The employment-at-will rule

In 1997, Professor Pauline Kim of the Washington University School of Law published “Bargaining with Imperfect Information:

A Study of Worker Perceptions of Legal Protection in an At-Will World” in the Cornell Law Review. In it, she reported the results of a survey of Missouri employees and their perceptions of protections the law provides them from losing their jobs under various circumstances. The survey revealed that the vast majority of employees were unaware of the at will rule and erroneously believed the law protected their employment from being terminated for a variety of reasons that are clearly legally permissible under the employment-at-will default rule. For example, nearly 89 percent of respondents believed that it is unlawful for an employer to fire an employee because of the employer’s personal dislike of the employee. Similarly, 87 percent of respondents believed an employer would be breaking the law if it fired an employee for erroneously concluding that the employee had stolen from the employer, even when the employee had provided proof that she had not.

Defenders of the employment-at-will rule justify it in a number of different ways. One of those is that employees who value greater job security can negotiate with employers for protection from unjustified termination of their employment (usually at the cost of a lower salary or other benefit concessions). Similarly, at least in theory, employers pay a wage premium for the

labor flexibility that the at-will rule provides. However if Professor Kim’s survey is broad representative of workers

knowledge about the at-will rule, then such employees are unlikely to value job security accurately and or to demand an appropriate wage premium. Employers presumably have no such misunderstanding. As a result. they benefit from theil

employees misapprehension of the at-will rule and some may encourage such misunderstanding in order to cultivate feelings of loyalty and security among their employees

What, if any, ethical obligation do employers, who are at an information advantage, owe to prospective employees toensure that they understand employment at will prior to negotiating the details of their employment?

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