Justice, Employment, and the Psychological Contract

Source: Larry A. DiMatteo, Robert C. Bird, and Jason A. Colquitt, Oregon Law Review, Vol. 90 no. 2, 2012

From the abstract:
The United States has some of the most relaxed employment protections in the world. The American employment regime is centered on the long-standing employment-at-will doctrine, which allows employers to discharge employees at any time and for any reason. No notice is required. Even absurd rationales, such as left- handedness, are permissible grounds for discharge. Although a number of exceptions exist, the core principle enabling broad freedom to discharge remains firmly intact. All fifty states adhere to the employment-at-will principle in some form, and exhortations to overthrow the regime altogether have been unsuccessful. Voluminous scholarship exists evaluating the propriety and effectiveness of the employment-at-will doctrine. The doctrine has produced a deep secondary literature displaying a full spectrum of arguments and theories ranging from those advocating a complete overthrow of the doctrine to others advocating strict enforcement without exception.

While employers can, and regularly do, terminate workers without cause, notice, or reason, that does not necessarily mean that such legal discharges occur without a price. Employees do not leave without complaint, nor do they pursue redress only when the law stands in their favor. Rather, the attitudes of employees toward discharge, and their reactions to being discharged, originate from a complex set of beliefs and attitudes that do not necessarily conform to legal rules. Frivolous litigation, negative publicity, low morale, and increased stress can all arise from the retaliatory actions of discharged employees with a resultant decrease in productivity in the existing work force.

Instead of merely speculating on this point, in this Article we report the results of an empirical survey aimed at measuring the reactions of individuals to various employment discharge scenarios. The results of this survey offer striking insights into the workers’ perceptions of discharge under a variety of foreseeable conditions.

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