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Saturday, October 19

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It is time for Illinois legislators to end at-will employment in our state. Our legislators may not have a reputation for taking on fundamental change, but it would only take a handful of brave legislators to take the message to the people and win what is essentially a civil rights matter. It is time for "just cause" employment in Illinois.

"Just cause" employment is an alternative to "at-will" employment that currently exists in Montana, as well as the rest of the industrialized world, in varying degrees of intensity. Essentially, it states that an employer must give (and potentially demonstrate) just cause for terminating an employee. The details of what constitutes a "just cause" can vary in detail, but essentially the rule is that it has to deal with work performance or serious criminal conduct, serious restructuring (in other words, massive layoffs) or employer bankruptcy. Pretty reasonable.

A moment, if you will allow, for a plea for the rights of white males. Well, not white males in particular. But current employment law (though not strictly speaking employment reality) does give white males less protection against wrongful termination than any other demographic group. Obviously this is done to address historical inequalities — between blacks and whites, men and women, hetero and homosexuals, etc. But if there can be a solution to employment discrimination that covers all employees, why not implement it? Why sustain a byzantine patchwork system that protects some people from racial discrimination, others for religious discrimination, others for gender discrimination, others for disability discrimination, others for having sick family members, etc.?

From the Chamber of Commerce's or National Association of Manufacturers' point of view — your bosses' point of view — the reason is obvious: a simple, streamlined system of preventing unlawful termination — the economic death sentence — will cut into their profits and make their lives more difficult. It also would have the unfortunate (from their point of view) side effect of bridging one of the rifts between working class Americans exploited so joyfully for 40 years by movement conservatives.

But from a rational point of view, it makes no sense to stick with the status quo (or go backward). Americans are uniquely burdened in the industrialized world by the doctrine of so-called "at-will employment," the common law rule that states that you can be fired from your job for a good reason, a bad reason, or no reason whatsoever, so long as it is not an illegal reason. The "doctrine" of at-will employment isn't written into the law (in most states) and is not the result of a Supreme Court decision. To the contrary, it is the "default rule," resulting from a series of Nineteenth Century court cases.

At-will employment does not exist anywhere else in the industrialized world, including the members of the G-8, the wealthiest nations on the planet. And it shouldn't exist here. This is a civil rights issue — the civil rights of the largest group of Americans by far — wage workers.

If your livelihood depends on a check signed by someone else, you are probably an at-will employee, and this means your livelihood is wholly dependent on someone else's whim. If you insult their haircut, or support the wrong candidate in an election or have too many wild photos up on your Facebook page, you can be fired, lose your livelihood, lose your health insurance, lose everything, and you have no redress whatsoever. Particularly if you are a white male.

If you are brown like me, or a woman, you can perhaps try to argue that your ethnicity or gender played a role in your firing — but even then you have an enormous burden to prove, that your boss acted knowingly with your gender or race in mind when firing you. It gets to proving motives in a legal setting, a tortious experience that homophonically tend to be torturous. Employers have gone to great lengths (and, ironically, expense) to create "human resources" departments with the purpose of insulating the firm from claims of discrimination in employment. Protecting the at-will employment system is critical to the largest employers in our economy, because of the dependence it creates in employees.

How much more are you willing to put up with at work if your boss can fire you not just for any reason, but for no reason?

Maybe liberals don't like to hear it, but too bad. It is simply not just to have an employment regime that excludes essentially only one demographic, because we do not choose the demographic we're born into. If employment security is a problem, then it is a problem for everyone. White males are just as at risk of the economic death sentence as anybody else. At-will employment is the problem, and just-cause employment is its solution.

At-will employment's defenders are numerous and use several arguments, all fallacious, to buttress their points. Among them:

1) At-will employment serves both employer and employee!

This is ridiculous. There is not equal bargaining power between an employer and employee. This is common sense, but we could be technical about it. Choosing to participate in the wage economy is not much of a choice for the vast majority of people. If you want to live, you have to go get a job. You could also start your own business — but even then you will likely rely on people willing to work for wages. Employees. The result of choosing not to be an employee is not surviving. The cliché "the world needs ditch diggers too" is a nice way to sum this up. In other words, the employer has a lot less at risk in the bargaining relationship with an employee. Duh.

