This article analyzes the concept of just cause that appears in the arbitration literature and in common law, and it goes on to examine the extent and nature of just cause in state legislative proposals for employment-termination law. The research summarizes the results of a survey of the fifty states between 1980 and 1993 to establish the extent to which bills on employment termination for employees of privately owned, nonunionized firms incorporate the just-cause standard. This article provides evidence on the extent to which state bills adopt the form of just cause stipulated in the Uniform Law Commissioners' Model Employment Termination Act, analyzes the content of just-cause proposals, and evaluates the content of current proposals against established just-cause standards.
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References
1.
1. Employment at will is the concept that an employer can dismiss an employee for good reason, no reason, or even bad reason. In Britain, the at-will concept was abandoned thirty years ago, as it has been in most other leading industrialized nations, in favor of statutory employment protection, originally the Industrial Relations Act of 1971, subsequently the Employment Protection (Consolidation) Act of 1978. This protection limits dismissal of an employee to occasions where there is “substantial reason” to justify it; otherwise, it is likely to be held unfair by the three-person Industrial Tribunals that have been established to arbitrate such cases. For an assessment of the British unfair-discharge law, see Linda Dickens, “Comparative Systems of Unjust Dismissal: The British Case,” this issue of The Annals of the American Academy of Political and Social Science.
2.
Lauren B. Edelman , “Legal Environment and Organizational Governance: The Expansion of Due Process in the American Workplace,”American Journal of Sociology, 95:1401-1440 (May 1990).
3.
3. There is no substantive difference between “just cause” and “good cause” in employment law usage, although a distinction is sometimes made between these concepts and cause alone, which some employers have unsuccessfully tried to interpret as “any reason” and, through this interpretation, have tried to undermine the idea of employee rights.
4.
4. Adolph M. Koven, Susan L. Smith, and Donald F. Farwell, Just Cause: The Seven Tests, 2d ed. (Washington, DC: Bureau of National Affairs, 1992).
5.
5. Ibid., p. 12.
6.
Dragan Milovanovic , The Sociology of Law (New York: Harrow & Heston, 1988).
7.
7. Weber uses the terms “formal” and “substantive” rather than “intrinsic” and “extrinsic,” but because of the other connotations of these terms, this usage is confusing and has been omitted here for clarity.
8.
Minton, Lewicki, and Sheppard describe the combined internal and external criteria as “correctness.” See John W. Minton, Roy J. Lewicki, and Blair H. Sheppard, “Unjust Dismissal in the Context of Organizational Justice,” this issue of The Annals of the American Academy of Political and Social Science.
9.
9. Minton, Lewicki, and Sheppard describe the rationality criteria as “balance.” Minton, Lewicki, and Sheppard, “Unjust Dismissal.” It is important to note here, however, that discrimination, for example, is not necessarily irrational. An employer's discriminatory action might be rational insofar as there exists a consistent historical pattern of differential treatment of certain categories of employee. However, that practice, and the decision to differentiate between categories based on race, gender, religion, and the like, would be intrinsic, being particular to that company, and inconsistent with extrinsic criteria: present industrial practice and societal law.
10.
10. Minton, Lewicki, and Sheppard use a similar distinction, in which penalties or sanctions are subsumed under their “outcome level,” and procedures under the “procedures level.” Whereas I focus specifically on behaviors subject to discipline, they also analyze the broader systems level. Minton, Lewicki, and Sheppard, “Unjust Dismissal.”
11.
11. Koven, Smith , and Farwell, Just Cause, p. 7.
12.
12. For an elaboration and analysis of these, see Hoyt N. Wheeler, Brian S. Klaas, and Jacques Rojot, “Justice at Work: An International Comparison,” this issue of The Annals of the American Academy of Political and Social Science.
13.
See also idem, “Enterprise Wire Co. v. Enterprise Independent Union,”Labor Arbitrator, 46:359 (1966).
14.
14. Henry H. Perritt, Jr., Employee Dismissal Law and Practice, 3d ed. (New York: John Wiley, 1992), 2:194-195.
15.
15. This is not the case where the standards have simply been published but not agreed to by employees, as is typical in the case of nonunionized employers. Nor, in contrast, does it hold, according to the 1960s' Supreme Court Steelworkers Trilogy decision, where a negotiated contract violates “explicit, well-defined public policy.” As a result, courts have been given the liberty of overturning arbitrators' findings that discharge was not for cause in such cases, notably where alcohol and drugs are involved. See Kovin, Smith, and Farwell, Just Cause, pp. 8-9, 11.
16.
16. See Perritt, Employee Dismissal Law and Practice, pp. 196-197.
17.
17. Ibid., p. 198.
18.
18. While Daugherty stipulated that the investigation and hearing should come before disciplinary penalties are administered, others have argued that the realities of economic life preclude such “ivory tower thinking” from permeating the practicalities of production, albeit acknowledging that such a right to be heard and mount a defense is accepted as part of industrial due process. See James R. Redeker, Employee Discipline: Policies and Practices (Washington, DC: Bureau of National Affairs, 1989), pp. 31-32.
