At-will employment and what it really means

By Brandy McAllister
AAC Risk Management Ligitation Counsel

Most employment in the state of Arkansas is at-will employment, which means that an employee can quit for any reason, or no reason at all, and that an employer can end the employment relationship for any reason, or no reason at all. Right? Close, but no cigar. What it really means is that an employer can end the employment relationship for any reason, or no reason at all, as long as they don’t do it for an illegal reason.

When an ex-employee files a lawsuit after being terminated, they will often claim they were fired because they were part of a protected class of people. Protected classes may include, but are not limited to, race, color, religion, sex, national origin, or disability status. It may also include an individual who has exercised a right under state or federal law that prohibits retaliation or discrimination. Examples of this may be employees who have recently taken time off under the Family Medical Leave Act, or more relevant now in an election year, an employee who has exercised a First Amendment right to free speech.

This does not mean that you cannot terminate an employee who is a different race than you, or who goes to a different church than you, or who campaigns for your opponent. What it means is you cannot terminate an employee because of these differences, or any other protected reason.

That brings us back to the most often asked question when someone calls for employment advice — “I thought we were at-will so why do I need a good reason to terminate?” Because we are always preparing for the eventual employment lawsuit or EEOC Charge that says you fired someone illegally. If you are faced with a charge of discrimination, and have to explain to a judge or a jury why you really fired that employee, explaining they were fired because you are an at-will employer and you did it because you can, isn’t going to win the case.

The jury in a case like that will hear two stories. They will hear the story from the fired employee, which is that you never really liked them, you picked on them, and eventually fired them, and it was all because of their protected status. Then they will hear the story from you, the employer, which is that they were fired because you just didn’t think they were a good fit and since they were an at-will employee that is a good enough reason. If that is the only reason you can give, it is highly unlikely that you will win the case.

This is why it is important to keep good documentation of employee performance that does not meet expectations. Performance can include the obvious category of work product, mistakes, ability to complete tasks, etc., but it also includes attendance and attitude. If you are repeatedly upset with an employee about something they are doing at work, that needs to be addressed with them, and documented by you.

When you regularly give feedback to your employees, whether good or bad, and you document those conversations, it creates a strong defense in any future employment claim that a termination decision was based on an employee’s protected class status. This is because you can now show the judge or jury a pattern of poor performance, or attitude, by the employee that eventually led to the separation.

Documentation comes in many forms. It can be a reminder email to an employee about expectations or policies. It can be a verbal coaching where you explain the errors and demonstrate through additional training how to improve. In the case of verbal conversations, be sure to send a follow up email, or make a note in their file regarding the date and topic of the conversation. It can also be a formal write up that states if the behavior or performance fails to improve there will be further discipline, up to and including termination. No matter what form the documentation takes, remember, it is a key piece to both helping employees perform to the maximum ability, and to defending future claims that a termination was discriminatory.

While employee performance issues will fall into specific categories, the facts are different in each case, so it is important to evaluate every situation independently before making a decision to terminate. Litigation is never fun, even when you win. It still causes stress and takes up valuable time, so remember, we are here to help talk through employee discipline and termination decisions and can help guide you to prevent lengthy litigation in the future.

This article should not be considered legal advice, but is general guidance. You should call our office to discuss employment issues prior to termination.