Tech & Work

Protect yourself from the perils of at-will employment

The at-will provision allows companies to fire employees for any legal reason, offering little recourse for employees in such a situation. Here's more about this employment standard, along with some suggestions for working around this issue.


While many job seekers know that companies typically hire on an at-will basis, which allows companies to fire or layoff without legal repercussion, they may be wondering if there’s a way to avoid the at-will provision entirely.

The answer is pretty much no, according to attorneys and hiring experts. While there may have been some opportunity to do so during the dot-com days, when IT skills were viewed as scarce, the at-will provision is something companies are holding onto dearly these days.

What "at will" really means
Simply stated, at-will employment means employees can be fired for a good or a bad reason, or for no reason at all. If a reason is given, it can’t be discriminatory and it can’t be retaliatory, such as being fired for reporting illegal activities or unsafe conditions.

Termination can spring from any number of sources, such as production being moved to Brazil, or last quarter’s sagging sales translating into this quarter’s headcount reduction. Or it could be that a recently completed merger makes your department redundant and too expensive to operate.

“Just because it may seem unfair or stupid doesn’t mean it’s illegal,” explained Ann Kiernan, an attorney for FairMeasures Corp., in Santa Cruz, CA.

And it’s important to remember that at-will employment cuts both ways.

“You’re always free to leave, and they’re free to fire you,” Kiernan said, adding, “The employment part of at-will is easy—it’s the termination part that’s tough.”

Little recourse for employees
The laws that permit hiring and firing at will for the most part favor the employer. And there’s little that job candidates can do to protect themselves against the whims of the market and the pitfalls of at-will employment—unless they live in Montana.

Montana is the only state that affords any protection against at-will employment, according to Kiernan. In Montana, no employee who’s successfully completed the probationary period can be fired without cause. The Montana statute has been on the books for more than a decade, yet no other state government or other law-making body has rushed to pick up its language or intent as a blueprint for new legislation.

Few chances to skirt the at-will provision
Conventional job-search wisdom says candidates should try to negotiate a contract upfront that specifies employment time and protects the employee in case of the unforeseeable.

But in a shaky economy, that’s not very plausible. The leverage IT professionals enjoyed during the dot.com heyday and mad hiring rushes is pretty much gone. Today IT is a highly volatile sector where fortunes change greatly from quarter to quarter.

“There is a great deal of unpredictability, so employers are going to want maximum flexibility in regards to staffing,” explained Robert Stewart, a management labor attorney for Dilworth Paxson LLP in Philadelphia. “You’re going to find a lot of reluctance on the employers’ part to commit to anything like a contract that takes them out of the at-will employment rules.”

In fact, at-will employment isn’t the only thing that employers are less flexible about in the hiring process, thanks to the current economic situation.

“Supply is outstripping demand for talent and employers have a lot more options,” said Robert Fodge, president of PowerBrokers LLC, a professional recruiting company in Newark, DE. “They don’t have to provide the perks on the front end, like guaranteed employment, severance packages, or golden parachutes.”

Other alternatives to consider
If a contract is out of the question, a job candidate might broach severance terms as part of the hiring negotiations—the workplace equivalent of a prenuptial agreement, Stewart explained.

“It’s where you try to anticipate and work out the terms of divorce ahead of time,” he said, adding that severance is generally not offered to anyone dismissed for cause, like theft, negligence, or incompetence. “And keep in mind that severance won’t be so rich for those employees who are terminated for economic reasons.”

The slump in spending on IT goods and services coupled with the oversupply of highly skilled IT professionals puts job candidates at a disadvantage. “It puts the burden on the candidates to do their homework and carefully research the organization,” Fodge said.

Fodge encourages applicants to examine prospective employers’ hiring and firing cycles and to decipher a company’s overall “forward-thinking” strategy. And it’s critical to probe these questions with as many company representatives as possible during the interviewing process, Fodge added.

“It’s a difficult market right now, and about the only protection a candidate’s going to get is the ease of mind from having done his or her homework,” said Fodge.

Fodge also encourages IT job candidates to concentrate more on smaller companies—those with 10,000 people or less. “Smaller companies don’t hire and fire as quickly,” he said. Larger companies’ needs change more dramatically on a quarterly basis. So while they tend to offer better compensation, a job at a larger company may not mitigate the risk of job security,” Fodge said.

In the end, an informed employee is a more powerful employee, Kiernan said.

“The best protection is to know the employer’s policies and the company handbook,” which is a contract in itself, she said. “Keep a journal of meetings and conversations if you’re worried about illegal conditions.”

And if you’re not quite ready to move to Billings, MO, then remain undeterred from the belief that the job market will improve, reducing the perils of at-will employment.

 

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