At-Will Employment Explained
Aug. 20, 2019
Any successful business owner knows that having a great team of great employees behind them is critical for moving the company forward. Sometimes, however, if they don’t feel an employee is performing well, they have to let them go. While this is reasonable, some employers can terminate employment contracts unfairly, leaving the employee in distress and a tough financial situation. Understanding Ohio employment law to ensure that this process is carried out fairly and lawfully is imperative. Doing so will help employees familiarize themselves with their rights and feel confident about taking action if necessary.
The State of Ohio follows the “at-will” employment doctrine. This grants the employer the right to terminate employment for any reason – or indeed, no reason at all – providing in doing so he or she is not violating any state or federal law. In its simplest form, this means that employers are allowed to fire employees as they see fit and cannot be held liable for doing so provided that the reason they give (or do not give) doesn’t break any other law on the state or federal level. However, there are some restrictions:
Restrictions Regarding the At-Will Doctrine
If an employment contract contains information or an agreement that contradicts the “at-will” doctrine, employers must adhere to the terms of the contract as this would supersede it. Both parties are held to the agreed terms within an employment contract, so if you are starting a new role and wish to negotiate reasons for termination and resignation, these can be accepted and stated in your contractual agreement.
Statutory limitations in Ohio may mean that the “at-will” relationship is restricted and ensures that employers are unable to get away with wrongful dismissal – for example, if an employer terminates employment based on discrimination against a person’s race, color, religion, sex, national origin, age, or disability. However, if a business can prove discriminatory practice is necessary, for example, if a female role is required, then the at-will doctrine will remain in place.
Minority Shareholder Exception
Another restriction to the “at-will” agreement is if the employee is a shareholder in that company. In previous cases, for example, Crosby v. Beam, the Ohio Supreme Court ruled that the employers and majority shareholders owed a heightened fiduciary duty to minority shareholders and allowed minority shareholders to bring an action against the majority shareholders for a breach of fiduciary duty. This example has been used to defend minority shareholders’ employment from being terminated, with the argument being that a minority shareholder-employee in a corporation cannot operate under the same terms as an “at-will” employee and therefore their employment may not be terminated at any time for any reason. Rather, a “legitimate business reason” must be stated instead.
In Ohio, the long-standing “at-will” rule means employers are legally allowed to terminate a person’s employment unless it is bound by an employment agreement which includes contradictory statements or the reasons for doing so violates another state or federal law. If you are an employee who feels that they have been let go unfairly, hiring an experienced employment attorney to guide you through the process can give you peace of mind. Get in touch with the professional team at DeWitt Law to see how we can help you today!