The Myth of Employment At-Will
The doctrine of employment at-will has a long history in New Hampshire. In its decision in Cloutier v. The Great Atlantic & Pacific Tea Company, Inc., 121 N.H. 915 (1981), the New Hampshire Supreme Court succinctly summarized the doctrine as follows:
“…in the absence of an employment contract, both parties [are] free at any time to terminate the employment relationship, with or without cause.”
The doctrine affords significant discretion and flexibility to employers. However, for a variety of reasons discussed more fully below, many public sector employees, including many municipal employees, are not employees at-will under New Hampshire law. Instead, many municipal employees are protected by additional contractual, statutory and/or Constitutional provisions that municipal employers cannot ignore.
Individual Employment Contracts and Collective Bargaining Agreements
Application of the employment at-will doctrine is predicated on the fact that there is no employment contract between the employer and the employee. In New Hampshire, it is not uncommon for certain executive level public sector employees (i.e. City Managers, Town Administrators, Police Chiefs, Fire Chiefs, School Superintendents) to have individual employment contracts. These individual employment contracts typically outline specific terms and conditions that the employer must satisfy prior to terminating the employee, thus deviating from the doctrine of employment at-will.
Far more common than individual employment contracts, municipal employees are also often represented by labor unions. In fact, according to the United States Department of Labor, Bureau of Labor Statistics, in 2016, 43.9% of all local government employees nationwide were represented by a union.
As members of a bargaining unit recognized by the New Hampshire Public Employee Labor Relations Board, many municipal employees are covered by the collective bargaining agreements that their union representatives have negotiated with their municipal employers. Like individual employment contracts, collective bargaining agreements typically include contractual provisions intended to impose limitations on a municipal employer’s ability to terminate the employment relationship. Perhaps the most common substantive limitation, included in many collective bargaining agreements, is the contractual provision requiring that a municipal employer must have just cause in order to discipline an employee, up to and including termination. Labor arbitrators engaging in just cause analysis routinely focus on the following Seven Tests first articulated by Arbitrator Carroll Dougherty in 1964, in her decision in Grief Bros. Cooperage Corp., 42 LA 555, 557-59:
Did the employer give the employee forewarning of the possible disciplinary consequences of the employee’s conduct?
Was the employer’s rule or managerial order reasonably related to the employer’s orderly, efficient, and safe operation?
Did the employer, before administering discipline to an employee, make an effort to discover whether the employee violated a rule or order of management?
Was the employer’s investigation conducted fairly and objectively?
At the investigation did the employer obtain substantial evidence of proof that the employee was guilty as charged?
Has the employer applied its rules, orders, and penalties evenhandedly?
Was the degree of discipline administered by the employer reasonable?
Clearly, these Seven Tests for determining just cause impose a much higher standard on a municipal employer to justify a termination than does the doctrine of employment at-will.
Collective bargaining agreements also frequently impose procedural limitations on a municipal employer’s ability to discipline an employee, up to and including termination. For example, New Hampshire law requires all public sector collective bargaining agreements to include a “workable grievance procedure.” See NH RSA 273-A:4. These workable grievance procedures typically involve a very specific, detailed process that a municipality must follow prior to termination, usually culminating in binding arbitration. This is a far cry from the doctrine of employment at-will, which does not even require that an employer provide prior notice of termination to an employee.
State Statutory Protections
Many public sector employees, including many municipal employees, are also protected by specific New Hampshire statutes. Like collective bargaining agreements, these New Hampshire statutes impose both substantive and procedural limitations on an employer’s ability to terminate the employment relationship.
NH RSA 105:2-a provides that an appointed New Hampshire Police Chief can only be terminated “…for cause, and after he or she has been presented with a written specification of the reasons.”
NH RSA 41:48 provides that a permanent New Hampshire Police Officer “…shall continue to hold such office during good behavior, unless sooner removed for cause by the selectmen, after notice and hearing.”
NH RSA 154:5(II) provides that a New Hampshire Fire Chief can only be terminated “…for cause, and after he or she has been presented with a written specification of the reasons.”
NH RSA 189:14-a provides that certain New Hampshire teachers (those who have taught for 5 consecutive years or more in the teacher’s current school district, or who have taught for 3 consecutive years or more in the teacher’s current school district before July 1, 2011) are entitled to written notice including a written specification of the reason(s) for such action, and the opportunity for a hearing.
NH RSA 202-A:17 provides that “[n]o employee of a public library shall be discharged or removed from office except by the library trustees for malfeasance, misfeasance, or inefficiency in office, or incapacity or unfitness to perform the employee’s duties.”
Finally, in the public sector, where “the State” is also the employer, the United States Supreme Court has extended additional Constitutional protections to municipal employees. For example, in Garrity v. New Jersey, 385 U.S. 493 (1967), the United States Supreme Court applied the 5th Amendment’s right against compelled self-incrimination to public sector employees involved in workplace investigations. More recently, in Cleveland Board of Education v. Loudermill, 470 U.S. 532 (1985), the Court held that certain public sector employees may be able to assert a Constitutionally protected property interest in their continued employment, entitling them (at a minimum) to “some kind of hearing” before being terminated. Although perhaps not an onerous burden for a municipal employer to satisfy, it is still more than the employment at-will doctrine requires.
The doctrine of employment at-will provides great comfort to many New Hampshire employers. Distilled to its core, the doctrine allows employers to make disciplinary decisions, up to and including termination, at any time, for any lawful reason. Public sector employers in general, and municipal employers in particular, need to beware, however, that employment at-will in the public sector is often a myth. Rather than having the flexibility and discretion to terminate an employee at any time, for any lawful reason, municipal employers are often constrained by individual employment agreements, collective bargaining agreements, New Hampshire statutes, and/or additional Constitutional protections.
Thomas M. Closson is an attorney with the law firm, Jackson Lewis P.C., based in Portsmouth, New Hampshire. Attorney Closson can be reached by phone at 603.559.2729 or by email at Thomas.Closson@jacksonlewis.com.