Introduction

1. at-will employees
2. just-cause employees

1. to inform citizens of the USA about the doctrine of at-will employment and urge that they contact their legislators and push for statutes that will end at-will employment, and
   
   I list the cases in chronological order in the citations in this essay, so the reader can easily follow the historical development of a national phenomenon. If I were writing a legal brief, I would use the conventional citation order given in the Bluebook.
   
   

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   1. History of At-Will Employment

   According to various legal scholars, the doctrine of at-will employment first appeared as a statement in a legal treatise by Horace C. Wood, Master and Servant § 134, at pages 272-273 (1877).
   
   Wood cited four American cases in support of his statement about at-will employment. However, none of those four cases support Wood's statement!
   • Contract of Hiring – Duration, 11 A.L.R. 469, 476 (1921);
   • J. Peter Shapiro and James F. Tune, Note, Implied Contract Rights to Job Security, 26 Stanford Law Review 335, 341-342, n.54 (1973-74);
   • Jay M. Feinman, The Development of the Employment at Will Rule, 20 American Journal of Legal History 118, 126-127 (1976);
   • Toussaint v. Blue Cross & Blue Shield of Michigan, 292 N.W. 2d 880, 887, n.14 (Mich. 1980);
   • Weiner v. McGraw-Hill, Inc., 443 N.E.2d 441, 444, n.5 (N.Y. 1982) (citing Joseph DeGiuseppe, Effect of the Employment-At-Will Rule on Employee Rights to Job Security and Fringe Benefits, 10 Fordham Urban Law J. 1, 6 and n.13 (1981));
   • Magnan v. Anaconda Industries, Inc., 479 A.2d 781, 784, n.8 (Conn. 1984) ("Scholars and jurists unanimously agree that Wood's pronouncement in his treatise, Master and Servant § 134 (1877), was responsible for nationwide acceptance of the rule. They also agree that his statement of the rule was not supported by the authority upon which he relied, and that he did not accurately depict the law as it then existed.").
   Apparently, Wood simply invented the concept of at-will employment, but wrongly described it as already accepted by the courts.
   
   Soon after Wood's treatise appeared, various courts began citing the rule in his treatise, and thus the rule became accepted law. For example:
   • McCullough Iron Co. v. Carpenter, 11 A. 176, 178-179 (Md. 1887) ("[Wood's treatise] is an American authority of high repute ....");
   • East Line and Red River Railroad v. Scott, 10 S.W. 99, 102 (Tex. 1888);
   • In re Philadelphia Packing & Provision Co., 1894 WL 3641 at *3 (Pa.Com.Pl. 1894);
   • Martin v. New York Life Ins. Co., 42 N.E. 416, 417 (N.Y. 1895) ("... we think the rule is correctly stated by Mr. Wood, and it has been adopted in a number of states.");
   • Greer v. Arlington Mills Mfg. Co., 43 A. 609, 610 (Del.Super. 1899) ("Wood, in his Law of Master and Servant (§ 134), very clearly states the difference between the rule which obtains in this country and the one in England, and I can find it nowhere more intelligently and satisfactorily stated. It is as follows:" [quoting nearly one page from Wood])
     also "We have no doubt that the great preponderance of the best-considered cases in this country recognize and affirm the rule laid down by Wood in his work on Master and Servant, and which he terms the 'American rule,' ...." Greer at 612.
   • Harrod v. Wineman, 125 N.W. 812, 813 (Iowa 1910) ("... in this country it is held by an overwhelming weight of authority that a contract of indefinite employment may be abandoned at will by either party without incurring any liability to the other for damages. The cases are too numerous to justify citation, but see ...." [citing four secondary sources, including Wood's Master and Servant]).
   
   It is clear that the doctrine of at-will employment was harmonious with the laissez-faire spirit of the times. In that way, Wood's mistaken statement was the catalyst for what may have been inevitable. On the other hand, without Wood's statement, judges might not have had the courage to make radical new law, in creating at-will employment.
   
   As an indication of the spirit of that era, in the first third of the Twentieth Century, the U.S. Supreme Court upheld individual freedom of contract and invalidated, on due process grounds, statutes that prohibited employers from terminating employment of workers because the workers were members of a union.
   Adair v. U.S., 208 U.S. 161, 174-176 (1908);
   Coppage v. Kansas, 236 U.S. 1, 13-14, 20-21 (1915).
   These two opinions of the U.S. Supreme Court were overruled by:
   NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937);
   Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 187 (1941);
   Lincoln Fed.Labor Union v. Northwestern Iron & Metal Co., 335 U.S. 525, 536 (1949).
   
   In 1985, an attorney wrote, in a scholarly article:

   The doctrine of employment-at-will emerged in the nineteenth century in the United States in a climate of unbridled, laissez-faire expansionism, social Darwinism, and rugged individualism. It is often referred to as Wood's Rule, named after Horace C. Wood, who articulated the doctrine in an 1877 treatise Master and Servant. No doubt the title of the treatise says all that need be said regarding Wood's view of employment relations and, unfortunately, the view shared by most of his legal contemporaries.   [three footnotes omitted]

   William L. Mauk, Wrongful Discharge: The Erosion of 100 Years of Employer Privilege, 21 Idaho L. Rev. 201, 202 (1985).

   
   The original statement by Wood, and also the early courts that followed Wood's rule, contain no reason for the rule. However, the following reasoning seems plausible. The employee must be free to quit at any time, otherwise there is the possibility of involuntary servitude, which is prohibited in the Thirteenth Amendment to the U.S. Constitution. The doctrine of mutuality of obligations then required a symmetrical right of the employer to terminate the employee at any time. See Smith v. Atlas Off-Shore Boat Service, Inc., 653 F.2d 1057, 1061 (5thCir. 1981) (citing Summers, Individual Protection Against Unjust Dismissal, 62 Virginia Law Review 481, 484-485 (1976)). The doctrine of mutuality of obligations has long since been repudiated – modern contract law allows any promise that is supported by consideration. However, the legal doctrine of at-will employment continues as an anachronism.
   
   As a secondary reason, not mentioned by legal historians, I wonder if some of the willingness to follow Wood's "American Rule" was a desire of judges in the USA in the late 1800s to reject the law of England and to assert a new law of the USA. Wood, in his treatise, compares the law of the two countries

   In England, it is held that ....
   ....
   With us, the rule is inflexible that a ....

   Horace C. Wood, Master and Servant § 134 (1877).

   Many of the early court opinions in the USA that accept Wood's rule also seem to emphasize that American law differs from English law. In fact, the law in this area differed only because of Wood's error.

   
   In its narrowest sense, the doctrine of at-will employment only speaks to when an employment contract can be terminated: the contract can be terminated at-will of either party, i.e., at any time. A separate issue is why (i.e., for what reasons) the employment contract can be properly terminated. From the beginning, the concept of at-will employment meant that the employment contract could be terminated for any reason by either party.
   
   

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   2. Quotations from Court Cases

   may terminate employment for morally reprehensible reasons

   An often-quoted statement of at-will employment appears in an old case from Tennessee:

   All may dismiss their employees at will, be they many or few, for good cause, for no cause[,] or even for cause morally wrong, without being thereby guilty of legal wrong.

   Payne v. Western & Atlantic Railroad Co., 81 Tenn. 507, 519-520, 1884 WL 469 at *6 (Sep. term 1884).

   This rule of law in Payne has been quoted by a number of modern authorities as the correct statement of the law:
   • Smith v. Atlas Off-Shore Boat Service, Inc., 653 F.2d 1057, 1060-61 (5thCir. 1981) (citing Payne as correct statement of the nonmaritime common law);
   • Magnan v. Anaconda Industries, Inc., 479 A.2d 781, 784 (Conn. 1984);
   • John D. Calamari and Joseph M. Perillo, The Law of Contracts, p. 61, third edition, West Publishing (1987) (quoting Payne as the "orthodox rule", but also calling it a "harsh rule");
   • Hillesland v. Federal Land Bank Assn., 407 N.W.2d 206, 211 (N.D. 1987)("The classic statement of the at-will rule ....");
   • Sheets v. Knight, 779 P.2d 1000, 1005-06 (Or. 1989);
   • Darnall v. A+ Homecare, Inc., 1999 WL 346225 at *2 (Tenn.App. 1999)("This principle is still viable in Tennessee except where modified by statute.")
   
   Written in 1981, Smith holds that

     The maritime employer may discharge the seaman for good cause, [footnote omitted] for no cause, or even, in most circumstances, for a morally reprehensible cause. We conclude, however, that a discharge in retaliation for the seaman's exercise of his legal right to file a personal injury action against the employer constitutes a maritime tort.

   Smith, 653 F.2d at 1063.

   
   How could any judge, in either 1884 or 1981, write such words that would give legal protection to someone who harmed another person by "morally wrong" or "morally reprehensible" reason? This statement is simply astounding. And it is almost beyond comprehension how thousands of judges in the USA could follow such an unjust rule for more than 120 years.
   
   

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   some modern judicial criticism of at-will employment

   It is interesting to read the discussion of the origins of at-will employment that are found in some recent state court opinions.
   
   In 1983, the Wisconsin Supreme Court wrote:

   In the late nineteenth century, apparently influenced by the laissez-faire climate of the Industrial Revolution, the American courts then rejected the English rule and developed their own common-law rule, the employment at will doctrine.³ The doctrine recognized that where an employment was for an indefinite term, an employer may discharge an employee "for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong."⁴
   

   ³Commentators state that many courts were influenced by H.G. Wood's treatise on master-servant relationships published in 1877. In that treatise Wood wrote:

   "With us the rule is inflexible, that a general or indefinite hiring is prima facie a hiring at will, and if the servant seeks to make it out a yearly hiring, the burden is upon him to establish it by proof.... [I]t is an indefinite hiring and is determinable at the will of either party, and in this respect there is no distinction between domestic and other servants."

   H. Wood, Master and Servant, § 134, (1877).
   The commentators also generally agree that Wood's analysis was not supported by the cited authorities.
   
   ⁴Blades, 67 Colum.L.Rev. at 1405, quoting Payne v. Western & A.R.R., 81 Tenn. 507, 519-20 (1884), overruled on other grounds, Hutton v. Watters, 132 Tenn. 527, 179 S.W. 134 (1915).

   
   

     By the turn of the twentieth century, the at will doctrine was absolute and was even temporarily afforded constitutional protection.⁵ However, since the New Deal, government regulation in the workplace has increased dramatically as Congress and state legislatures recognized the need to curb harsh applications and abuse of the rule in an effort to stabilize labor relations.
   

   ⁵In Adair v. United States, 208 U.S. 161, 28 S.Ct. 277, 52 L.Ed. 436 (1908) and Coppage v. Kansas, 236 U.S. 1, 35 S.Ct. 240, 59 L.Ed. 441 (1915), the United States Supreme Court held statutes that were aimed at prohibiting employers from discriminating against union members unconstitutional. The court retreated from this position in NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893 (1937).

   Brockmeyer v. Dun & Bradstreet, 335 N.W.2d 834, 837 (Wisc. 1983).

   
   In 1989, the Utah Supreme Court declared:

   The genesis of the at-will rule in its present form in America, however, can be traced to Horace G. Wood's 1877 treatise on the master-servant relationship. H. Wood, Master and Servant § 134 (1877), cited in Note, Implied Contract Rights to Job Security, 26 Stan.L.Rev. 335, 341 (1974). Wood proffered his rule without analysis and cited apparently inapposite authority on its behalf. Id. at 341-43. Notwithstanding its dubious antecedents, the rule was adopted by many jurisdictions without careful or thorough examination. In the leading case of Martin v. New York Life Insurance Co., 148 N.Y. 117, 42 N.E. 416 (1895), the court repudiated the common law presumption that a general hiring was for a term of one year and uncritically embraced the at-will rule as framed by Wood. The Martin opinion did not analyze any prior authority, but did assert that several other states had adopted the at-will rule. The Martin decision was not atypical. Most courts offered no rationale or analysis for substituting the at-will doctrine for the common law presumption. By the arrival of the twentieth century, the at-will doctrine was well-established throughout the United States and served to reinforce turn-of-the-century ideas concerning laissez-faire economics and freedom to contract. Note, Implied Contract Rights to Job Security, 26 Stan.L.Rev. at 340; Note, Protecting At-Will Employees Against Wrongful Discharge: The Duty to Terminate Only in Good Faith, 93 Harv.L.Rev. 1816, 1824-26 (1980).
   
     The development and establishment of the at-will rule in Utah was also accomplished without critical examination.   ....

   Berube v. Fashion Centre, Ltd., 771 P.2d 1033, 1040-1041 (Utah 1989).

   
   

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   3. Sticks out like a sore thumb

   The concept of at-will employment sticks out like a sore thumb.
   
   Most employees of the U.S. federal government are not at-will employees, but can be demoted or fired "only for such cause as will promote the efficiency of the service." 5 U.S.C. § 7513(a), enacted in 1978.
   
   Similarly, most employees of state governments in the USA are not at-will employees.
   
   And most members of labor unions in the USA are covered by a written contract, called a "collective bargaining agreement", that contains a clause specifying that their employment can be terminated only for just cause. This clause makes union members not at-will employees.
   
   While most people in the USA do not seem to care about practices in other countries, several law review articles have noted that the USA is alone among the industrialized nations of the world in providing no protection against wrongful termination of employment.
   • Daniel A. Mathews, Note, A Common Law Action for the Abusively Discharged Employee, 26 Hastings Law Journal 1435, 1447, n.54 (1975);
   • Clyde W. Summers, Individual Protection Against Unjust Dismissal: Time For A Statute, 62 Virginia Law Review 481, 508-519 (1976) (review of law in France, Germany, England, and Sweden);
   • Samuel Estreicher, Unjust Dismissal Laws, 33 American Journal of Comparative Law 310 (1985) (review of law in Canada, Great Britain, Germany, France, Italy, and Japan).
   
   A court in Missouri in 1985 reviewed wrongful discharge cases that were reported between 1977 and 1984 and concluded:

     As many of the decided cases illustrate, the burden of the at-will employment doctrine seems to be falling most heavily and harshly upon professional and upper and middle level employees.   [footnote that cites 15 cases]   They have the least protection. Most are at-will employees and few have job security through union or individually negotiated contracts. They have the most to lose, frequently being the long-term employees who have the greatest responsibility and substantial investment in and the highest expectations from their careers. Often they are at an age when replacement of their life and medical insurance programs and their retirement plans are difficult or impossible. They are the most vulnerable to the improper demands of employers who find it profitable to take chances with anti-trust and consumer fraud violations, environmental pollution, health-related misconduct, defense procurement fraud, and the like. The at-will employment doctrine does not include, contemplate or require a privilege in the employer to subject its employees to the risks of civil and criminal liability that participation in such activities entails.

   Boyle v. Vista Eyewear, Inc., 700 S.W.2d 859, 877-878 (Mo.App. 1985).

   
   

   Why haven't legislatures ended at-will employment?

   The quick way to stop the propagation of defective common law is for legislatures to pass a statute. So why haven't legislatures done that? I agree with the authors of the following scholarly articles.
   
   A well-known law review article in 1967 tersely concluded:

     The problem [of abusive dismissal of employees] does seem to be one suited to legislative inquiry and solution. As a practical matter, however, the prospects for any kind of general legislative reform in this area are dim. The obstacles which commonly hinder legislative reforms of this sort have been commented upon elsewhere.¹³⁹ Suffice it to say that general statutory limitations on the employer's right of discharge are unlikely to be enacted so long as there is no strong lobby to promote them. Employees having diverse job specialties and working at varying echelons of employment simply are not equipped to from a cohesive group with enough power to influence legislators. The unlikelihood that such legislation will be enacted in the foreseeable future is enhanced by the strong interest groups to be counted on to oppose it. Nor could organized labor be expected to favor laws which would give individual employees a means of protecting themselves with need of a union. Therefore, it appears that protection of all employees from the abusive exercise of employer power will have to originate, if it is to be established at all, in the courts.

