Managing Employee Performance

One of the reasons companies have processes and human resources departments is because there are employment laws. This resource starts with an employee dilemma. You will be introduced to various performance issues and employee rights as you read.

Employee Rights

Job Protection Rights

If HR doesn't understand or properly manage employee rights, lawsuits are sure to follow. It is the HR professional's job to understand and protect the rights of employees. In the United States, the employment-at-will principle (EAW) is the right of an employer to fire an employee or an employee to leave an organization at any time, without any specific cause. The EAW principle gives both the employee and employer freedom to terminate the relationship at any time. There are three main exceptions to this principle, and whether they are accepted is up to the various states:

  1. Public policy exception. With a public policy exception, an employer may not fire an employee if it would violate the individual state's doctrine or statute. For example, in Borse v. Piece Goods Shop in Pennsylvania, a federal circuit court of appeals ruled that Pennsylvania law may protect at-will employees from being fired for refusing to take part in drug test programs if the employee's privacy is invaded. Borse contended that the free speech provisions of the state and of the First Amendment protected the refusal to participate. Some public policy exceptions occur when an employee is fired for refusing to violate state or federal law.
  2. Implied contract exception. In a breach of an implied contract, the discharged employee can prove that the employer indicated that the employee has job security. The indication does not need to be formally written, only implied. In Wright v. Honda, an Ohio employee was terminated but argued that the implied contract exception was relevant to the employment-at-will doctrine. She was able to prove that in orientation, Honda stressed to employees the importance of attendance and quality work. She was also able to prove that the language in the associate handbook implied job security: "the job security of each employee depends upon doing your best on your job with the spirit of cooperation." Progress reports showing professional development further solidified her case, as she had an implied contract that Honda had altered the employment-at-will doctrine through its policies and actions.
  3. Good faith and fair dealing exception. In the good faith and fair dealing exception, the discharged employee contends that he was not treated fairly. This exception to the employment-at-will doctrine is less common than the first two. Examples might include firing or transferring of employees to prevent them from collecting commissions, misleading employees about promotions and pay increases, and taking extreme actions that would force the employee to quit.

Table 10.1 State's Acceptance of Employment-at-Will Exceptions

State Public-Policy Exception Implied-Contract Exception Good Faith and Fair Dealing Exception
Alabama no yes yes
Alaska yes yes yes
Arizona yes yes yes
Arkansas yes yes no
California yes yes yes
Colorado yes yes no
Connecticut yes yes no
Delaware yes no yes
District of Columbia yes yes no
Florida no no no
Georgia no no no
Hawaii yes yes no
Idaho yes yes yes
Illinois yes yes no
Indiana yes no no
Iowa yes yes no
Kansas yes yes no
Kentucky yes yes no
Louisiana no no no
Maine no yes no
Maryland yes yes no
Massachusetts yes no yes
Michigan yes yes no
Minnesota yes yes no
Mississippi yes yes no
Missouri yes no no
Montana yes no no
Nebraska no yes no
Nevada yes yes yes
New Hampshire yes yes no
New Jersey yes yes no
New Mexico yes yes no
New York no yes no
North Carolina yes no no
North Dakota yes yes no
Ohio yes yes no
Oklahoma yes yes no
Oregon yes yes no
Pennsylvania yes no no
Rhode Island no no no
South Carolina yes yes No
South Dakota yes yes no
Tennessee yes yes no
Texas yes no no
Utah yes yes yes
Vermont yes yes no
Virginia yes no no
Washington yes yes no
West Virginia yes yes no
Wisconsin yes yes no
Wyoming yes yes yes
Bold text indicates a state with all three exceptions.
Italic text indicates a state with none of the three exceptions.


When one of the exceptions can be proven, wrongful discharge accusations may occur. The United States is one of the few major industrial powers that utilize an employment-at-will philosophy. Most countries, including France and the UK, require employers to show just cause for termination of a person's employment. The advantage of employment at will allows for freedom of employment; the possibility of wrongful discharge tells us that we must be prepared to defend the termination of an employee, as to not be charged with a wrongful discharge case.

Employees also have job protection if they engage in whistleblowing. Whistleblowing refers to an employee's telling the public about ethical or legal violations of his or her organization. This protection was granted in 1989 and extended through the Sarbanes-Oxley Act of 2002. Many organizations create whistleblowing policies and a mechanism to report illegal or unethical practices within the organization.

Another consideration for employee job protection is that of an implied contract. It is in the best interest of HR professionals and managers alike to avoid implying an employee has a contract with the organization. In fact, many organizations develop employment-at-will policies and ask their employees to sign these policies as a disclaimer for the organization.

A constructive discharge means the employee resigned, but only because the work conditions were so intolerable that he or she had no choice. For example, if James is being sexually harassed at work, and it is so bad he quits, he would need to prove not only the sexual harassment but that it was so bad it required him to quit. This type of situation is important to note; should James's case go to court and sexual harassment and constructive discharge are found, James may be entitled to back pay and other compensation.

The Worker Adjustment and Retraining Notification Act (WARN) requires organizations with more than one hundred employees to give employees and their communities at least sixty days' notice of closure or layoff affecting fifty or more full-time employees. This law does not apply in the case of unforeseeable business circumstances. If an employer violates this law, it can be subject to back pay for employees. This does not include workers who have been with the organization for less than six months, however.

Retaliatory discharge means punishment of an employee for engaging in a protected activity, such as filing a discrimination charge or opposing illegal employer practices. For example, it might include poor treatment of an employee because he or she filed a workers' compensation claim. Employees should not be harassed or mistreated should they file a claim against the organization.