How Wrong Are Employees About Their Rights, and Why Does It Matter?

Most employees are terminable at will, yet apparently most believe they only can be fired for cause. That belief persists in the face of a standard at-will disclaimer. In this Essay, Cynthia Estlund explores some causes, consequences, and possible legal responses to that gap between employees’ beliefs and reality. She suggests first that employers, by acting as if they must justify discharges, may foster employees’ erroneous beliefs by contradicting the words of a disclaimer. Whatever its source, the gap is problematic because it allows employers to enjoy both the benefits of employee perceptions of job security and the benefits of employment at will. In principle, switching the default to “for cause” should help bridge the gap. A weak default, however, would be defeated by an at-will disclaimer, and would accomplish little. Employers already act as if the default is “for cause” and disclaim it; employees do not credit that disclaimer. A stronger default, such as a waivable right to for cause protection, holds greater promise. If the standard for waiver is high enough to ensure that employees understand their rights, employers would have to choose between the benefits of employees’ expectations of job security and the benefits of employment at will. This Essay concludes by sketching a case for bringing the law into line with employees’ optimistic beliefs.