The Model Employment Termination Act

Abstract

Traditionally non-union employees are hired under the common-law doctrine known as “employment at will,” which allows the employer or employee to terminate the relationship at any time for any reason. Over the years exceptions to that doctrine have crept into case law and, in those states where the tort of wrongful discharge is recognized, wronged employees have recovered substantial punitive and compensatory damages. To avoid expensive litigation, the untested Model Employment Termination Act proposes the use of public-financed arbitrators to settle quickly questions of wrongful termination. Under the act, employees give up the right to sue employers for wrongful discharge in exchange for a “good-cause only” termination guarantee and access to speedy arbitration. Employers give up their reliance on the employment-at-will doctrine in exchange for protection from huge court settlements. The employer, if found to have acted improperly, may only be responsible for reinstatement, back pay, and attorney's fees should the employee be successful at arbitration.