   ¹³⁹ See, e.g., Peck, The Role of the Courts and Legislatures in the Reform of Tort Law, 48 Minn. L. Rev. 265 (1963). Among the characteristics of the legislative process which the author points to as generally obstructing statutory reform of tort law are that legislators are indifferent, lack insight and experience, are paid inadequate wages, fail to hold satisfactory committee and public hearings, and are subject to well-organized lobbies and pressure groups.

   Lawrence E. Blades, Employment at Will v. Individual Freedom: On Limiting the Abusive Exercise of Employer Power, 67 Columbia Law Rev. 1404, 1433-34 (1967). [five footnotes omitted]

   
   And, in 1979, a law student wrote:

     However, legislative action to protect the private, non-union employee-at-will from arbitrary or retaliatory discharge is unlikely to be forthcoming. Statutes are typically the result of the lobbying efforts of organized interest groups. The only organized employee groups with sufficient political influence to effect such a change in established practice are the unions, but their allegiance is somewhere other than with private, non-union employees. Moreover, professional societies, the most obvious candidates for such action on behalf of their members, have been notoriously reticent and ineffective in this area. Employers, in contrast, are well organized and at all times stand poised to lobby against any infringement upon their absolute right of discharge. For the foreseeable future, unorganized employees, like consumers in the products liability area, must look primarily to the courts for protection against arbitrary or malicious discharges in those areas where Congress or the state legislatures have not acted. At present, a discharged employee's chance of finding a court receptive to his or her claim depends more on the jurisdiction and the bench before which the case arises than on the strength of his or her case.

   Alfred G. Feliu, Discharge of Professional Employees: Dismissal for Acts Within a Professional Code of Ethics, 11 Columbia Human Rights Law Review 149, 162-163 (1979).

   
   A group of law students at Harvard wrote in 1980:

   Regardless of its form, the prospect for statutory chance is doubtful without a strong lobbying effort that unorganized employees are probably unable to mount. Strong union support is not likely either because this kind of statutory reform would take away one of the unions' principal arguments — that protection from unjust dismissal is available only under a collective bargaining agreement administered by a union-controlled grievance mechanism.
   
     Such public law solutions need not be the exclusive remedy for at will employees. Courts possess the legitimate heritage of common law innovation that develops new principles to accommodate changing values, and are therefore an appropriate forum for the creation of job security rights. Because courts have considerable experience with similar employment relations problems, they possess sufficient expertise to resolve wrongful discharge disputes. Thus, courts need not await legislative initiative to effect doctrinal change in the employment at will area. Courts themselves created the at will rule; it is therefore entirely appropriate that they now take the lead in modifying it.

   Note, Protecting At Will Employees Against Wrongful Discharge: The Duty to Terminate Only in Good Faith, 93 Harvard Law Review 1816, 1837-38 (1980). [five footnotes omitted]

   
   I agree with what these authors said, but – in practice – judges have been reluctant to use their power to modify the common law of at-will employment. I discuss this judicial reluctance later in this essay. Further, in some states, the doctrine of at-will employment is enshrined in statute, so the only way to end at-will employment in those states is for the legislature to repeal or revise the statute. Moreover, waiting for legislatures to act has not been completely hopeless: in 1987, Montana enacted a statute that abolished at-will employment for employees in that state who are past their employer's probationary period. Montana Laws 39-2-904.
   
   

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   4. Beginning of the end of at-will employment?

   In 1959, a California District Court of Appeal wrote a frequently-cited opinion, Petermann v. International Brotherhood of Teamsters, 344 P.2d 25 (Cal.App. 1959), that held an at-will employee could not be discharged because he had failed to commit perjury that was desired by his employer. This landmark case established the public-policy exception to at-will employment, but it stood virtually alone for many years.
   
   In 1967, Prof. Lawrence E. Blades wrote Employment at Will v. Individual Freedom: On Limiting the Abusive Exercise of Employer Power, 67 Columbia Law Rev. 1404. Many state supreme court opinions have cited this influential article:
   • Monge v. Beebe Rubber Co., 316 A.2d 549, 551 (N.H. 1974);
   • Geary v. U.S. Steel Corp., 319 A.2d 174, 176, 179 (Pa. 1974);
   • Harless v. First National Bank, 246 S.E.2d 270, 275, n.4 (W.V. 1978);
   • Sheets v. Teddy's Frosted Foods, 427 A.2d 385, 387 (Conn. 1980);
   • Tameny v. Atlantic Richfield Co., 610 P.2d 1330, 1333, n.7 (Calif. 1980);
   • Pierce v. Ortho Pharmaceutical, 417 A.2d 505, 509 (N.J. 1980);
   • Palmateer v. International Harvester, 421 N.E.2d 876, 878 (Ill. 1981);
   • Adler v. American Standard Corp., 432 A.2d 464, 470 (Maryland 1981);
   • Parnar v. Americana Hotels, 652 P.2d 625, 628, n.7 (Hawaii 1982)(calling it "the seminal article on the subject");
   • Thompson v. St. Regis Paper Co., 685 P.2d 1081, 1086 (Wash. 1984);
   • DeRose v. Putnam Management Co., 496 N.E.2d 428, 431 (Mass. 1986);
   • Sabetay v. Sterling Drug, Inc., 506 N.E.2d 919, 921 (N.Y. 1987);
   • Foley v. Interactive Data, 765 P.2d 373, 376, n.3 (Calif. 1988);
   • Burk v. K-Mart Corp., 770 P.2d 24, 26 (Okla. 1989);
   • Collins v. Rizkana, 652 N.E.2d 653, 657 (Ohio 1995);
   • Anderson v. Douglas & Lomason Co., 540 N.W.2d 277, 282 (Iowa 1995).
   Many, but not all, of these cases that cited Prof. Blades' article found a public-policy exception to at-will employment.
   
   In 1980, California Supreme Court, in Tameny v. Atlantic Richfield Co., 610 P.2d 1330, accepted the reasoning in Petermann.
   
   During the 1980s, many other state courts recognized the existence of public-policy exceptions to at-will employment. These courts were influenced by a large number of law review articles published since the mid-1960s that condemned the doctrine of at-will employment. And, as an increasing number of state supreme courts recognized public-policy exceptions to at-will employment, other states were willing to join the rapidly growing minority, which soon became a majority.
   
   Also during the 1980s, many state legislatures passed statutes that prohibit termination of employment for various reasons, as well as give limited protection to whistleblowers who serve the public interest.
   
   The trend in courts and legislatures continued during the 1990s. Nonetheless, the doctrine of at-will employment remains the law in the USA, although it may become riddled with exceptions in the Twenty-First Century.
   
   In my opinion, the doctrine of at-will employment was a major mistake, which continues to be propagated by judges with more respect for stare decisis, than either respect for fairness or desire to protect weaker parties from abuse.
   
   Employment contracts are a species of contracts, and, as such, should be governed by conventional contract law. As explained later in this essay, there are a number of rules in conventional contract law that could ameliorate the harshness of at-will employment. However, from the beginning of at-will employment in the 1890s to the recognition of public-policy exceptions to at-will employment in the 1980s — an interval of approximately ninety years — the courts seem to have regarded the doctrine of at-will employment as somehow completely overriding basic rules of contract law. I have not seen an adequate explanation for why judges ignored conventional contract law in the context of wrongful discharge cases.
   
   

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   5. Public Policy

   Before we discuss judicial reluctance to use public policy (or another principle of law) to end at-will employment, we should first discuss the legal concept of public policy. A long-standing principle of contract law states that courts will not enforce [parts of] contracts that are contrary to public policy. An English court in the year 1853 voided a contract on public policy grounds:

   Public policy ... is that principle of the law which holds that no subject can lawfully do that which has a tendency to be injurious to the public, or against the public good, which may be termed, as it sometimes has been, the policy of the law, or public policy in relation to the administration of the law.

   Egerton v. Brownlow, 4 H.L.Cas. 1, 196 (1853)(Lord Truro, J.).

