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Employment Law
Wayne State University Law School
Browne, Kingsley R.

At-Will Employment:
1) Definition:The ability of ER to fire for good, bad or no reason.
a. Murphy v. American Home: Consistency of at-will with some torts (Strong at-will case): P was fired because he reported accounting improprieties to employer. Sued for a number of actions: Ct. rejected the following torts because it held they conflict with at-will. Other courts come out differently on this.
i. Tort of Abusive or Wrongful Discharge:
ii. Intentional Infliction of Emotional Distress:
iii. Prima Facie Tort: Causing harm to another without justification:
iv. Breach of implied obligation of good faith and fair dealing:
2) Presumption:
a. General rule in states is that employment for indefinite term is at-will. Variations about how much is required to overcome presumption.
3) Constructive Discharge:
a. There can’t be constructive discharge of an at-will EE b/c at-will.
4) Exceptions:
a. Invasion of Privacy:
i. Cort v. Bristol-Myers: Court leaves door open for EEs to sue based on invasion of privacy/public policy discharge if ER requires EE to answer questions that invade privacy and EE actually answers.
b. Discharge in Violation of Public Policy:
i. Boyle v. Vista Eyewear: Can’t terminate at-will EEs for 4 categories of things:
1. Category 1: Refusing to do something illegal,
2. Category 2: EEs who report wrongdoing,
3. Category 3: ERs that discharge EEs for doing good things like jury duty, things that public policy favors.
4. Category 4: ERs that discharge EEs for filing workers comp. / union activity.
c. Fraudulent Concealment:
i. Berger v. Security Pacific Information Systems:If ER lies to EE to get EE to work, EE relies, ER liable if terminates.
d. Covenant of Good Faith and Fair Dealing:
i. Most jurisdictions say this doesn’t apply to EE contracts, but those that do say ER can’t cheat EE out of benefits, commissions, etc. by terminating, even if at-will.
e. Modifications of Terms of Employment in Employee Handbook:
i. Woolley v. Hoffman-La Roche: Employment manual can convert at-will employment to just-cause employment.
1. But clear and prominent disclaimer can reinforce at-will.
f. Legitimate Expectations Theory:
i. This applies in MI.
ii. Lytle v. Malady: Not a K claim: doesn’t require meeting of the minds, theory just says if legitimate expectation, policy is enforced, even by EEs that don’t know about the policy. Two steps for legitimate expectation claims:
1. What, if anything did ER Promise?
a. Not all policy statements are promises. Lack of specificity defeats claim of promise.
2. Is that promise “reasonably capable of instilling a legitimate expectation of just-cause employment?”
a. Specific disclaimer means that reasonable people wouldn’t expect just-cause employment.
iii. Modifications:Under legitimate expectations theory, ER can modify the manual whenever it wants as long as gives reasonable notice calculated to reach all EEs (don’t need individual notice to EE b/c not K theory).
g. Term v. Indefinate:
i. Krizan v. Storz Broadcasting: fixed term Ks, even if silent re grounds for discharge, have implied term that ER can discharge for cause.
5) Just-Cause v. Just-Cause Fairly Determined:
a. Just-cause fairly determined implies that ER will exercise some due process, although it is unclear whether this will happen in egregious situations. Also, if just cause, jury will decide whether actually just-cause, if just-cause fairly determined, jury will only look at whether ER had reasonable belief.
Establishing Employment and its Terms:
1) General Screening:
a. Typical questions relate to employment history, educational history, etc. Might want references. Limited value.
2) Health Screening:
a. Some limits on what questions you can ask about health. ERs especially eager to avoid substance abusers.
b. Random drug screening is subject to even more restrictions than scheduled drug screening. Easier for ER to screen before hiring than screening after and during employment.
c. Challenges to drug testing
i. Intrusion of privacy
1. Typically raised in context of random drug testing with regard to existing employees
ii. Use of information by Employer
1. To discharge an employee
2. Defamation of employer by dissemination of information

3) Personality Tests:
a. Psychological exams are not illegal in most states, but federal law does prohibit polygraph examinations outside of law enforcement investigations.
b. Results are usually some general kind of profile (i.e. low self-esteem, angry, etc.).
c. Some limitations on personality tests.
i. Concern is accuracy of tests, but in absence of tests, ERs are required to rely on their hunches, which are probably even less accurate.
ii. Problem is if there’s a universal honest test that is 80% accurate, the 20% that is mislabeled would be unfairly treated by the test that consistently treats the same people as dishonest.
Disclosure: Interviews and Forms:
1) Information ER can ask EE:
a. Cort v. Bristol-Myers: Balance intrusiveness against reasonableness of questions. The more important the EE, the more intrusive questions. Can be bad faith discharge if EEs answer overly invasive questions, even if at-will. EE has to actually answer the reasonable questions though or can’t sue for the unreasonable.
i. Court determined that there was no invasion of privacy since EE did not answer questions.
ii. Bad Faith Termination – no because EE declined to answer a large number of incontestably relevant, and not unreasonably intrusive, questions. No public policy considerations protect an at will employee in such a circumstance.
2) EE Duty to Disclose:
a. General rule is EEs don’t have to disclose anything unless asked for by ERs. Can’t lie though
3) Employer Disclosure (how much do Employers have to Disclose):
a. The Rule: ER can’t lie to EE, can’t make f

ments of Promissory Estoppel:
a. Promise which promisor should reasonably expect to induce action on part of promissee,
b. Which does induce such action,
c. Injustice of which can only be remedied by enforcement of promise.
2. CT: Elements are met, D made a promise, P relied on it, Unjust not to enforce. Seems to imply that the promise was for good-faith chance of employment because technically ER could terminate at will. Prof doesn’t like because court is enforcing a different promise than the one ER made.
b. Damages: Damages are not what would have made in new employment (which could have been terminated at any time because offer was for at-will), but what didn’t make due to termination of old employment (PE claims only enforce promise to extent required to avoid injustice). If promise was to hire on just-cause basis, or for a period of time, would be different.
Changing the Terms of Employment:
1) General Rule:
a. Bi-lateral Ks:(I think this comes up where there is a K for fixed term, or where court finds one, unilateral K is more at-will) Where K of express duration stating terms and conditions of employment exists, parties can modify, but if no agreement is reached the old terms remain in effect. Unilateral modification is breach.
i. Doyle v. Holy Cross Hospital: EEs joined under old EE manual, subsequently, D inserted language into manual that said manual is not a K, included at-will language.
1. Rule re Modification of Bi-Laterals:
a. Language contained promise, reasonably interpreted as offer,
b. Statement disseminated to EE who reasonably believes to be an offer,
c. EE accepts by commencing or continuing to work after the policy is promulgated,
d. Need consideration, mutual assent, all that.
i. In this case, the manual was a K, but the modification was not supported by consideration. Here ER got benefit, EE got detriment, no benefit for EE.
b. Unilateral Ks: ER can modify at will w/o consideration, mutual assent, etc. Mutuality of consideration applies only to bilateral Ks. Instead consideration is supplied by continued employee services. Offer is accepted by EEs continuing to work.
i. Asmus v. Pacific Bell: ER terminated a policy.
1. Ct: Modification of unilateral Ks ok.
2. Rule re termination of unilateral Ks:
a. Once promisor determines it will terminate/modify K,
Provides reaso