MANAGING EMPLOYER‐EMPLOYEE CONFLICT: A CASE FOR ARBITRATION AND THE MODEL EMPLOYMENT TERMINATION ACT

Abstract

The doctrine of employment‐at‐will has been the rule of law for over 100 years in the United States. Under it an employee can be terminated for a good reason, a bad reason, or for no reason at all. Because of real abuses when firing employees, generally called wrongful termination, all but five U.S. states have now carved out at least one of three exceptions to the rule. They are implied contract, public policy tort, and the implied covenant of good faith and fair dealing. Although created with good intentions, all three exceptions have spawned a legal environment of judicial inconsistency and unpredictability and a climate of expensive litigation and monetary judgments. The Model Employment Termination Act, if adopted by all the states, would establish a uniform legal system for managing employee terminations. The Act's major provisions require that an employee can be terminated only for “good cause,” and, in the “preferred version” that arbitration be used in settling disputes. However, an employee's remedies are limited and can include reinstatement, back pay, lump‐sum severance payments, and reasonable attorneys' fees and costs, but no compensatory or punitive damages.

Citation

Seidman, L. and Aalberts, R.J. (1993), "MANAGING EMPLOYER‐EMPLOYEE CONFLICT: A CASE FOR ARBITRATION AND THE MODEL EMPLOYMENT TERMINATION ACT", International Journal of Conflict Management, Vol. 4 No. 3, pp. 263-276. https://doi.org/10.1108/eb022729