   More than sixty opinions of state supreme courts in the USA since 1945 have quoted this rule of public policy from Egerton, although these opinions often cite either an earlier American case or a treatise written in the USA, instead of citing the original source. The following cases are a representative sample of American state supreme courts in major states, plus some landmark decisions on wrongful discharge, that approve of this rule in Egerton.
   • McNamara v. Gargett, 36 N.W. 218, 221 (Mich. 1888) (citing Greenhood Public Policy);
   • People ex rel. Peabody v. Chicago Gas Trust Co., 22 N.E. 798, 803 (Ill. 1889); quoted with approval in Palmateer v. International Harvester, 421 N.E.2d 876, 878 (Ill. 1981);
   • Consumers' Oil Co. v. Nunnemaker, 41 N.E. 1048, 1050 (Ind. 1895) (citing Greenhood Public Policy at 2, 3);
   • Boston & Albany Railroad Co. v. Mercantile Trust, 34 A. 778, 785 (Maryl. 1896) (citing 19 Am. & Eng. Enc. Law 565);
   • Veazey v. Allen, 66 N.E. 103, 105 (N.Y. 1903);
   • Porter v. Trustees of Cincinnati Southern Railway, 117 N.E. 20, 21 (Ohio 1917)(citing 9 Cyc. 481);
   • Hawkins Realty Co. v. Hawkins State Bank, 236 N.W. 657, 662 (Wisc. 1931)(citing Page on Contracts);
   • Heath v. Heath, 159 A. 418, 421 (N.H. 1932);
   • Council v. Cohen, 21 N.E.2d 967, 969 (Mass. 1939)(citing Egerton);
   • Schaffer v. Federal Trust Co., 28 A.2d 75, 79 (N.J.Ch. 1942); quoted with approval in Mehlman v. Mobil Oil, 707 A.2d 1000, 1012 (N.J. 1998);
   • Makinen v. George, 142 P.2d 910, 917 (Wash. 1943)(quoting Words & Phrases); quoted with approval in Brown v. Snohomish County Physicians Corp., 845 P.2d 334, 338 (Wash. 1993);
   • Safeway Stores v. Retail Clerks International Ass'n, 261 P.2d 721, 726 (Calif. 1953)(citing Story's Contracts); cited in the landmark case Peterman v. International Brotherhood of Teamsters, 344 P.2d 25, 27 (Cal.App. 1959); quoted with approval in Berube v. Fashion Center, 771 P.2d 1033, 1042 (Utah 1989); quoted with approval in Coman v. Thomas Mfg. Co., 381 S.E.2d 445, 447, n.2 (N.C. 1989); quoted with approval in Green v. Ralee Engineering Co., 960 P.2d 1046, 1052 (Calif. 1998);
   • Md.-National Capitol Park & Planning Commission v. Washington National Arena, 386 A.2d 1216, 1228 (Maryl. 1978)(citing Egerton); quoted with approval in Adler v. American Standard Corp., 432 A.2d 464, 471-472 (Maryl. 1981);
   • Parnar v. Americana Hotels, Inc., 652 P.2d 625, 631, n.13 (Hawaii 1982);
   • Boyle v. Vista Eyewear, Inc., 700 S.W.2d 859, 871 (Mo.App. 1985) quoted in Gantt v. Sentry Ins., 824 P.2d 680, 685 (Calif. 1992);
   • Harper v. Healthsource, 674 A.2d 962, 965 (N.H. 1996).
   
   Taken literally, the rule in Egerton can be used to void any contract that a judge considers to be either "injurious to the public, or against the public good". That is a very broad power, as shown by the following quotation from a case in New Jersey:

   Whatever tends to injustice or oppression, restraint of liberty, restraint of legal right; whatever tends to the obstruction of justice, a violation of a statute, or the obstruction or perversion of the administration of the law; whatever tends to interfere with or control the administration of the law, as to executive, legislative, or other official action, whenever embodied in, and made the subject of, a contract, the contract is against public policy, and therefore void, and not susceptible of enforcement.

   Brooks v. Cooper, 26 A. 978, 981 (N.J. 1893).
   quoted with approval in Bron v. Weintraub, 199 A.2d 625, 628-29 (N.J. 1964).

   
   In practice, judges in most states only consider public policy that has been explicitly recognized in a narrow range of sources, as explained in the following section. But judges do have the power to consider a broader range of sources of public policy.
   
   

   sources of public policy

   In the majority of states, judges have declared that public policy is only found in the constitution, statutes, and – sometimes – governmental regulations that implement statutes, because judges are unwilling to function as a legislature and determine which values of citizens are worth protecting. See, for example:
   • Gantt v. Sentry Ins., 824 P.2d 680, 684, 687-688 (Calif. 1992)(public policy exception must be "tethered to" either constitution or statute); Green v. Ralee Engineering Co., 960 P.2d 1046 (Calif. 1999)(expanding sources of public policy to include federal regulations intended to protect public safety);
   • Parnar v. Americana Hotels, 652 P.2d 625, 630-631 (Hawaii 1982);
   • Luethans v. Washington Univ., 894 S.W.2d 169, 171, n.2 (Mo. 1995);
   • Wieder v. Skala, 609 N.E.2d 105, 110 (N.Y. 1992);
   • Winkelman v. Beloit Memorial Hospital, 483 N.W.2d 211, 215 (Wisc. 1992) (allowing state regulations, in addition to statutes and constitution).
   
   In many states, the public-policy exceptions have been created by the legislature in statute(s) that specifically gives the ex-employee the right to sue for wrongful discharge.
   
   In a few states, public-policy exceptions have also been created by judges, as part of the common law. See, for example,
   • Pierce v. Ortho Pharmaceutical, 417 A.2d 505, 512 (N.J. 1980);
   • Palmateer v. International Harvester Co., 421 N.E.2d 876, 878 (Ill. 1981)(Public policy "is to be found in the state's constitution and statutes and, when they are silent, in its judicial decisions.";
   • Parnar v. Americana Hotels, 652 P.2d 625, 631 (Hawaii 1982) ("Prior judicial decisions may also establish the relevant public policy.");
   • Boyle v. Vista Eyewear, Inc., 700 S.W.2d 859, 871 (Mo.App. 1985)("It finds its sources in the state constitution; in the letter and purpose of a constitutional, statutory or regulatory provision or scheme; in the judicial decisions of the state and national courts; in 'the constant practice of government officials'; and, in certain instances, in professional codes of ethics." [citations omitted]);
   • Burk v. K-Mart Corp., 770 P.2d 24, 28 (Okla. 1989).
   
   The sources of public policy mentioned in Palmateer, a famous wrongful discharge case in Illinois, can be traced back a long way:

   The public policy of the state or of the nation is to be found in its Constitution and its statutes, and, when cases arise concerning matters upon which they are silent, then in its judicial decisions and the constant practice of the government officials. Bell v. Farwell, 176 Ill. 489, 52 N. E. 346, 42 L. R. A. 804, 68 Am. St. Rep. 194; Harding v. American Glucose Co., 192 Ill. 551, 55 N. E. 577, 64 L. R. A. 738, 74 Am. St. Rep. 189; Brush v. City of Carbondale, [82 N.E. 252]; Hartford Fire Ins. Co. v. Chicago, Milwaukee & St. Paul Railroad Co., 70 Fed. 201, 17 C. C. A. 62, 30 L. R. A. 193; Vidal v. Girard's Ex'rs, 2 How. 127, 11 L. Ed. 205; United States v. Trans-Missouri Freight Ass'n, 166 U. S. 290, 17 Sup. Ct. 540, 41 L. Ed. 1007.

   Zeigler v. Illinois Trust & Savings Bank, 91 N.E. 1041, 1045 (Ill. 1910).

   
   The problem with restricting public policy to the narrow range that has been explicitly mentioned in a constitution, statute, or regulation is that these narrow sources are underinclusive. No list of specific bad reasons for terminating employment, in a statute or elsewhere, can contain all of the possible abusive, arbitrary, irrational, or wrongful reasons. A broad interpretation of public policy might be one way for judges to protect employees from the harshness of at-will employment, other ways are mentioned later in this essay.
   
