Which is better…at-will or for cause?

In representing tribes and enterprises in court, the issue of at-will employment is frequently a factor in my cases and a recent case for a tribe generates my interest in this topic.  In court, I like employment at-will because it makes my job easier and protects my tribal employer.

Your employees like the for cause standard because it makes it more difficult for you to terminate them and it increases your exposure to liability.  The potential for more liability makes you hesitate before terminating an employee.  Deliberation before terminating an employee is always a good idea however the fear of risk (liability) sometimes keeps employers from terminating non performers which is a drag on our organizations. Resources should be allocated to their most useful purpose and sometimes employees are not in a job they do well.  The for cause standard makes it more difficult to reallocate that human resource to a more productive position within the organization or at another employer.

Is there a middle ground between the views held by legal counsel and devoted employees?  In other words is there middle ground between employment at-will and the for cause standard?

Yes.

At-will employment creates a low threshold for employees and employers to end the employment relationship.  Employees can leave you without any reason and employers can discharge employees for any reason unless it violates the law or employer policy.

For cause or just cause employment rearranges the employment relationship for the employer which now needs a reason to terminate an employee.  In a for cause system, the reasons for termination are defined by the employer and again the termination must be consistent with the law.  Still, the employee does not need a reason to terminate the employment relationship and unless the employee is contractually obligated to a specific term, the employee is free to walk away whether the employee has a good reason or not.  Think about it this way, the employee can always terminate the employer at-will.

As the definitions reveal, these are two policies which define the standard for employment termination. The at-will doctrine creates a low standard to termination and the just cause doctrine creates a higher standard.

Tribal employers may adopt either, both or no standard.

What about the middle ground referenced above?

Tribal employers may, through law and policy, have the best of the at-will and for cause standards. By implementing the at-will standard in the policy manual or employee handbook, the legal standard for termination is a low standard. The at-will standard is implemented as a shield against liability.

Here is the hard part…After defining the legal standard as an at-will relationship, the employer should promulgate numerous policies and practices which give employees multiple opportunities to find success in the workplace. Those policies and procedures include, but are not limited to, progressive discipline, employee advocates, meaningful due process and  training. Importantly, a comprehensive approach in designing a system which does not contradict itself is critical to the success of balancing employee rights and the mitigation of employer risk.  Said another way, if you create a system which balances the employers and employees’ interests by integrating the best aspects of at-will and for cause employment, draft your policies in a consistent and coherent manner.

A typical example of consistency and coherence in drafting policy is defining a progressive discipline policy which is aligned with the at-will policy.  If the progressive discipline policy is not aligned with the at-will policy, a court may declare that the employer diluted the at-will liability shield and failed to meet the standard for terminating an employee.

Now, here is the key to successfully integrating the at-will standard while at the same time treating your employees fairly.  Take the at-will conversation away from your managers and supervisors by forcing them to focus on managing employees.  Good management does not involve threatening employees with at-will termination if the employee fails to jump through hoops 1, 2 and 3.  Since at-will is not a management tool, take it out of the manager’s toolbox.  Instead, your managers should be focused on sound management techniques and practices which inspire employees to achieve. Inspiring employees to achieve tangible results leaves little time to threaten them with at-will termination.

Recommendation:  Your time is better spent enriching your employees than it is fighting with former employees at the courthouse.  By drafting consistent and coherent policies, the risk of a court challenge is reduced.

About the Author:

Richard McGee is a lawyer in Minneapolis, Minnesota who focuses his practice on gaming, gaming regulation, tribal employment and litigation in tribal, state and federal courts.  Richard has the privilege of working with tribes and tribal organizations on Human Resources matters including training.  Additionally, tribes ask Richard to address specific topics while incorporating the tribe’s related laws and policies into the sessions.  This is an invitation to engage Richard to produce and facilitate training for your tribe.