Also, the employee can't just go out and seek a "just cause" employer. There is no choice in the labor market in that regard. Employers have no incentive to compete with each other by offering just cause employment, because they benefit so enormously from the "unspoken" rule of at-will employment.

As for the employee's freedom to leave without notice, given the need for references, "giving notice" is a de facto necessity in the modern economy, so having a notice requirement, even a longer notice requirement, is hardly an oppressive burden, particularly for non-professionals.

2) At-will employment is protection against high unemployment!

Nope. At least, there is no evidence for this. The United Kingdom does not have anything resembling at-will employment, and its unemployment rate is regularly lower than that of the United States. A little closer to home, the state of Montana does not have at-will employment, and regularly has one of the lowest unemployment rates in the country. If at-will employment were abolished in all 50 states, there would be even less reason to expect unemployment to result. Barry D. Roseman, of the progressive American Constitution Society, analyzed unemployment rates in Montana preceding the series of court decisions that led to the "just-cause" employment regime and the period after the court decisions were codified into law, and found that the fear-mongering of the economists was completely unfounded.

So even with the lack of evidence for this argument, there is also that useful tool, common sense. It is unreasonable to assume that large employers would forsake the profits that come with an added employee because they could only fire them for a good reason. Particularly given the American worker's ever-increasing productivity, the only motive for employers to forgo hiring new employees would be spite. If we have an economy where "spite" can be a serious contributing factor to a firm's decision, we have bigger problems than employment policies.

3) We've got "implied contract" exceptions anyway!

This is an arcane legal argument, and to avoid any accusations of obscurantism, I'll use an example to sum this one up: You get a job. You go to work over-dressed on the first day and sit in the human resource guy's office and realize you're over-dressed. You sit through an uncomfortable presentation of the employee handbook, which you then have to sign. The employee handbook mentions that you will be terminated only for causes A, B, C, D, and also "just cause." Whatever, you're thinking about how much you can't wait to loosen your tie/take off your heels. In many states, courts have found that this situation entails an "implied contract." More recent court decisions (and the expense and difficulty of pursuing this avenue in court) mean, well, not really.

To ward off this "implied contract," an employer need only put a single sentence in the employee handbook: "Employment at this firm is at-will employment." The end. Not to mention that the burden, because this is a tortious action, is on the fired employee.

Currently, Colorado is considering a "just cause" amendment to the state constitution, ending the terrible reign of at-will employment. The business associations — pretty much every business association — are fighting the measure tooth-and-nail, which is curious, considering it is an implicit admission that they enjoy firing people for no reason. The ballot initiative has the progressive and labor communities in Colorado fired up, and some think it could help Senator Obama win the state in November. The Workplace Prof Blog (yes, there is a blog specifically for professors of workplace law, bless our robust economy) wonders why labor would bother fighting for an initiative that would theoretically make unionization seem less tantalizing, since currently union workers are one of the very few groups of workers completely insulated from the ravages and vagaries of at-will employment. The answer of course, besides the solidarity it provides, is that employers routinely use at-will employment as cover to fire workers for participation in union organizing drives, in flagrant violation of the National Labor Relations Act (NLRA).

But I don't care about any of that. We should do it because it's right, and it's fair. Illinoisans — Americans — deserve the peace of mind of knowing that they can't lose their job for no reason, that they can't be handed the economic death sentence because they didn't iron their shirt, or because they never show off their breasts, or because they are gay (a group not covered by most anti-discrimination statutes).

As long as the world needs ditch diggers, we have a duty to make sure they have as much peace of mind as the ditch designers and ditch financers — and the other, protected groups of ditch diggers, too.

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Comments

Brian / September 10, 2008 9:28 AM

So, I want to fire someone who slacks off, I need to file an application with the People's Commissar for Labor?

Real simple: if I can't fire, I won't hire.

This is how business flees a state. Labor leaders try to make the government mandate what they can't get in negotiations. Businesses leave for a better regulatory climate.

Note: I get a postcard from Indiana once a quarter advertising their lower taxes, lower workers comp rates, and lower government interference in business. If nonsense like this passed, I would get one a week! I suspect a lot of businesses would take them up on their offers.

Jason / September 10, 2008 10:01 AM

The policy you are advocating can be seen in France. Their employment laws are such that employers have to go thru a strenuous process to fire incompetent or employees who have proven to be sub-standard. As a result, they are extremely hesitant to hire new employees. This is especially so with recent graduates who don't have a record that demonstrates reliability, success, or any other reasonable factor used in the hiring process. As a result, youth unemployment ranges inbetween 20% and 25%.

http://www.eubusiness.com/Employment/060403154452.c0egg72s/
The effect of such a high unemployment rate is that the new generation of worker is disaffected and has no incentive to become a productive member of society. This leads to both radicalization (see France's riots) and greater dependence on collectivism and government interference in the economy.

Both of which you are a tried and true advocate.

Brian / September 10, 2008 10:44 AM

Jason: Exactly right.

The "Sophomore Socialist brigade" gets so excited about punishing big bad business that its efforts backfire.

Instead of providing incentives to business to do what we want it to do--in this case, hire lots of people, expand operations, etc.--it provides disincentives.

I hire people about once a year, and about 1/4 of my hires have been mistakes. I'm not such an awesome judge of character that I don't screw up. In the last three years, I fired three people, one for incompetence and two for dishonesty. If I knew that firing those thieves/idiots would have required a lawyer, I never would hire anyone: I would outsource everything to Bangalore, where I can fire at will.

Just like rent control creates less, not more affordable housing, making firing people hard causes less employment.

(apologies for double post-technical problems)

Ramsin / September 10, 2008 11:47 AM

Did you guys even read the article?

France is an example; the UK is a counter-example.

France is an example; Montana is a counter-example.

Montana has had a just-cause employment regime for decades and their unemployment rate has tracked the national average and compared favorably with their neighboring states.

So, your arguments, which I explicitly anticipated in the article, are defeated. What now? (Other than throwing out words like "socialist" and "commissar" to make it seem like you have an argument)

Brian / September 10, 2008 12:49 PM

I read as much as I can stand of such stellar evidence like:

"is unreasonable to assume that large employers would forsake the profits that come with an added employee because they could only fire them for a good reason. Particularly given the American worker's ever-increasing productivity, the only motive for employers to forgo hiring new employees would be spite."

Ramsin, here's a suggestion: go get a job. I mean a real one, not one as an "organizer" for the union that represents the DMV, but one that involves actual productive work.

Better yet, manage some employees, be responsible for payroll, hire some people, manage them, fire the idiots and slackers, get a real handle for the day to day process of running a business.

Then, once you have done all that, you will have some worthwhile experience and expertise on the subject and some of us will be inclined to take your views on this subject seriously.

Until then, your column is just wanking.

Jason / September 10, 2008 1:36 PM

I did read the article and I don't think that you defeated anything.

The problem with your argument here is that you only look for conforming evidence, rather than confirming evidence.

Do you bother to look for evidence that may refute your position?

Danny / September 10, 2008 3:26 PM

This is an unconvincingly written article. This is even a labor cause I would support at a federal level, but at a state level or without adjoining protection against merely outsourcing internationally the proposal you describe would just drive business to another state. A case for this kind of plan may work in Montana or Colarado where there are geographical draws to the industries there but Illinois? Not really.

Ramsin / September 10, 2008 8:54 PM

You guys are fun.

All you've done is shown that no evidence would be enough to convince you. You come on here and call me names and use anecdotal evidence ("I wouldn't hire anyone!")

You create straw man scenarios ("people's commissar") and when its pointed out that every western economy has some form of "just cause" employment, you revert to calling me a socialist, or pointing out France.

A counter example is provided: Montana, a state here in the US. Well, that isn't good enough either, because Montana isn't Illinois.

So, with your arguments clearly refuted (because there are extant counter-examples) what else? You revert to ad hominems yet again.

So, Brian, I have hired and fired employees, including slackers. And guess what? I am gainfully employed in the private sector.