   A venerable treatise on contracts states:

   Bargains may be illegal because they are so declared by the Common Law, are against Public Policy, or are so treated in the prevailing mores of the community (contra bonos mores).

   6A Arthur Linton Corbin, Corbin on Contracts, 5 (1962).

   Some judges have thought that they must look solely to constitutions and statutes[,] and to earlier decisions interpreting and applying them[,] as the sources from which they may determine what public policy requires. This is far from true, even though these are the sources that are first to be considered and that often may be conclusive. [footnote omitted]

   Id. at 15.

   
   

   ---

   6. Judicial Reluctance

   In the previous section of this essay, I discussed the legal doctrine of refusing to enforce contracts that are contrary to public policy. Despite having broad powers, judges have chosen not to use the powers to end the doctrine of at-will employment. Judges in many states have even been reluctant to recognize a tort of wrongful discharge.
   
   As a result of judicial reluctance in the area of creating public-policy exceptions to at-will employment, the cases cited in my essay on have sporadically protected only a few employees.
   
   Prof. Summers concluded that protection of employees from wrongful discharge must come from the legislature, not from courts:

   ... any realistic hope for increased legal protection of employees must look for fulfillment to legislation, for the courts have thus far shown an unwillingness to break through their self-created crust of legal doctrine. Legal theories rooted in torts, contracts, and property law are readily available. .... A few bolder judges have pointed the way, but the great majority have lacked the courage or desire to follow.

   Clyde W. Summers, Individual Protection Against Unjust Dismissal, 62 Virginia Law Review 481, 521 (1976).

   
   In 1983, a group of law students at Harvard Law School wrote:

   The public policy exception appears to provide employees with a broad source of protection from unjust dismissal. In practice, however, the public policy exception has limited only slightly the harshness of the at-will rule.

   Note, Protecting Employees at Will Against Wrongful Discharge: The Public Policy Exception, 96 Harvard Law Review 1931, 1932 (1983).

   In practice, however, the protection [the public policy exception] extends to employees is minimal. The inadequacy of this protection arises in part from the courts' limited view of the sources of public policy ....

   Id. at 1937.

   This view seems to still be true in July 2000.
   
   A prominent professor of law, who specializes in employer-employee matters, concluded in 1988 that a satisfactory solution should come from the legislature.

   Except perhaps in the most egregious circumstances, therefore, common-law principles of public policy provide no guaranteed recourse for the wronged worker.

   Theodore J. St. Antoine, A Seed Germinates: Unjust Discharge Reform Heads Toward Full Flower, 67 Nebraska Law Review 56, 60 (1988).

   
   

   California

   It is worth explicitly considering why, despite the well-founded criticism of at-will employment, the doctrine of at-will employment continues to protect employers who terminate employees for morally or ethically repugnant reasons. The major problem seems to be refusal of judges to create broad public-policy exceptions to at-will employment. I present quotations from opinions of the state supreme courts of the two states with the largest population in the USA (i.e., California and New York), California first:

     Second, it is generally agreed that "public policy" as a concept is notoriously resistant to precise definition, and that courts should venture into this area, if at all, with great care and due deference to the judgment of the legislative branch, "lest they mistake their own predilections for public policy which deserves recognition at law." [citation omitted] ....
   
   

     These wise caveats against judicial policymaking are unnecessary if one recognizes that courts in wrongful discharge actions may not declare public policy without a basis in either the constitution or statutory provisions. A public policy exception carefully tethered to fundamental policies that are delineated in constitutional or statutory provisions strikes the proper balance among the interests of employers, employees and the public. The employer is bound, at a minimum, to know the fundamental public policies of the state and nation as expressed in their constitutions and statutes; so limited, the public policy exception presents no impediment to employers that operate within the bounds of law. Employees are protected against employer actions that contravene fundamental state policy. And society's interests are served through a more stable job market, in which its most important policies are safeguarded.

   Gantt v. Sentry Ins., 824 P.2d 680, 687-688 (Calif. 1992)
   
   

   A later case in the California Supreme Court reiterated this view.

     Gantt's limitation on public policy sources (that they must be supported by either constitutional or statutory provisions) grew from our belief that " 'public policy' as a concept is notoriously resistant to precise definition, and that courts should venture into this area, if at all, with great care and due deference to the judgment of the legislative branch" in order to avoid judicial policymaking. [citing Gantt, supra]

   Green v. Ralee Engineering Co., 960 P.2d 1046, 1052 (Calif. 1999)

   
   I certainly do not "agree that 'public policy' as a concept is notoriously resistant to precise definition". A simple test for public policy is to ask whether society would be better served if employment could not be terminated because the employee (for example):
   • reported to a law enforcement agency his/her reasonable suspicion of a crime,
   • refused to endanger the health or safety of other people,
   • upheld a principle of professional ethics, in spite of his/her manager's order to engage in unethical conduct,
   • reports misfeasance or incompetence by a government agency, or
   • allowed a manager to interfere with the professional opinion of a licensed professional, when the manager was not qualified for such a license.
   
   As for the argument in Gantt that confining public-policy exceptions to the constitution and statutes will give employers notice of proscribed conduct — the concept of advance notice (i.e., no ex post facto law) is derived from criminal law, not tort law. In tort cases (e.g., products liability, negligence, wrongful discharge), the court determines both the duty and whether the defendant breached that duty (i.e., engaged in wrongful conduct).

   This creates the impression that only statutes or constitutional provisions provide employers with adequate notice of what is forbidden by public policy, and that it is somehow unfair for employers to be bound by other legitimate sources of public policy. This is wrong. Other legitimate sources of public policy, such as judicial decisions or codes of professional ethics, for instance, are readily available to employers or their counsel and thus provide no less "notice" than do statutes or constitutional provisions.

   Gantt, 824 P.2d at 693 (Kennard, J., dissenting, with whom Justice Mosk concurs).

   
   

   ---

   
   

   New York State

   California is not the only state with a timid judiciary. The second largest state in the USA, New York State, has equally reluctant judges.
   
   In a case in New York State, a discharged employee was found to have stated a claim for breach of contract. Justice Wachtler, joined by another justice, wrote a dissenting opinion:

     For almost a century, the common law of New York has provided that absent some form of contractual agreement between an employee and employer establishing a durational period, the employment is presumed terminable at the will of either party and the employee states no cause of action or breach of contract by alleging that he or she has been discharged (Martin v. New York Life Ins. Co., 148 N.Y. 117, 42 N.E. 416 [N.Y. 1895]).

   Weiner v. McGraw-Hill, Inc., 443 N.E.2d 441, 446 (N.Y. 1982) (Wachtler, J., dissenting).
   
   

     In view of today's record high unemployment, and considering that between 1975 and 1980 approximately 60,000 industry-related jobs in New York were lost as a direct result of business migration, I cannot join the majority's bestowal of contractual rights based upon documents which make it all too clear that no contractual rights were ever intended.

   Id. at 447 (Wachtler, J., dissenting).

   Wachtler's first paragraph shows that his respect for blindly following precedent that was established 87 years earlier in Martin. As was argued at the beginning of this essay, the doctrine of at-will employment in Martin was shown to be bad law, which followed a mistake in Wood's treatise. Even after scholarly criticism by authors of law review articles clearly revealed the mistake in Martin, the judges in New York State continued to follow the law established in Martin. It is not just a problem with New York State, as judges in other states have also followed old cases that are based on Wood's mistake. It is scary that judges have a greater respect for blindly following precedent than desire to make a fair decision.
   
   The second paragraph that is quoted above from Wachtler's dissent is even more alarming: Wachtler shows a concern for possibly offending employers and causing a "migration" of businesses from New York State. Wachtler's deference to businesses and to the economic policy of New York State is inappropriate. A judge should base his/her decision on the controversy before the court, without regard to "partisan interests, public clamor, or fear of criticism." American Bar Association Model Code of Judicial Conduct, Canon 2(B)(2) (1990).
   
