Legal Guide

Labor Law Questions

Q. Can an employee be fired without a good reason?

A. Most employees in New Jersey are what is called "employees at-will" meaning that they can be fired (let go) without the employer providing any proof of bad work performance or other good reason for the firing. But, even at-will employees cannot be fired for what is called illegal reasons, such as discrimination, retaliation for whistle blowing, or violations of public policy. Also, an employer can violate the law if it has wrongly classified an employee as "at-will" when the employee has protection because he or she is covered by a contract, by consistent practices of the employer, or by a law which gives him or her tenure in the job.

Q. What is employment at-will?

A. Employment at-will is the standard status for employees, as opposed to employees who are protected by contract or law from being fired without a good reason. This status derives from the origins of employment law, which started from the master/servant relationship where the employer (master) had almost absolute authority over the employee (servant). Since then, the law has imposed limits on the employer's authority by prohibiting actions motivated by illegal reasons like discrimination, or actions that violate important social norms/public policy. But, unless the employee can prove the employer acted for illegal reasons, the employer does not have to even prove there were good reasons for the firing because it has the right to terminate an employee for no reason or even because of a mistake.

As an example, generally at-will employees can be fired because of a personality conflict with a difficult boss; however, employees protected by tenure rights could not be fired for such a reason, unless the employer could show a good reason for the firing. Because each situation is fact sensitive, no guide can discuss all of the possible defenses or claims; nor can this, or any other guide, tell you what to do in your particular situation.

Q. How can you tell if an employee has more protections than an at-will employee?

A. Employees who have tenure rights under which an employer must have good cause to fire, demote, or take disciplinary actions against the employee generally receive such protection from statutes, from court decisions, or from contracts. Examples of employees protected by statutes are those covered by Civil Service laws, such as government employees who acquire such protections through a Civil Service system. Employees who are covered by union contracts generally will have such tenure rights as union contracts require employees to prove good cause for discipline and provide for a grievance process ending in arbitration before an impartial arbitrator.

Non-union employees in the private sector can achieve tenure rights by (1) signing an individual employment agreement containing such protections; (2) working for a company which has a policy manual that makes promises of job security after, for example, a probationary period. or (3) working for an employer that has established through consistent practice a policy, which employees will retain their jobs so long as their performance is good. Each practice, policy, or agreement must be interpreted in light of the facts to determine whether it has transformed an at-will employee to one who cannot be fired without good cause.

Generally, apart from those government employees or union employees who are covered by statutes or contracts granting such tenure, most private sector employees do not have tenure rights. However, there are court decisions which have expanded protections and so a company's employment manual, or its policies and practices may offer employees job security in exchange for continued good performance. Moreover, even without such job security, employees cannot be discriminated against or retaliated against in violation of the law, but an employee who has tenure rights puts the burden of proving good cause on the employer.

Q. What protection does an employee who is at-will have from discrimination, retaliation, or "illegal" reasons for firing?

A. The civil rights laws, laws protecting whistle-blowers, and court decisions interpreting public policy can supersede at-will status. An employer may not be able to effectively rebut such a claim without some proof of a reason for its action, but the employee still must show an illegal motive for the action.

The civil rights laws hold that employees cannot be fired because of status, such as age, sex, disability, religious belief, race, or national origin. These laws protect an employee when he or she can prove the decision is motivated by the employee's status, not by his or her skills or performance, or other bona fide reasons.

The whistle-blower laws and court decisions also prohibit retaliation against an employee who discloses, or threatens to disclose, illegal activities, or who acts as required by laws or regulations, such as enforcing safety ordinances. Whistle-blower claims include those by employees who assert they were fired for complaining to an agency or threatening to complain. The so-called public policy-based actions rely upon statutes and court decisions prohibiting an employer from acting in violation of certain public norms. For example, an employee cannot be fired simply because he or she filed a workers' compensation petition, refused to take a job-related polygraph test, or refused an illegal drug test. In these types of situations, courts have held such actions violate public policy.

These are but some of the potential claims that courts have held exist to challenge a firing of even an at-will employee. The facts of each situation are different and each claim and situation must be reviewed individually. However, because the underlying status of the employee is "at-will" he or she must show the firing is not illegally motivated. If he or she cannot, then an at-will employee can be fired without being given a good reason and without any documented reason.

Szaferman, Lakind, Blumstein, & Blader, P.C.
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