19.
idem , “Disciplinary Pluralism: Four Models of Private Justice in the Workplace,”Sociological Review, 35:279-319 (1987).
20.
20. S. D. Anderman, Voluntary Dismissals Procedure and the Industrial Relations Act (London: Political & Economic Planning, 1972), pp. 57-58.
21.
21. Perritt, Employee Dismissal Law and Practice, pp. 198-199.
22.
22. Ibid., p. 199.
23.
23. Koven, Smith, and Farwell, Just Cause, p. 26.
24.
24. For further elaboration of the philosophical and ideological roots of specific approaches to punishment, see Werner Einstadter and Stuart Henry, Criminological Theory: An Analysis of Its Underlying Assumptions (Fort Worth, TX: Harcourt Brace, 1994).
25.
25. Minton, Lewicki, and Sheppard, “Unjust Dismissal.”
26.
Stieber and Rodgers, St. Antoine, Fisher, Maltby, and Feitshans all make a case for such an act; see their articles in this issue of The Annals of the American Academy of Political and Social Science.
27.
27. Perritt, Employee Dismissal Law and Practice, pp. 202-203.
28.
28. Ibid., p. 203.
29.
29. Mont. Code Ann. § 39-2-901.
30.
idem, “1992 State-by-State Update Survey of Developments in Legislative Proposals on `Just Cause' Employment Termination Law for Private Non-Unionized Employees,” ibid., 2:263-67 (1993-94).
31.
31. I wish to thank Gary Brian Gulliver, Professor Theodore J. St. Antoine, and Stanley M. Fisher for their help in preparing the questionnaire.
32.
32. The response rate refers to responses by state, not by questionnaires sent out. It is based upon receiving at least one completed questionnaire from each state. Where more than one official answered the questionnaire, the results were rationalized. Further details and discussion of the survey methodology can be found in Henry, “State-by-State Comparison,” pp. 94-95.
33.
33. A survey of state representatives was conducted simultaneously but received a very low response rate and has been eliminated from the analysis here, which refers only to the responses by the legislative research agencies of each state. As with the first survey, the response rate refers to responses by state, not by questionnaires sent out. Further details and discussion of this survey methodology can be found in Henry, “1992 State-by-State Update,” p. 264.
34.
34. It is important to qualify the extent of bill growth since the data obtained, while highly accurate for most states, for others states depend on the quality and willingness of the legislative research agency respondents. In the few cases where they used less reliable search methods, there is a greater tendency for more recent bills to be identified. This is not considered a major factor, however, and would likely only slightly overstate the upward trend indicated by the findings.
35.
35. Perritt, Employee Dismissal Law and Practice, p. 209.
36.
36. Personal Communication, 1993. In this analysis, I have adopted these criteria in determining whether a bill is of the META type. However, some of the bills that have drawn on META language have omitted the preemption element but have retained just cause and mandatory arbitration. Where this is the case, I have so indicated in the table.
37.
37. Perritt, Employee Dismissal Law and Practice, pp. 215-218.
38.
38. Ibid., p. 215.
39.
39. Ibid., pp. 252-53.
40.
40. Ibid., p. 208.
41.
41. Marshall B. Clinard and Peter Yeager, Corporate Crime (New York: Free Press, 1980). According to Clinard and Yeager's study, corporations with over $1 billion in sales, which make up 42 percent of all corporations studied, committed nearly three-quarters of all violations, while small firms with less than half a billion dollars in annual sales, which made up 33 percent of all firms studied, committed less than 10 percent of the violations. Ibid., p. 119.
42.
42. This issue is an either-or one on penalties since the arbitrator is deciding on dismissal rather than any lesser penalty, although by varying the amount of back pay, some of the extrinsic criteria can be met.
43.
43. Under the British system, failure to follow due process procedure as recommended in the government guidelines on discipline and discharge practice can be grounds for reinstatement or compensation. The Advisory Conciliation and Arbitration Service's code of practice states that any procedures should be “in writing,” specifying “to whom they apply”; should “provide for matters to be dealt with quickly,” specifying “the actions which may be taken” (ranging from warnings through dismissals); should stipulate who has the authority to take disciplinary action; and should provide that employees be (1) informed of complaints against them, (2) given the opportunity to state their case before decisions are reached, (3) allowed to have their choice of union representative or fellow employee represent them, (4) ensured that careful investigation precedes any disciplinary action, (5) provided with an explanation of any penalty and (6) ensured that a right of appeal is provided with specified procedures. Advisory Conciliation and Arbitration Service, Disciplinary Practice and Procedures.
44.
44. Karl Renner, The Institutions of Private Law and Their Social Functions (London: Routledge & Kegan Paul, 1904), pp. 114-115.
