Like most states in the country, Maryland, Virginia, and D.C. are all at-will employment jurisdictions. This means that employees and employers can terminate the employment relationship at any time, for any reason (or no reason at all), and without notice. Of course, the at-will relationship does not mean that employers can fire their employees for discriminatory or retaliatory reasons. However, it does mean that employees have no right to dispute their terminations on the grounds that they were fired for unfair, incorrect, or generally bad reasons. In at-will states, there is no requirement that employers only terminate their employees for “good cause.”
There are some exceptions to the default at-will relationship, however. For example, some employees have contracts that place restrictions on when they can and cannot be terminated. This issue recently came before the Fourth Circuit in the case of Warfield v. Icon Advisers. In this case, the Plaintiff had an employment contract which stated that all disputes needed to be resolved through mandatory arbitration. Although his contract did not explicitly alter the default at-will status, the Plaintiff nonetheless argued that his arbitration provision implied that he could only by fired for cause. The arbitrator agreed with the Plaintiff and awarded him $1.2 million. However, a North Carolina district court vacated this award on the grounds that the Plaintiff was an at-will employee who was not entitled to any relief simply because he was fired without good cause.
Surprisingly, the Fourth Circuit sided with the Plaintiff and reinstated the $1.2 million award. According to the Court, there is currently disagreement about whether arbitration agreements tend to alter the at-will relationship and afford employees greater protections. Although the Fourth Circuit declined to weigh in on this issue, it held that “[i]n the absence of clearly on-point and controlling precedent, the fact that courts disagree on a particular legal question weighs against second-guessing an arbitrator’s award.”
What does this mean for employers? It means that mandatory arbitration provisions could potentially come with a price – namely, sacrificing the at-will relationship. Employers who want to implement mandatory arbitration for their employees should first consult with an attorney to ensure that they don’t inadvertently alter their status of their workers.
If you have questions about the at-will employment, or any other area of employment law, contact Thatcher Law Firm at 301-441-1400. www.ThatcherLaw.com. We help employees protect their rights against various forms of discrimination and retaliation. We also provide training to employers at the corporate and small business levels on a variety of employment issues ranging from discrimination/retaliation to Covid-19. Follow us on: