands in stark contrast to the law in most states, including Ohio, where most employment is “at-will” during the entire tenure with a company.
AT-WILL DEFINED
In an “at-will” relationship employers may legally terminate an employee at any time, with or without cause. This right can be restricted by contracts such as those given to senior executives, union members, college professors, and teachers. There are also safeguards given to most government employees. It is also illegal for any employer to fire (or discriminate against) an employee for reasons prohibited by law, such as race, religion, sex, age, color, creed, national origin, disability, veteran’s status — and in some states marital or parental status, gender preference, or smoking status. But, absent a contract or statutory prohibition, an employer may come to work one day and, for any reason or for no reason fire an employee.
TERMINATIONS – UNITED STATES
The “at-will” mantra of employers is rarely acted upon. First, it is costly to hire and fire, second, arbitrary firing is very bad for morale, and third, unless an employer clearly articulates a legitimate basis for the termination, employees often charge the employer with discrimination based on a prohibited reason.
Most enlightened American employers only fire on the basis of reasons directly related to the employee’s service. Typical “for cause” reasons include absenteeism, poor production (quality or quantity), chronic lateness, dishonesty, rudeness to customers, and insubordination. Other legitimate reasons may be the generally accepted needs of the business, such as downturns in sales, seasonality, loss of key clients, facility relocations, or sale of the company.
TERMINATIONS - FRANCE
In France the typical employment relationship is the reverse of the American one. Employees are not “at-will”. Employees are protected by laws and contracts making termination of employees very difficult, if not impossible, and very costly. This significant measure of job security for French employees is heavily supported by French law and unions. But essentially guaranteeing employees a job for life has negative consequences on the employer, the economy, and employment rates.
CONSEQUENCES OF LIFE-TIME EMPLOYMENT
Because hiring an employee in France results in quasi-life time employment employers are very cautions about adding new employees. Thus, faced with the choice of hiring an essentially untested youth for life, or experienced workers with a history and references, employers have been passing on the younger workers. As a result France has an unemployment rate for those under 26 of almost 25%; and among “minorities” the rate is nearly 50%.
A SOLUTION TO UNEMPLOYMENT
To deal with the problem of youth unemployment, French President Chirac proposed changing the nature of the employment relationship for those under 26 to something similar to the American “at will” relationship. New French employees — those with less than 2 years service — could be fired at will, no reasons required and no explanation given. Nor are extended separation benefits paid. The theory was that would make employers more willing to try out younger employers, because they would not be burdened with the employee for life if he or she did not work out.
FRANCE REACTS
The drastic nature of the proposal attracted the ire of French unions and student leaders, who protested that they deserved the same rights as all other Frenchmen. The result was demonstrations, strikes and some riots. The proposed law was withdrawn.
CONCLUSION
The tension between employee and employer over at-will employment is not easily resolved. In the United States, exceptions to at-will employment, founded on public policy, are increasing all the time. However, abolishing at-will entirely could result in squeezing out younger works in large numbers as incumbent employees who work longer and postpone retirement fill available jobs. The best approach for harmonizing the tension between employer and employee over at-will employment is to stress to employer the wisdom of terminations only for objectively measurable cause.