Research Handbooks in Law and Economics series
Edited by Cynthia L. Estlund and Michael L. Wachter
Chapter 10: From just cause to just notice in reforming employment termination law
Employment at will, it is often said, means that employers can fire for any reason or no reason at any time with or without notice. For over forty years, the discourse surrounding employment termination has focused almost exclusively on a single issue: the desirability of changing the first part of this equation. Scholars of varying ideologies and methodologies have emphatically challenged or defended the idea that employers have an absolute right to terminate irrespective of their reasons for doing so. This debate, vigorous though it has been, has come at the expense of a broader discussion of the goals of termination regulation and its inevitable costs. As currently framed, just cause advocates have the normative upper hand, having grounded their arguments in principles of fundamental fairness. However, they have given only limited attention to the costs of wrongful discharge laws and their ultimate implications for workers. Defenders of employment at will, on the other hand, have frequently invoked costs in seeking to maintain employment at will, arguing that a just cause requirement will make employment terminations more expensive. However, these scholars have not adequately grappled with the human toll exacted by unforeseen termination. Most problematic, scholars on both sides of the debate, in calling for or condemning just cause, usually compare such a system to a pure at-will regime, one in which employers enjoy almost unfettered discretion to terminate. Thus neither camp has sufficiently considered the inherent costs or the ultimate effectiveness of the prevailing employment termination system, which includes both a strong at-will presumption and numerous exceptions through which workers can question the reasons for their termination.
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