How good is your HR vocabulary?

It’s time for a quiz.  Do you know the meaning of the following words and phases as used in the HR arena?  1) Employment at will, 2) Wrongful Discharge, 3) Layoff, 4) Just Cause, 5) Probationary Period and 6) Constructive Discharge.

These words and phrase have acquired there own special meaning (also known as terms of art) in the employment arena.  It is important to understand and use these words and phrases correctly.

Employment at Will.  Wisconsin interprets the “employment at will” doctrine to mean that an employer is allowed to discharge an employee for good cause, for no cause, or even for cause morally wrong, without being thereby guilty of legal wrong.

As the Wisconsin Supreme Court stated in Bammert v. Don’s Supervalu, Inc., 2002 WI 85, 254 Wis.2d 347, 646 N.W.2d 365, “The employment-at-will doctrine is a ‘stable fixture’ of our common law, and has been since 1871. It is central to the free market economy and ‘serves the interests of employees as well as employers’ by maximizing the freedom of both. The ‘antidote’ to the potential for unfairness in employment-at-will ‘is an employment contract.’”

There are three common ways to contract with an employee.  One is to contract directly with the employee – – i.e. the individual employment contract. A second way is to have a handbook or other employer policy that provides some form of job security that modifies or abrogates the employment at will doctrine. And finally a collective bargaining agreement usually provides a form of job security.

Generally, at-will employees cannot pursue legal claims stemming from routine dissatisfactions with the terms and conditions of employment or an employer’s unjustified decision to terminate the employment relationship.  The courts generally will not second guess employment or business decisions, even when those decisions appear ill-advised or unfortunate.

However, there are various statutory exceptions to the employment-at-will doctrine. For instance, Title VII of the Civil Rights Act of 1964 and the Wisconsin Fair Employment Act each prohibit employers from discharging an employee on the basis of race, color, religion, sex, or national origin. Other statutes make it unlawful for employers to terminate workers because of participation in union activities, jury service, military service, or testifying at an occupational, safety, and health proceeding.

Wrongful Discharge.  It seems that every employee who is fired wants to claim a wrongful discharge.  However, it is not the easy for an employee to sustain such a claim. To win a wrongful discharge claim, the employee must satisfy a two-part test: (1) the employee must identify a fundamental and well-defined public policy sufficient to meet the narrow cause of action for wrongful discharge under the public policy exception to the employment-at-will doctrine; and (2) the employee must demonstrate that the discharge violates that fundamental and well-defined public policy.

It is not the purpose of this article to go through the law that has developed with regard to the public policy exceptions to the employment at will doctrine.  Suffice it to say that the run of the mill termination is not a wrongful discharge.

Layoff.  In 1979 the Wisconsin Supreme Court stated that a layoff from employment has a different concept in employment relations and implies a temporary separation from employment rather than a permanent termination of employment.”  The exact definition of a layoff is normally defined by the terms of a collective bargaining agreement or employer policy.  The main feature of a layoff is the right to be recalled to a job.  Some employers, who operate under the at will concept, will layoff an employee instead of firing the employee believing this is a more compassionate approach. This approach gives the employee the ability to argue that the employer has abandoned the employee at will concept.

Just Cause.  In a Wisconsin court case, a private sector non-unionized employer entered into an employment contract with an employee, and the contract contained a provision that the contract could only be terminated for just cause. After the company fired the employee, the employee sued claiming there was no just cause for the firing.  The employment contract did not define what was meant by the term “just cause.”  The corporation contended that “just cause” meant “inexcusable neglect.”  The employee presented evidence that “just cause” meant “intentional wrongdoing.”  As the Supreme Court said in letting the jury determine the phrase’s meaning, “the definitions are different from each other, thereby giving lie to the notion that ‘just cause’ has a single ‘plain and ordinary’ meaning.”

The lesson for an employer is twofold.  First, do not assume the employer and employee have the same understanding of the meaning of the phrase “just cause.”  Second, the employer should attempt to define “just cause” if it is going to use the phrase in an individual employment contract or board policy.  (There is no real difference between the words just cause, reasonable cause or cause.)

In unionized settings the phrase “just cause” will be interpreted by arbitrators using the common law that has developed for the particular industry.

Probationary Period.  A probationary period is an amount of time that allows the employer to discharge the employee without having to meet the ultimate discharge standard (which typically is a cause standard).  Inherent in the “at will” concept is that there is no cause standard.  Therefore, it can be argued employees are always on “probation.”  For those employers who add a probationary period where it is not necessary, it can be implied that there must be a higher standard at the end of the probationary period. 

Constructive Discharge.  The doctrine of constructive discharge recognizes that some resignations are coerced – – tantamount to a termination.  In an attempt to avoid liability, an employer may refrain from actually firing an employee, preferring instead to engage in conduct causing him or her to quit. The doctrine of constructive discharge addresses such employer-attempted “end runs” around wrongful discharge and other claims requiring employer-initiated terminations of employment.  Constructive discharge exposes “what is ostensibly a resignation [as] a discharge.”  The doctrine operates “to discard form for substance, to reject sham for reality” and recognizes that certain resignations are, in fact, actual firings.

As the Wisconsin Supreme Court said in Strozinsky v. School District of Brown Deer, 2000 WI 97, 237 Wis.2d 19, 614 N.W.2d 443, “We therefore must discern what conditions rise to this level of intolerability. A constructive discharge analysis implicates an objective inquiry, recognizing that employees cannot be overly sensitive to a working environment. The question hinges on whether a reasonable person in the position of the plaintiff would feel forced to quit. Stressful ‘disappointments, and possibly some injustices’ are not actionable.  Similarly, employees will not prevail in claims charging only that managers were heavy-handed, critical, or unpleasant.  Inferior work assignments, transfers to less favorable job duties, and substandard performance reviews alone generally do not create intolerable conditions.  Rather, the situation must be unusually aggravating and surpass ‘[s]ingle, trivial, or isolated’ incidents of misconduct.”

I hope you passed this test so that we you are tested in a court or administrative agency, you will also pass that test.

This article is intended for general information purposes and highlights developments in the legal area.  This article does not constitute legal advice.  The reader should consult legal counsel to determine how this information applies to any specific situation.