TOP TIP: Impact of Written Agreements on At-Will Employment
In Swift v. University of Maryland, College Park, the Maryland Court of Appeals (the highest State court) reiterated that at-will employment, which is presumed in Maryland and which allows either the employer or the employee to terminate employment at any time with or without cause, may be modified by written agreement, including a collective bargaining agreement (CBA). This case reminds employers, in Maryland and other at-will States, to ensure that their written agreements – whether private or collectively bargained – do not inadvertently alter an employee’s at-will employment status.
Facts of the Case: The plaintiff was an employee of the University and a member of the Union. The CBA negotiated between the University and the Union acknowledges that its terms function in parallel with non-conflicting University policies. The CBA also provides that employees may only be disciplined for cause and sets forth a progressive disciplinary procedure, including time limits for discipline. The CBA specifically provides that the time limits do not apply to the University’s Notice Termination policy. This Notice Termination policy, in turn, states that employees are employed on an at-will basis, and may be terminated at any time. It also provides that employees who are involuntarily separated will be given a notice period, the length of which depends on years of service.
Initially, the plaintiff received a counseling letter that warned him of potential disciplinary action, including termination. Less than three months later, he was terminated in accordance with the Notice Termination policy and provided with six months notice. Before the Court of Appeals, the plaintiff argued that the CBA and University policy could not co-exist, and the CBA altered his at-will status.
The Court’s Ruling: The Court of Appeals first reiterated the principle of presumed at-will status in Maryland, and the fact that such at-will status could be altered by agreement. The Court noted, however, “the mere existence of an agreement doesn’t transform at-will employees into for-cause employees for all purposes. Instead, the agreement binds the employer to the agreed protections, and the documents, not the label, control.” Thus, according to the Court, the existence of certain procedural safeguards does not necessarily change an employee’s at-will status.
In the current case, the Court found no conflict between the CBA and the University’s Notice Termination policy. The CBA itself recognizes different tracks for discipline and notice terminations. While the University cannot institute disciplinary action without cause, there is no restriction on its ability to execute a notice termination, in compliance with the notice protections, and this is what it did. As the Court noted, “notice termination isn’t discipline.”
Lessons Learned: At-will employment is presumed in all but one State (Montana). Employers should review their written agreements and policies to ensure that the language is consistent with – and does not unintentionally alter – the employee’s at-will status. Handbooks, offer letters, and policies can change an employee to for-cause termination status, if the language is not carefully drafted and/or the document fails to contain a disclaimer that reinforces the premise that it does not modify the employee’s at-will employment status.
