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At Will Employment...What does it mean? How does it affect me as an employer or employee?¹

Most of you have probably heard the phrase "at will employment" and wondered what does that mean to my company or to me? Unless you are in the public sector, or have a written employment contract, the employment relationship is probably "at will". In simplest terms, that means that either the employer or employee is free to terminate employment at any time with or without cause. An employee may quit to take another job at any time. This can be done without fear of incurring liability for inconvenience or disruption to the business. Likewise, absent improper motives or other statutory prohibition,² an employer may terminate an employee without incurring legal liability under Virginia law.

Of course, as with any rule, there are exceptions. Depending upon the size of the company, there are a number of federal laws governing employment and an employer's right to terminate an employee without cause. In general, if the employer has fewer than 15 employees, the employee is not covered by federal legislation. This legislation includes: the Civil Rights Acts, the Americans with Disabilities Act, the Age Discrimination in Employment Act and the Family and Medical Leave Act, among others.³

In 1985 the Virginia Supreme Court decided the case of Bowman v. State Bank of Keysville. Until then, the doctrine of employment at will in Virginia has been applied by Virginia courts almost without exception. In this case, the court found that two bank employees had been wrongfully discharged. They were discharged for their refusal to vote their stock, in the small community bank, in favor of a proposed merger. The court ruled that the employees had a right to vote their stock without fear of reprisal. Therefore, a retaliatory discharge based upon their exercise of that right, was against public policy and illegal.

Over the years, the courts began to find more public policy exceptions to employment at will. Federal discrimination and harassment protection was growing. In Virginia, laws grounded in the Virginia Human Rights Act (which prevents discrimination or harassment based upon race, color, religion, gender, age, marital status, disability and national origin) were also developed. These cases were referred to as "Lockhart claims" after the case of Lockhart v. Commonwealth Education Systems Corp. In this case, the Virginia Supreme Court held that the Virginia Human Rights Act articulated a public policy and that violating it would support a claim for wrongful discharge. The court reached this result in spite of the fact that the terms of the Act provided that it was not to be construed to create an individual cause of action!

Thereafter, "Bowman-Lockhart" public policy exceptions to employment at will became the legal basis for aggrieved employees to seek damages under Virginia laws. If an employee can identify a Virginia public policy which an employer has violated, (that resulted in an adverse employment action against the employee) the employee has a viable claim for damages, whether or not the action resulted in termination.

In 1995, reacting to the Lockhart decision, the General Assembly amended the Human Rights Act to limit the remedies available for wrongful termination, under Virginia law. In companies with fewer than 15 employees, recovery is limited to no more than 1 year's salary and an award of attorney's fees.⁴

Last Fall a unanimous Virginia Supreme Court decided the case of Doss v. Jamco. They ruled that the General Assembly had meant exactly what it said in the amendments to the Human Rights Act. The only action for wrongful termination available for employees under the Act was limited to employers who had more than 5 and fewer than 15 employees.

There are other potential remedies under Virginia law for employees who believe they have been wrongfully terminated. However, there still must be an articulated public policy set forth in a specific Virginia statute to establish a Bowman public policy claim. Cases deciding which statutes articulate such a policy have been very narrowly construed. This has been done both by the Virginia courts and federal courts construing Virginia law. Other common law remedies that may provide relief to a terminated employee require additional factual grounds. These grounds may include: defamation, assault and battery and intentional infliction of emotional distress. These actions generally have more stringent proof requirements including proof of intent, which can be difficult to meet. Moreover, sexual harassment and other discrimination claims under the Virginia Human Rights Act may now be limited to only those resulting in termination. Many Virginia courts are deciding that an employee who quits, rather than continue to be subject to harassment or discrimination, has no remedy. This applies to all those who work for a company with fewer than 15 employees.

The General Assembly has tried to strike a balance between the rights of employees to work without discrimination and harassment, and the concerns of employers, when adopting amendments to the Virginia Human Rights Act. The harsh reality is that even a meritless claim can be time consuming and expensive for an employer to defend.

Employment at will remains the general rule under Virginia law. Bowman public policy claims are now much more difficult to establish. This is because a statutory public policy, other than that stated in the Virginia Human Rights Act must be found to support such a claim. After the Doss ruling, it appears that employers have regained the upper hand. However, creative lawyers representing aggrieved employees will continue to seek public policy exceptions to provide remedies for adverse employment actions against otherwise at will employees.

¹ This article is not intended as legal advice, and should not be construed as legal advice, but only as a general background for understanding the concept of employment at will and related employment actions.

² Virginia statutes prevent termination of an employee for, among other things, filing a workers' compensation claim, excessive absence due to workers' compensation injury, filing of one garnishment, union membership or refusal to join a union, etc.

³ Applicability of these and similar acts are governed by a number of factors including a threshold number of employees. The specific provisions of the acts and other similar federal legislation are beyond the scope of this article. If you have questions about any employment decision, you should consult competent employment counsel.

⁴ Because employment cases are generally very expensive to litigate, an award of attorney's fees may exceed the damages and employee can hope to recover. However, recovery of attorney's fees under the Human Rights Act is limited to twenty-five percent of the back pay award.