Employment Law Basics

Welcome to Coffee Bistro The Coffee Bistro scenario gives you an opportunity to set the stage for the class. You may distribute a printed copy of the Coffee Bistro scenario to the students to read while class is getting organized or you could read the scenario to the class. ©SHRM 2008

At Coffee Bistro Can David really fire Ryan? What about just “squeezing” him out of a job? What’s HR’s responsibility here? At this point, students probably aren’t sure what rights David has for his behavior or what rights Ryan has to protect his job. Whether Coffee Bistro is a part of a large conglomerate of coffee shops or a single coffee stand, there is someone in the organization taking care of the HR function. This gives students an opportunity to generate some ideas as to the responsibilities of the HR function in an organization. What role might HR play in this scenario at Coffee Bistro? ©SHRM 2008

Employment Law Basics Employment-at-Will Doctrine An unwritten contract created in the employer/employee relationship. No agreement exists defining how long the employment relationship will last. Either the employer or the employee can terminate employment at any time. The employer can terminate with cause, without cause, or for no cause. Explain the origins of employment at will in early English agrarian society (see teaching notes). The employment-at-will doctrine makes the assumption that when there is no written contract specifying the length of the employment relationship, either the employer or the employee can terminate the relationship whenever he or she chooses. Strict interpretation of this concept gives the employer a lot of latitude to terminate an employee, whether or not there is good reason for termination. ©SHRM 2008

Exceptions to the Employment-at-Will Doctrine Public policy. Breach of implied covenant of good faith and fair dealing. Tort actions – constructive discharge. There are three main exceptions to the employer’s right to terminate an employee at will. Violation of public policy is the most common exception to the employment-at-will doctrine. The public policy exception prohibits an employer from terminating a worker for a reason that would violate basic social rights, duties or responsibilities. Please see instructor’s notes for examples. The courts generally see the employer/employee relationship as an implied contract, and as with all contracts, assumes there will be good faith and fair dealing among the parties involved. It is reasonable to expect the same behavior in the workplace. When an employee is treated poorly or unfairly by the employer and then terminated, the employee may claim the employer’s action was in violation of the covenant of good faith and fair dealing. When an employer treats an employee so poorly that the employee is unable to be successful in his or her job, the employee may quit, resulting in constructive discharge. Constructive discharge is considered an involuntary act because it occurs when the employee is given no reasonable alternative but to terminate their employment relationship. The end result is often a civil suit filed against the employer by the employee. ©SHRM 2008

Exceptions to Employment-at-Will Doctrine An employer cannot terminate an employee for: Refusing to carry out an illegal activity. Exercising a legal right. For example, filing a workers’ compensation claim. Performing a legal duty. For example, serving on jury duty. Whistleblowing (reporting the employer’s wrongdoing). These are all examples of actions that would be considered a violation of the employment-at-will doctrine and would likely result in a wrongful discharge claim against the employer. ©SHRM 2008