Uh-oh! Yet AGAIN your argument (which was against me, not the argument I presented) loses. You're on a losing string of always. Please don't give up; I enjoy it, frankly.

Jason, I always look for refuting evidence. In fact, in this piece, I PRESENT the potentially refuting evidence, and found it lacking.

To buttress the argument, I presented a scholarly study (find it here: http://www.acslaw.org/node/6924)and even prefaced it by saying it was done by a "progressive" institution.

I have read Richard Epstein's "definitive" article on the subject (Epstein, R. A. "In Defense of Contract at Will." University of Chicago Law Review 51 (1984): 947-82), not to mention the current arguments about the Colorado initiative, and they are refuted by the evidence:

(1) No other industrialized economy has "at-will" employment.
(2) "Just-cause employment", which exists in a US state, does not effect unemployment rates between Montana and neighboring states or Montana and the nation as a whole.

There's the evidence. What did you come back with besides calling me a "socialist" and telling me to get a job? Nothing.

Yet again.

So, I do have a job in the private sector. I have managed employees, hired them, and fired them. The UK is not a socialist nation, neither is Canada or the Netherlands. You don't have to call a "people's commissar" to fire people in any of those places.

So there goes every single thing you guys brought up. Yet again.

What now? Gonna call me a stupid head?

mike-ts / September 10, 2008 9:45 PM

I have no interest in calling people silly names, or using outdated words like commissar.

But being a Hoosier just over the border, I'd applaud an Illinois initiative like this. It won't pull over a lot of businesses, but even a handful will help!

The trouble with the program is that like OSHA or the ADA, it's a good idea that sounds like "who could oppose this," and who could oppose something nice like workplace safety or enabling the disabled? I saw an employer try to get all nth degree OSHA compliant after a worker fell off of a loading dock while screwing around (all the worker's stupid fault), and saw what a nightmare mess he opened for himself.

I don't see why installing some due process to the firing process should encumber businesses too much, until they come out with the 500 page booklet and the two day seminar on how to be compliant with this simple thing.

I say just end the whole employee thing, make us all independent contractors, and have the company have to sign a contract with each worker, which includes this, as well as a host of other things like breaks.

C-Note / September 13, 2008 11:40 AM

Ramsin - even if you were right, which you're not, the legislation you advocate will never be signed into law. I'd rather bet on it than argue about it.

Hypothetical legislation can be placed on a probability spectrum with "highly unlikely" on one end and "highly likely" on the other. Your proposed labor law is much closer to one end of the spectrum than another; I know it would insult your intelligence to tell you which end. I'd rather debate hypothetical legislation that's closer to the other end.

Maybe this is because, although I have the capacity to think in the abstract, I have a limited imagination, and I lose the thread when I get into arguments about such things as whether unicorns exist. But I'm a practical man, and I understand cash. And as a practical man, if it's not gonna happen, I've got plenty of stuff to deal with that actually exists in the physical realm.

I'll take straight bets on whether such legislation is passed in the Illinois House by 2012. If you want to put your money where your mouth is, I'll tell you where to send it.

William / September 15, 2008 9:01 PM

i would tend to agree with the article for the most part, especially in light of the whole "poor me" refuge that employers run to when the evil head of worker empowerment rears itself. The attitude of both working americans and the schlubs who hire them needs to change on a fundamental level; that being that workers need to realize that despite the common myth of them being inherently unvaluable, american employers wouldnt have a pot to gather their hard won tax breaks in and likewise the employers need to realize that having a just cause to fire a worker gives them something to sharpen their wits upon rather than the latest musings of a Milton Friedman fundie.

Ramsin / September 16, 2008 4:46 PM

Actually, C-Note, I AM right. And the fact that you didn't bother to address my argument only makes it more clear you have no argument to offer.

I'm not concerned with the likelihood of it happening--did I state what I thought the likelihood of it happening was?

Is that the world you live in? One where you should only advocate for something if it has a good chance of happening anway? How pathetic.

 

About the Author(s)

Ramsin Canon studies and works in politics in Chicago. If you have a tip, a borderline illegal leak, or a story that needs to be told, contact him at rc@gapersblock.com.

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