What is employment at will?
Texas, and 48 other states, adheres to the presumption of at-will employment, and has done so for more than 100 years. The general at-will rule is that, absent a specific agreement to the contrary, employment may be modified or terminated by the employer, or the employee, at will. As a general rule, employment for an indefinite term is presumed to be employment at will.
This means an employer may discharge an employee for good cause, bad cause, or no cause at all, as long as it does not violate the law. For example, state and federal law prohibit discrimination and retaliation, so employers cannot terminate an employee based on his or her gender, race, age, national origin, color, or religion, or for opposing an unlawful employment practice. Texas therefore does not recognize a claim for wrongful termination in the absence of an employment contract or statute.
However, this presumption does not preclude employers and employees from forming subsequent contracts limiting an employer’s right to discharge an employee, so long as neither party relies on continued employment as the consideration for the contract. Thus, despite the at-will presumption, employers may nonetheless restrict their ability to discharge employees by expressly providing for employment for a specific period of time, for example, or by limiting any terminations to those for good or just cause.
This means an employer may discharge an employee for good cause, bad cause, or no cause at all, as long as it does not violate the law. For example, state and federal law prohibit discrimination and retaliation, so employers cannot terminate an employee based on his or her gender, race, age, national origin, color, or religion, or for opposing an unlawful employment practice. Texas therefore does not recognize a claim for wrongful termination in the absence of an employment contract or statute.
However, this presumption does not preclude employers and employees from forming subsequent contracts limiting an employer’s right to discharge an employee, so long as neither party relies on continued employment as the consideration for the contract. Thus, despite the at-will presumption, employers may nonetheless restrict their ability to discharge employees by expressly providing for employment for a specific period of time, for example, or by limiting any terminations to those for good or just cause.
What does not destroy the at-will employment presumption?
The presumption that employment at will is difficult to overcome and an employer’s modification of the presumption must be express and cannot be implied.
Thus, an employee manual or handbook vaguely stating that an employee may be dismissed for cause does not modify the at-will employment rule by requiring that dismissal be only for cause. Nor is the manual’s requirement that employee records state one of several bases for termination a specific agreement that alters the relationship. Similarly, the Texas Supreme Court has ruled that comments by the employer that assure the employee she will always have a job if she works hard do not destroy the presumption of at-will employment.
Thus, an employee manual or handbook vaguely stating that an employee may be dismissed for cause does not modify the at-will employment rule by requiring that dismissal be only for cause. Nor is the manual’s requirement that employee records state one of several bases for termination a specific agreement that alters the relationship. Similarly, the Texas Supreme Court has ruled that comments by the employer that assure the employee she will always have a job if she works hard do not destroy the presumption of at-will employment.
What is required to overcome the at-will presumption?
A contract that alters the at-will relationship must unequivocally indicate the employer’s definite intent to be bound not to terminate the employee except under clearly specified circumstances.
It is the employee’s burden to prove that the employer expressly, clearly, and specifically agreed to modify the employee’s at-will employment status.
Under Texas law, statutory exceptions to employment-at-will include:
It is the employee’s burden to prove that the employer expressly, clearly, and specifically agreed to modify the employee’s at-will employment status.
Under Texas law, statutory exceptions to employment-at-will include:
- Discharge based on filing a workers’ compensation claim;
- Discharge based on membership or non-membership in a union;
- Discharge based on active duty in the military;
- Discharge based on jury service; and
- Discharge based on discrimination.
Is there a public policy exception in Texas?
There is a public policy exception to at-will employment in Texas, but it is exceptionally narrow. The Sabine Pilot exception affords employees protection from retaliatory discharge for refusing to engage in illegal conduct.
To prevail under the very narrow Sabine Pilot exception, the discharged employee must prove his or her discharge was for no reason other than his or her refusal to perform an illegal act. Attempts to expand the public policy exception have failed.
There is no public policy exception for employees who are:
The exception does not extend to private whistleblowers, although the Texas Whistleblower Act offers some protection from retaliation, which will be discussed in depth in a future blog.
To prevail under the very narrow Sabine Pilot exception, the discharged employee must prove his or her discharge was for no reason other than his or her refusal to perform an illegal act. Attempts to expand the public policy exception have failed.
There is no public policy exception for employees who are:
- Discharged for reporting illegal activities;
- Discharged for refusing to perform an act that she mistakenly thinks is illegal; or
- Discharged for inquiring into the legality of an act later determined to be legal.
The exception does not extend to private whistleblowers, although the Texas Whistleblower Act offers some protection from retaliation, which will be discussed in depth in a future blog.
Texas employees still have vast rights
Despite this at-will presumption, Texas employees are still granted significant protections in their employment under state and federal law. Workers who are unsure whether their employment contract has been violated or whether they may have a claim for an unlawful discharge should seek the guidance of a reputable employment attorney.
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