All states recognize the concept of at-will employment. For most business owners, this simply means that an employer can terminate an employee at any time. No reason needs to be given, as this is an implied employer right. Simple, right?

Not so much.

Implied Contract Exception

Most states (but not Massachusetts) have an “implied contract exception,” which means that just cause for the termination should be evident. This requires employees to either sign at-will employment contracts or be notified of a just-cause dismissal in the employee handbook.

Covenant Of Good Faith Exception

A few states recognize the “Covenant of Good Faith Exception,” which is quite broad. It requires that just cause must be evident even if no mention is made in an employee contract or handbook. Eleven states recognize this exception—Massachusetts is one of them.

Public Policy Exception

The most widely applied exemption is the “Public Policy Exception,” which is similar to federal requirements. All but seven states recognize it. Massachusetts is not one of them, and neither is Oklahoma, which recently created a bit of a stir for an employer.

A recent decision handed down by the Oklahoma Supreme Court determined that an employer violated public policy, which means that employers there should make sure an employee termination does not violate public policy expressed in federal regulation or in the state of Oklahoma.

The facts of Moore vs. Warr Acres Nursing Center are as follows:

• Donald Moore, who was a nurse at the nursing center, was found to be vomiting by a supervisor and sent home.
• Moore’s doctor took him out of work for three days. A few days later, Moore was fired.
• He then sued, citing he was fired for working with the flu, which was in violation of public policy.
• The court ruled in his favor.

From here, it would seem that terminating an employee for just cause shortly after an event rightly considered to be a public policy issue was ill-advised.

The dissenting judge wrote that “an employer must now consult state and federal rules and regulations before exercising the decision to terminate an employee.” Given that Oklahoma is a Public Policy Exemption state, that advice would seem obvious.

The takeaway here is that employers should know the employee-at-will exemptions that apply to their states and take measures to ensure that if they elect to terminate an employee at will, then they comply with the letter and spirit of state law.

To learn more about this case, read Gavel to Gavel: Add a box to your termination checklist by Chris Thrutchley.