   There is no doubt that many judges and legislators fear a reaction from businesses if at-will employment law is ended. However, if all states in the USA changed their law at about the same time, there would be no refuge in the USA for employers who wanted to abuse their employees, hence, there would be no migration.
   
   One year later, the highest court in New York State heard another wrongful discharge case. The facts of this following case are simple: a employee was terminated in 1980 at age 59 years, after 23 years of service. The employee alleged that he was fired because of his age and because he disclosed accounting improprieties to top management. The issue before the court was whether plaintiff's claim for wrongful discharge was a valid cause of action in New York State. The court said:

   ... plaintiff urges that the time has come when the courts of New York should recognize the tort of abusive or wrongful discharge of an at-will employee. To do so would alter our long-settled rule that where an employment is for an indefinite term it is presumed to be a hiring at will which may be freely terminated by either party at any time for any reason or even for no reason. [two citations omitted] Plaintiff argues that a trend has emerged in the courts of other States to temper what is perceived as the unfairness of the traditional rule by allowing a cause of action in tort to redress abusive discharges. He accurately points out that this tort has elsewhere been recognized to hold employers liable for dismissal of employees in retaliation for employee conduct that is protected by public policy. Thus, the abusive discharge doctrine has been applied to impose liability on employers where employees have been discharged for disclosing illegal activities on the part of their employers, where employees have been terminated due to their service on jury duty, and where employees have been dismissed because they have filed workers' compensation claims. [six citations omitted] Plaintiff would have this court adopt this emerging view. We decline his invitation, being of the opinion that such a significant change in our law is best left to the Legislature.
   
     Those jurisdictions that have modified the traditional at-will rule appear to have been motivated by conclusions that the freedom of contract underpinnings of the rule have become outdated, that individual employees in the modern work force do not have the bargaining power to negotiate security for the jobs on which they have grown to rely, and that the rule yields harsh results for those employees who do not enjoy the benefits of express contractual limitations on the power of dismissal. Whether these conclusions are supportable or whether for other compelling reasons employers should, as a matter of policy, be held liable to at-will employees discharged in circumstances for which no liability has existed at common law, are issues better left to resolution at the hands of the Legislature. In addition to the fundamental question whether such liability should be recognized in New York, of no less practical importance is the definition of its configuration if it is to be recognized.
   
     Both of these aspects of the issue, involving perception and declaration of relevant public policy (the underlying determinative consideration with respect to tort liability in general, [two citations omitted] are best and more appropriately explored and resolved by the legislative branch of our government. The Legislature has infinitely greater resources and procedural means to discern the public will, to examine the variety of pertinent considerations, to elicit the views of the various segments of the community that would be directly affected and in any event critically interested, and to investigate and anticipate the impact of imposition of such liability. Standards should doubtless be established applicable to the multifarious types of employment and the various circumstances of discharge. If the rule of nonliability for termination of at-will employment is to be tempered, it should be accomplished through a principled statutory scheme, adopted after opportunity for public ventilation, rather than in consequence of judicial resolution of the partisan arguments of individual adversarial litigants.
   
     Additionally, if the rights and obligations under a relationship forged, perhaps some time ago, between employer and employee in reliance on existing legal principles are to be significantly altered, a fitting accommodation of the competing interests to be affected may well dictate that any change should be given prospective effect only, or at least so the Legislature might conclude.
   
     For all the reasons stated, we conclude that recognition in New York State of tort liability for what has become known as abusive or wrongful discharge should await legislative action. [footnote omitted]

   Murphy v. American Home Products, 448 N.E.2d 86, 89-90 (N.Y. 1983).

   The above words from Murphy are not an aberration by the highest court in New York State. Nine years later, the same court again expressed the same view: if the tort of wrongful discharge were to exist in New York State, then this tort would need to be created by the legislature, because the judges were unwilling to add it to the common law of New York State, despite the fact it was the common law in most other states of the USA. Wieder v. Skala, 609 N.E.2d 105, 110 (N.Y. 1992).
   
   The concern expressed by the New York Court of Appeals in Murphy seems strange. The Court is correct that "standards ... applicable to the multifarious types of employment" is something that a legislature might properly consider. But such considerations are not part of the common law, which evolves one case at a time, each case being decided on its specific facts. I read the court's words in Murphy as an excuse, not a principled reason. Indeed, many of the alleged reasons in Murphy are conclusory assertions, without any citations to authority.
   
   Later in Murphy, the following sentence appears:

   We are of the view that this aggregate of rights and obligations should not be approached piecemeal but should be considered in its totality and then resolved by the Legislature.

   Murphy, 448 N.E.2d at 92, n.2.

   I'm sorry, but waiting for the perfect resolution means we will wait forever. It is the nature of the common law that judges approach one case at a time, piecemeal. This is not a criticism of the common law, but an essential way that common law differs from statutes. Looking backwards at dozens of cases, one can abstract general principles from many cases, which is how the broad view of the common law is created. A legislature can take a broad view in a few days or weeks of deliberations, but that does not mean that statutes are better solutions to society's problems than common law. Both the common law and statutes are valid ways of solving disputes and making law serve the needs of society.
   
   In a more recent case in New York State, which is discussed in my essay on the New York Court of Appeals refused to recognize plaintiff's potential cause of action for abusive discharge, because that court insisted that only the state legislature could create public-policy exceptions to at-will employment and the legislature had not done that. Wieder v. Skala, 609 N.E.2d 105, 110 (N.Y. 1992).
   
   Incidentally, the court in Wieder admits that "the arguments are persuasive and the circumstances here compelling" for creating such a public-policy exception to at-will employment. This is one of the qualities of judges that most exasperates me. As a research scientist (I earned a Ph.D. in physics in 1977 and I had 18 years of post-doctoral research experience before I enrolled in law school.), I would be a fool to follow a rule in science or engineering that did not make sense. But judges routinely follow rules that are either nonsensical or antiquated, instead of doing what needs to be done to effectuate justice and fair play. Maybe the legislature should establish public policy, but the fact is that the legislature has not done that, despite the need. So, courts should do what needs to be done to protect individuals who have been wronged.
   
   Moreover, the court's creation of an implied-in-fact contract, which the employer breached by terminating Wieder, was an artifical solution to the problem. A much more direct and satisfying solution would be to declare that Wieder's employment had been wrongfully terminated, and then award Wieder both compensatory and punitive damages. But, to find wrongful termination, the court would first need to find a public-policy exception to at-will employment, and the court was not willing to create public policy. But isn't it obvious that requiring an attorney to violate the Rules of Professional Responsibility is contrary to public policy? If it is not obvious, then let's change the Rules of Professional Responsibility, to make the Rules accurately reflect good public policy!
   
   

   ---

   
   In a case in which the Massachusetts Supreme Court refused to make a public-policy exception to at-will employment, Chief Justice Liacos gently chided his colleagues in a dissenting opinion:

     I disagree with the court's conclusion that a hospital employer violates no public policy when it fires an employee for alerting supervisors to matters detracting from good patient care. The court has construed far too narrowly the public policy exception to the doctrine of employment at will. Moreover, in demanding a statutory basis for public policy, the court has relinquished to the Legislature its role in shaping the common law. I dissent.

   Wright v. Shriners Hospital, 589 N.E.2d 1241, 1246 (Mass. 1992) (Liacos, J., dissenting).
   
   

   It is a proper role of the courts to construe the boundaries of "public policy" and thereby develop common law remedies available to at-will employees who are terminated. [citation deleted] I find it disturbing, therefore, that the court would relinquish this role, by requiring a statutory basis for public policy.

   Id. at 1246-47 (Liacos, J., dissenting).

   
   

   proper role of common law

   In the USA, the three branches of government (i.e., executive, legislative, and judicial) are equal. One of the good features of these three equal branches is that each branch checks and balances the other two branches. Judges should defer to legislation that has a rational basis, unless the statute is unconstitutional. However, on topics where the legislature has been silent, judges are free to create and revise the common law. Not just "free" to create and revise the common law — it is the responsibility of judges to participate in the evolution of the common law. In particular, judges created the legal doctrine of at-will employment, and judges are free to abolish or modify the doctrine of at-will employment. If the legislature believes that the common law is mistaken, the legislature – as part of the system of checks and balances – can pass a statute that, in effect, overrules the common law.
   
