The doctrine of at-will employment, simply stated, is that an employee may be terminated at any time or for any reason. 

This rule applies in both Kansas and Missouri, and perhaps becomes even more important during times of economic hardship and higher unemployment. Smaller businesses often rely upon the doctrine as a way to control costs during periods of economic uncertainty. However, this may work a particular hardship on employees who quite often do not have the reserves to weather unexpected unemployment.

There are any number of people who, by definition, are not employees at-will because they are engaged pursuant to employment contracts, union agreements and the like. Most emerging and small businesses, however, will invariably engage the services of at-will employees.

Here are some of the most important exceptions to at-will employment.

Implied Contract – Kansas

In the state of Kansas, if a person is employed under an “implied contract” of employment, termination may be permitted only for “good cause.” An implied contract can be established by a variety of factors, including oral discussions, past conduct of the employer, ongoing practices of the parties, policy manuals and other independent evidence.

However, even if an implied contract is found to exist, it may be terminated for “good cause,” which the Kansas Supreme Court has determined may be based on any good faith reason that is not arbitrary, irrational, unreasonable or irrelevant.

Implied Contract – Missouri

The concept of implied contracts of employment has been accepted by the Missouri courts with perhaps stricter guidelines than in Kansas. For example, mere statements in an employment manual that a person will be terminated only for good cause are generally not enforceable in Missouri as an implied contract on the theory that this does not create a contractual relationship between the parties.

Public Policy Exception

Both Kansas and Missouri courts have recognized a narrow exception to the at-will doctrine known as the “public policy exception.” Employees may not be terminated for

» Refusing to engage in illegal conduct (whether or not it constitutes a criminal act)

» Reporting unlawful or illegal conduct

» Engaging in activities that are clearly encouraged by public policy, such as performing jury duty or engaging in certain union activities

» Exercising their statutory rights, such as pursuing worker’s compensation claims

Essentially, the public policy exception is intended to protect employees when engaging in activities that are “beneficial to society” and prevent employers from taking actions that are “injurious to the public or the public good.”

Nonetheless, in order to assert a wrongful termination claim, an employee generally must establish a causal relationship between termination and the protected or encouraged activity. The public policy doctrine and the actions covered under this doctrine have been recognized in a number of jurisdictions, and it continues to evolve in both Kansas and Missouri.

Statutory Prohibitions

In addition to implied contracts, of course, there are several statutory and regulatory restrictions that preclude the termination of employees for a variety of reasons. For example, an employer may not violate Title VII of the Civil Rights Act of 1964, which prohibits termination on the basis of race, color, religion, gender, national origin or age and forbids retaliatory practices by employers. Both Missouri and Kansas have statutorily created civil causes of action for wrongful termination of employees who are discharged for filing workers’ compensation claims or taking jury service leave.

Independent Contractors

The doctrine of at-will employment simply does not apply to independent contractors because they are not deemed to be “employees” in the first instance. Instead, the engagement of an independent contractor is governed by the conditions of the actual arm’s-length agreements and practices between the parties. The Internal Revenue Service has provided guidance as to various factors required to establish an independent contractor status for tax purposes, which are helpful in determining whether an employer-employee relationship exists in connection with the application of the doctrine of at-will employment.

Employers should be vigilant to ensure that their practices do not establish the foundation for the creation of implied contracts, but must be respectful of prohibitions governing wrongful termination. On the other hand, employees should exercise care to make sure they understand the conditions of employment and are not surprised by unanticipated termination.