New York is an At-Will Employment State: True or False ?

If you answered true to the above question, you are correct. If you answered false to the above question, you are correct in all meaningful respects. The best answer to the question is: Both of the above.

Historically, employment relationships were a voluntary relationship, which either party could end at will. Only when people entered into employment contracts did those circumstances change. The advent of job protections for civil servants and the unionization of the workforce protected employees’ rights to continued employment and reduced the number of jobs which were at-will, but the vast majority of private employees continued in jobs which could be terminated at any time by the employee or the employer, for any reason, or for no reason at all.

The main exception to at-will employment was that an employee could not be terminated for an illegal reason or a reason that violated public policy. Long recognized examples include that an employee could not be fired for filing a Workers’ Compensation claim, for attempting to organize workers, or for participating in the political process. In the 1960s and 1970s, we saw racial discrimination, gender discrimination, and age discrimination added to a relatively short list of what are now commonly called “protected statuses.” In many instances, the methods for preventing improper action against these protected statuses were relatively ineffective. The administrative agencies charged with enforcing the public policies behind these protections were small and underdeveloped.

According to many observers, the enactment of the Americans with Disabilities Act (ADA) in 1990 changed the rules of the game forever. The ADA was far reaching in that it required employers and places of public accommodations to make changes to accommodate people with disabilities. It also gave rise to new litigation strategies to enforce the rights contained in the ADA. Disabilities rights groups began challenging zoning ordinances which prohibited group homes for people with disabilities in residential neighborhoods, advocated for physical accessibility in public spaces and so on. These advocacy agencies also worked with individuals with disabilities to break down barriers in the workforce. Suddenly, many physical limitations needed to be accommodated in the workforce, even by small employers, and the administrative agency given jurisdiction over enforcing this law, the Equal Employment Opportunity Commission (EEOC), was given resources to begin an expansion which continued through the Obama Administration.

The increased size and influence of administrative agencies, combined with a steady increase in the types of protected statuses recognized at the state and federal level, have brought us to a point where nearly every employee has some type of protected status, including those established by family relationships, which might cause the employee to use, leave time. The existence of a protected status gives an employee the ability to go to an administrative agency and make a complaint regarding conditions at work, or the termination of the employee. The New York Division of Human Rights (NYDHR) and the EEOC have very user-friendly forms where individuals can identify themselves as having a protected status and having been discriminated against in some way based on that protected status. In reality, those two statements are enough to have an administrative agency begin an investigation, which will require a company to provide information and documentation to respond to what may be very general and/or baseless complaints alleging discrimination or harassment.

While the laws provided the foundation, it is the ease of access and the power of administrative agencies that have eroded the concept of at-will employment in New York. When clients are considering terminating an employee, I will usually discuss with them whether there are any protected statuses or rights that have recently been exercised which might permit the employee to file a claim with an administrative agency. In such circumstances, the decision regarding termination or other adverse employment action is not as simple as it would have been 40 years ago.

In those circumstances, the employee will be able to point to a protected status and the employer’s action, and ask the administrative agency to draw a connection between the two, and conclude that the employee was discriminated against. The timing of such actions can often present a problem for the employer, unless the employer is able to establish that there were other genuine business reasons for the adverse action. This is where prior documentation of performance issues becomes important. It is also an opportunity for the employer to carefully review whether the individual making the decision to terminate actually might be motivated by intentions that might be discriminatory, even if well-meaning. In these instances, it is important for the employer to recognize that relying on the at-will doctrine may result in unintended consequences.