   Legislatures – which are not only popularly elected but also dependent on businesses, people, and organizations for campaign contributions – are notoriously reluctant to address a political "hot potato" like ending at-will employment, which would offend businesses. As mentioned above, ending at-will employment might also offend the executives of labor unions, by removing one of the reasons for the existence of labor unions. Hence, legislators might be happy if judges would reform the common law, and correct the problem without involving the legislators.
   
   Judicial reluctance to alter the absolute nature of at-will employment has restricted the availability of judicial remedies for wrongful discharge in the USA, with the consequence that prudent employees will follow the three monkey rule (i.e., hear no evil, see no evil, speak no evil) in order to avoid termination of their employment. The lack of protection for whistleblowers has resulted in damage to American society, in which wrongs — and even illegal conduct — are concealed. Just as bad, unjust or unethical decisions by management are legally protected.
   
   As a result of judicial reluctance in this area, even in states which do permit the tort of wrongful discharge of at-will employees for public policy reasons, the tort offers little or no protection to most employees, because the public-policy exception is so narrowly construed by judges.
   
   As mentioned earlier legislatures are unlikely to end at-will employment. And, as mentioned here, judges have been reluctant to make an expansive public policy exception and judges have absolutely refused to end the doctrine of at-will employment. So, we have a stalemate.
   
   

   ---

   my proposal

   The quick way to stop the propagation of defective common law is for legislatures to pass a statute. In my essay on Professional Ethics & Wrongful Discharge, I made a proposal for a limited statute that would protect a learned professional who acts ethically and lawfully, in defiance of their employer's wishes.
   
   It is not difficult to draft a statute that entirely abolishes at-will employment. The problem is obtaining consensus and getting the statute enacted into law.
   
   Legislatures could improve the current situation in one of two ways:
   1. abolish at-will employment
      A statute should say that an employer can terminate employment only for a "good cause", as determined by impartial arbitrators, a judge, or a jury. (Such a statute should require "good cause" for termination of employment, because specifically listing protected activities that are not grounds for termination of employment risks being underinclusive.)   or,
   2. make an explicit finding of public policy
      The legislature could enact a statute that says "It is the public policy of this state that employment not be terminated for either abusive, arbitrary, irrational, or wrongful reason(s). Judges hearing wrongful discharge cases shall consider this public policy."
   
   Several commentators have noted that there has been abundant experience in the USA with using arbitration to decide wrongful discharge claims presented by members of labor unions.
   • Clyde W. Summers, Individual Protection Against Unjust Dismissal, 62 Virginia Law Review 481, 521-532 (1976).
   • Theodore J. St. Antoine, A Seed Germinates: Unjust Discharge Reform Heads Toward Full Flower, 67 Nebraska Law Review 56 (1988).
   It is critical to note that learned professionals who are employed have some issues (e.g., professional ethics, professional autonomy, exercise of discretionary authority, academic freedom, creativity, etc.) that have not been encountered in situations involving laborers in labor unions. If arbitration is to be used for wrongful discharge cases involving learned professionals, the nonattorney member(s) of the arbitration panel should include learned professionals, not laborers, and not managers of manual laborers.
   
   

   ---

   Contract Law

   Employment contracts are a species of contracts. As such, breach of employment contracts should be interpreted according to conventional rules of contract law. However, courts routinely grant the employer's motion for summary judgment in wrongful discharge cases, because the doctrine of at-will employment says that an employer can terminate an employee at any time and for any reason (even a "morally repugnant" reason), hence, as a matter of law, it is not possible for an employee to be discharged for an unacceptable reason. The following section of this essays shows that the courts' interpretation of at-will employment contracts is inconsistent with conventional contract law, which is yet another reason to change the way courts treat at-will employment.
   
   I am not the first attorney to recognize that courts do not apply conventional contract law to cases involving an alleged breach of an employment contract. For example, see: Note, Protecting At Will Employees Against Wrongful Discharge: The Duty to Terminate Only in Good Faith, 93 Harvard Law Review 1816, 1825-1839 (1980) (suggesting that courts use the duty of good faith in contract law to protect employees from wrongful discharge); J. Peter Shapiro and James F. Tune, Note, Implied Contract Rights to Job Security, 26 Stanford Law Review 335, 354-356 (1973-74) (discussing, in passing, detrimental reliance by employee); Lawrence E. Blades, Employment at Will v. Individual Freedom: On Limiting the Abusive Exercise of Employer Power, 67 Columbia Law Rev. 1404, 1420-1421 (1967) (tersely mentioning adhesion contracts).
   
   There are two court cases in which the employee prevailed and in which conventional contract law was applied to an at-will employment contract. The New Hampshire Supreme Court held, in Monge v. Beebe Rubber Co., 316 A.2d 549, 551 (N.H. 1974), that contract law prevents terminations of employments that are "motivated by bad faith or malice or based on retaliation", but six years later this same Court retreated from that broad view. Howard v. Dorr Woolen Co., 414 A.2d 1273, 1274 (N.H. 1980) ("We construe Monge to apply only to a situation where an employee is discharged because he performed an act that public policy would encourage, or refused to do that which public policy would condemn."). A Court of Appeal in California held, in Cleary v. American Airlines, 168 Cal.Rptr. 722 (Calif.App. 1980), that an at-will employee's 18 years of satisfactory service, together with the employer's policy, estopped the employer from discharging the employee without "good cause". Cleary is often ignored, perhaps because the California Supreme Court, in Foley v. Interactive Data, 765 P.2d 373, 401, n.42 (Calif. 1988), disapproved of Cleary providing a tort remedy for breach of contract. The opinion in Cleary is unusual in that it considers conventional contract law (e.g., implied-in-law covenant of good faith and fair dealing, common law of the job) in an at-will employment contract.
   
   

   conventional contract law

   The doctrine of at-will employment overrides basic concepts in well-established contract law, such as:
   • refusing to enforce an agreement that is contrary to public policy
     Restatement Second of Contracts §§ 178-179 (1981).
     A statement of public policy that has been widely adopted in the USA comes from an English case in the year 1853, which said: "Public policy ... is that principle of the law which holds that no subject can lawfully do that which has a tendency to be injurious to the public, or against the public good, which may be termed, as it sometimes has been, the policy of the law, or public policy in relation to the administration of the law."
     Egerton v. Brownlow, 4 H.L.Cas. 1, 196 (1853)(Lord Truro, J.).
     (A long list of citations to cases in the USA that accept this statement is found above.)
     
     
   • applying the requirement of "good faith and fair dealing"
     Restatement Second of Contracts § 205 (1981).
     
     
   • refusing to enforce an unconscionable term
     Restatement Second of Contracts § 208 (1981).
     
     
   • giving effect to reasonable expectations
     Restatement Second of Contracts §§ 203(a), 204, 211(3), and comment e to § 211(1981).
     
     
   • if a term is ambiguous, choosing a reasonable meaning that operates against the drafter of the contract.
     Restatement Second of Contracts § 206 (1981).
   
   And, as discussed above, when judges did consider public policy, judges interpreted public policy very narrowly — basing public policy only on constitution, statutes, and – sometimes – government regulations. Those limited sources of public policy are too narrow to protect employees from most cases of wrongful discharge.
   
   

   adhesion contracts

   A developing concept in contract law is the notion of adhesion contracts, which have the following characteristics:
   • inequality of bargaining power between the parties to the contract and
   • weaker party is offered a Hobson's Choice: either accept all of the terms in a standard form contract prepared by the stronger party or go elsewhere.
   In an adhesion contract, there is no opportunity for bargaining, which is a basic element of contract law. Hence, it is illusory to speak of either a "negotiated bargain" or "freedom of contract" in the context of adhesion contracts.
   
