Commercial Coverage

Is It Employment-At-Will 

Yes, Wisconsin is an “employment-at-will” state. Yes, that means an employer can discharge an employee for any reason. The termination does not have to be for a “cause.” That is, as long as the employer is clear in maintaining the “at-will” relationship. Employment “at-will” should be spelled out in your employee handbook, employment agreement, and any other communication to the employee that deals with their employment status. Any message that implies otherwise can void the employment-at-will status.

•  Using terms such as “permanent job”

•  Stating or implying employment is “guaranteed” after the probationary period

•  Telling an employee they will only be fired for poor performance

•  Providing an employment agreement guaranteeing employment for a specific term

•  Implying the employee has job security

All of the above can void the employment-at-will status. If an employer maintains the employment-at-will relationship, the employer/employee relationship can be terminated for just about any reason with some exceptions.

When is Firing Wrong?

•  When it's Discrimination. Protected categories include: age, race, color, national, origin, ancestry, religion, arrest record, conviction record, disability, gender, sexual orientation, marital status, pregnancy, military, political beliefs. Discharging an employee for any of these reasons is illegal.

•  When it's contrary to public policy.

•  Refusing to perform an unlawful act requested by the employer

•  Exercising a statutory right (filing a workers' compensation claim, attendance at jury duty, etc.)

•  Whistle blowing

•  When the Employer Agreed (Implied or Expressed) to Terminate only for “Just Cause.”

•  When it violates a Covenant of Good Faith. Terminating employment to avoid paying:

•  Commissions, bonuses, or a raise

•  Benefits

“Nice Guy” Ramifications

When an employee is terminated for cause, they are not eligible for unemployment. Being a “nice guy” and allowing the employee to collect unemployment when they have been fired for cause, produces three results:

•  The employer is at risk for a wrongful termination suit. How? The employee was told one thing at termination (they were fired for cause), and the unemployment office is told something different (they were laid off). The employee takes the documentation form the unemployment office to a lawyer. Where's the defense?

•  The ex-employer's unemployment insurance rates increase. A hike to 6 percent may not seem like a lot, but multiply that by total payroll and think again.

•  It encourages laziness. Sometimes people turn down temporary work when they are between jobs, because they prefer to collect unemployment.

Before terminating an employee, check with your attorney or human resources department for advice and the procedures to follow.

Independent Insurance Agent 2002, No. IV