At the outset of any employment relationship, employers must decide if the employee is being hired on an at-will basis or not. The default rule in New York is at-will employment. What is at-will employment? “At-will employment” means that employers can terminate the employment relationship at any time, for any reason, or for no reason. By the same token, an at-will employee can resign their employment at any time, for any reason, or no reason. All employees are assumed to be “at-will” unless there is a contract specifying otherwise, such as a collective bargaining agreement or an employment agreement.
Limits to the At-Will Doctrine
For the vast majority of employees who do not have employment contracts, the at-will employment relationship may seem harsh. However, there are limits to at-will employment. Anti-discrimination laws on the federal, state, and local level protect at-will employees who have been discriminated against. These types of employment laws prohibit employers from taking adverse employment actions – such as failing to hire, firing, or demoting – against employees and applicants based on their membership in a protected class.
New York anti-discrimination law is broader than its federal counterparts. The following are some of the protected classes established by New York law:
- National origin,
- Mental or physical disability,
- Gender identity or expression,
- Military status, and
- Sexual orientation.
Discrimination is an exception to the at-will doctrine, as is retaliation and interference with an employee’s protected rights (such as paid sick leave or workers’ compensation). At-will employees who are terminated for one of these reasons may bring a legal claim against their employer.
Changes in Terms of Employment
The at-will employment relationship is the default rule in New York, but it can be modified by an express contract. For example, an employment contract can specify the length of the employer-employee relationship. Many companies choose to “lock in” an employee for a set period of time in order to recoup the time and money they have spent on providing training to the employee. Other employment agreements specify that the employer can only terminate the employee “for cause.” What is for cause termination? What constitutes “cause” for termination is decided upon by the parties before they enter into the contract. It generally includes serious offenses and not simply poor performance. Any termination that is outside the bounds of the contract or unlawful can subject the employer to liability.
New York also recognizes the idea of an implied contract. What is an implied contract? Generally, an implied contract is a legally binding obligation that can arise out of the actions, conduct, or circumstances of one or more parties in an agreement. Implied contracts can arise inadvertently through, for example, poorly drafted handbooks and workplace policies. Employers who want to maintain an at-will relationship with their employees should explicitly preserve that status in writing to each employee. Employers can do so by including a disclaimer in their workplace policies and in employment handbooks. Not making it clear to employees that the relationship is at-will puts employers at risk of creating more employment rights for their employees. In one case, for example, the New York Court of Appeals found that the default “at will” rule did not matter because the “totality of the circumstances” established that the employee had an implied employment contract that could only be terminated for cause.1
New York City has recently passed legislation that changes the status of certain fast-food workers, making them terminable for cause only. In other words, the default rule for the covered employees under that legislation is that they are not “at-will” employees and that they can only be terminated through a process specifically outlined in the law.2
Employers need to be aware of what kinds of employment relationships they create when hiring. The at-will relationship provides the least amount of risk for employers, however inadvertent actions – such as poorly drafted policies and handbooks – as well as changes in the law can modify those relationships. That is why it is important for a business to have a strong legal team by its side. The Labor & Employment Division at KI Legal has the knowledge and expertise to counsel your business on the important intricacies of labor and employment law, and to develop strategies to keep your business compliant. For help navigating labor and employment considerations, or to discuss your particular employment issue, contact KI Legal’s knowledgeable labor & employment attorneys by calling (212) 404-8644 or emailing email@example.com.
 Weiner v. McGraw-Hill, Inc., 457 N.Y.S.2d 193 (1982).
 For more information on this, please see The Employment Relationship in NY: Just Cause and Wrongful Discharge
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