   The concept of adhesion contracts comes from France, and was introduced into the USA by Patterson, The Delivery of a Life-Insurance Policy, 33 Harvard Law Review 198, 222, n.106 (1919). The concept was further described in a frequently cited paper by Kessler, Contracts of Adhesion: Some Thoughts About Freedom of Contract, 43 Columbia Law Review 629 (1943).
   
   Around the middle of the Twentieth Century, the term "adhesion contract" began to be used by courts in the USA that examined insurance policies. See, e.g.,
   Bekken v. Equitable Life Assur. Soc., 293 N.W. 200, 212 (N.Dak. 1940);
   Farkas v. New York Fire Ins. Co., 76 A.2d 895 (N.J. 1950);
   Steven v. Fidelity and Casualty Co., 377 P.2d 284 (Calif. 1962).
   
   Insurance companies are heavily regulated by the state – A state executive examines and approves the form contracts used by insurance companies in each state, to protect consumers. In other common situations involving adhesion contracts (e.g., transportation, electric power, water, telephone, etc.) there is also regulation by government agencies to protect consumers. Terms of hotel/motel contracts with "guests" are generally specified in state statutes, again to protect the consumer. However, employment contracts for at-will employees have generally escaped scrutiny by the government, except for a few statutory exceptions for racial discrimination, age discrimination, denial of pension benefits, etc.
   
   Once courts determine that there is an adhesion contract, the courts generally scrutinize the terms of the contract, instead of accepting the contract as written. Courts sometimes strike terms in adhesion contracts on the above-mentioned grounds of being contrary to public policy, bad faith/unfair dealing, refusing to enforce an unconscionable term, or giving effect to the reasonable expectations of the weaker party. Restatement Second of Contracts comments c and e to § 211 (1981).
   
   The concept of adhesion contracts is not a new rule of contract law, but a label that signals the need for a higher degree of judicial scrutiny.
   
   The U.S. Congress made findings of fact in a labor statute that noted "the inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract and employers ...." 29 USC § 151. This official recognition of inequality of bargaining power should also be applicable to nonunion employees.
   
   Occasionally, one finds an employment contract case where the judge recognized, in passing, that the employment contract is an adhesion contract. Most of these cases concern either (1) clauses in employment contracts to use arbitration or (2) clauses in employment contracts that contain a covenant not to compete after the employment contract is ended. For example:
   • Neal v. State Farm Ins. Co., 10 Cal.Rptr. 781, 784 (Calif.App. 1961);
   • Hopfauf v. Bismarck Tire Center, Inc., 234 N.W.2d 224, 225 (N.Dak. 1975);
   • Vasquez v. Glassboro Service Ass'n, Inc., 415 A.2d 1156, 1164-1166 (N.J. 1980);
   • Landro v. Glendenning Motorways, Inc., 625 F.2d 1344, 1354 (8thCir. 1980);
   • Graham v. Scissor-Tail, Inc., 623 P.2d 165, 170-173, 175-177 (Calif. 1981);
   • Maynard v. Bd. Edu. of County of Wayne, 357 S.E.2d 246, 251 (W.V. 1987);
   • Stirlen v. Supercuts, Inc., 60 Cal.Rptr.2d 138, 145-147 (Calif.App. 1997);
   • Herweyer v. Clark Highway Services, Inc., 564 N.W.2d 857, 860 (Mich. 1997);
   • Armendariz v. Foundation Healthcare, 80 Cal.Rptr.2d 255, 263-266 (Cal.App. 1998), review granted, 973 P.2d 51 (1999);
   • Potter v. Hawaii Newspaper Agency, 974 P.2d 51, 64 (Hawaii 1999).
   
   In nearly all employment contract cases, and in nearly all wrongful discharge cases that I have read, the phrase "adhesion contract" does not appear in the reported opinion, as if employment contracts are somehow exempt from conventional contract law. Judges do not mention "adhesion contract", even when they find a public-policy exception to at-will employment.
   
   I did a search of all the reported cases from state courts in the USA, in the WESTLAW database on 29 July 2000 that mention "at-will", "employ!", "adhesion", and "contract" all in the same paragraph. I found only four cases involving an employment contract. The most interesting of these cases was Jennings v. Minco Technol. Labs, 765 S.W.2d 497 (Tex.App. 1989), which involved an at-will employment contract modified by the employer to include mandatory urine testing for use of illegal drugs. Jennings argued violation of her privacy rights by such testing. Jennings not only lost her case, but was also ordered to reimburse her employer for $ 45,000 in legal fees. Adding insult to injury, the court in Jennings just barely mentioned the adhesion contract argument of Jenning's attorney, without really considering the concept of the employment contract as a contract of adhesion:

   ... [Jennings] views the "at will doctrine" quite differently: it is a monster having a lawful face and a wicked heart. Jennings argues, without attempting to establish, that modern conditions enable employers generally to impose, through contracts of adhesion, the "at will" employment relation. Having then the legal right to terminate the relation "for any or no reason," employers use the right to coerce employee submission to degrading work conditions, such as the invasion of privacy feared by Jennings.

   Jennings, 765 S.W.2d at 502, n.3.

   
   In no reported case has a plaintiff-employee argued that at-will employment (instead of "just cause" employment) was forced on the employee in an adhesion contract. I would expect courts to reject this argument, because the doctrine of at-will employment — for reasons not explained by courts — overrides conventional contract law. (It is particularly ludicrous when judges often write several pages of excruciating detail to explain a well-known rule of law in the context of commercial contracts, with citations to many cases. But these same judges zip through an at-will employment contract case in just a few sentences, skipping analytical steps, omitting legal reasoning, ignoring the bogus origin of at-will employment, failing to apply rules of conventional contract law, ....) However, a courageous state supreme court that is willing to change the common law might accept the argument that, given that employment contracts are adhesion contracts, freedom of an employer to dismiss an employee for either a bad reason or no reason is either unconscionable, bad faith, or contrary to the reasonable expectations of the employee, and therefore a breach of the employment contract. I personally prefer to keep wrongful discharge as a tort action, but, one way or another, we must end the doctrine of at-will employment. The real point here is that the courts' rigid application of the doctrine of at-will employment is inconsistent with conventional contract law.
   
   

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   Conclusion

   The doctrine of at-will employment, in which an employer can terminate employment at any time and for any reason, was invented by Horace Wood in his legal treatise that was published in 1877. Despite the fact that he offered no reason for his rule, and that none of his four citations supported his rule, courts in the USA rapidly adopted Wood's Rule as the common law. The Tennessee Supreme Court in 1884 declared that any reason included a "morally wrong" reason, a statement that is still the law in most of the USA today.
   
   In my opinion, the doctrine of at-will employment was a major mistake, which continues to be propagated by judges with more respect for stare decisis, than either respect for fairness or desire to protect weaker parties from abuse.
   
   Several commentators have expressed reasons why legislatures are unlikely to end the doctrine of at-will employment. And judges are reluctant to make broad public-policy exceptions to the doctrine of at-will employment. Thus, the law in the USA is currently in a stalemate.
   
   I hope this essay encourages people in the USA to write their state legislators and demand a statute that protects employees from arbitrary, abusive, or wrongful termination of employment.
   
   Given:
   1. the lack of genuine bargaining on each individual employment contract,
      
      
   2. the unreasonably harsh rule of at-will employment (i.e., allowing the employer to terminate employment for "morally repugnant" reasons, such as the employee's insistence on both ethical and lawful behavior, or the employer's invasion into the private life of the employee),
      
      
   3. the need to protect the weaker party (i.e., employee) from abuse by a stronger party (i.e., employer),
      
      
   4. the difficulty of professionals in finding another job in their narrow specialty (or looking at the issue from the other direction: employers generally only seek new senior employees who already have experience in a particular narrow area),
      
      
   5. the immense importance of employment to people in the USA, and
      
      
   6. the potential for coercion by an employer to cause an employee to behave in an unlawful or unethical way, or to behave in a way that harms the public interest,
   it is appropriate for a statute to regulate employment contracts to fairly protect the employees from abusive, arbitrary, or irrational dismissal from employment.
   
   

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