Preserve at-will rights by ditching your employee probation period

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in Employment Law,Human Resources

If your employee handbook or job-offer letters say new hires will face a 60- or 90-day probation period, you should consider dropping that policy or, at the very least, referring to that period in some other way.

Reason: By setting up a probation period, you could imply that once the probation period is over, the employee becomes permanent or earns some new level of job security. That misunderstanding could eliminate the employee's at-will status.

Your goal: Make it as clear as possible that employees can be fired at any time for any reason. Include in your handbooks, applications and offer letters a disclaimer stating that employees are at-will unless they have a written agreement signed by the company president.

If you must use a probation period, make sure it says employees will remain at-will employees both during and after the probation period. And consider referring to it as an "introductory" or "training" period, words that are less likely to imply a contract.

Recent case: Brook Dore signed a job-offer letter that characterized his employment as "at-will." The letter said that phrase meant the company had the right to fire him "at any time just as you have the right to terminate your employment at any time." The letter also provided for a 90-day probation period.

Two years later, the company fired Dore but gave no reason. Dore sued for breach of contract, claiming the letter obligated the company to fire him only for good cause.

A federal appeals court sided with Dore, saying the company limited the meaning of at-will to termination "at any time," but not necessarily "for any reason." Second, the court said the presence of a probation period called into question whether Dore was entitled to be fired only for good cause. (Dore v. Arnold Worldwide Inc., Cal. Ct. App., 2004)

Final tip: To avoid the same problem, make sure your organization's at-will policy says employees can be terminated "at any time" and "for any reason."

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