When it comes to running your business, employee relations is likely at the top of your list. But small business HR can be complicated, especially regarding legal and fair termination. Fortunately, there's something that clears things up and provides a bit of protection for you as an employer: the at-will employment doctrine.
What At-Will Employment Really Means
In a nutshell, at-will employment gives you the right to terminate employees at any time and for any reason, so long as it does not violate any law. While it may seem harsh, letting someone go without notice is sometimes necessary for the good of your company. Including an at-will statement when hiring someone allows you to exercise your freedoms and run your business however you choose.
The bad news? While all states but one (Montana) recognize the validity of at-will employment and generally side with employers in legal cases, a few seemingly innocent actions have the potential to negate the employee's at-will status.
But before we get into what to avoid, let's talk about the reasons you want to incorporate an at-will statement into your human resources hiring forms.
Benefits of Hiring Employees At-Will
Maintaining good employee relations is crucial for any business, but you also need to protect yourself and the organization you've diligently built. Hiring employees at-will is one method of doing this. Here are a few ways at-will employment benefits your business.
- It keeps you from getting stuck with a staff member who doesn't carry his or her weight.
- It gives you the freedom to downsize when necessary.
- It may protect you from legal action regarding wrongful termination.
As you can see, at-will employment is an important part of your plan for HR Solutions within your company. But, if you aren't careful, you'll quickly destroy any at-will defense you may have in a legal case against you.
Three Things That Can Negate Employees' At-Will Status
With human resources, knowing what not to do and say is just as vital as knowing what to do and say. Take a look at the following things to stay away from in order to protect your employees' at-will status.
- Employee handbooks with no at-will statement. This should be obvious, but many business owners often leave the at-will statement out of their handbooks and other HR forms. This is a huge mistake. Even if your workers don't sign a contract (or what you think is a contract), there's no guarantee that a court will allow you the at-will protection without a statement in writing.
- Casual phrases that promise long-term employment. It's tempting to say things like, "You'll always have a place with us" when an employee is doing a great job. This is especially true in small businesses, where staff members often become like family to one another. But be careful! A single, innocent remark often negates the at-will policy in cases brought before a judge.
- Policies and procedures that clearly define the termination process. Even with an at-will statement, some judges consider policies regarding the steps to be taken before employee termination to be binding contracts. If you state, for example, that two warnings will be given with a chance for improvement, but then fire someone after only one warning, then you're at risk for legal repercussions.
When considering HR solutions for your business's employee relations, remember to protect yourself with an at-will employment statement. Without it, you're subject to legal recourse and a whole lot of headaches.
Additionally, be sure to avoid friendly remarks that falsely promise employees protection from termination.
Margaret Jacoby, SPHR, is the founder and president of MJ Management Solutions, a human resources consulting firm that provides small businesses with a wide range of virtual and onsite HR solutions to meet their immediate and long-term needs. From ensuring legal compliance to writing customized employee handbooks to conducting sexual harassment training, businesses depend on our expertise and cost-effective human resources services to help them thrive. This article first appeared on the MJ Management Solutions blog.