Running Your Business: Employment-at-Will

October 8, 2018

Austin Duerfeldt - Former Agricultural Systems Economist Extension Educator

Running Your Own Business Series Icon — As an employer and leader in your operation, you need to be aware of human resource practices and regulations, including exceptions to "employment-at-will."

Very few farm operations are strictly production-based models anymore. Drive around the countryside and you will notice what I am talking about. Row crop farmer Smith sells seed corn as an additional business. Beef rancher Wilson builds fence and rents out some portable cattle chutes and alleys. Then you have producer Davis who is doing tile and conservation work. Some of these side businesses become major income sources for those families.

I want to help those interested in starting a business or growing an existing business prosper. This series ― Running Your Business ― will cover basic principles of marketing and management, starting with employment-at-will.

Employment in Nebraska

Nebraska is an “employment-at-will” state. In general terms that means there are few actions a discharged employee can take to challenge an employer’s decision as a violation of the employee’s rights under his or her employment contract. There is a very important word in the last sentence, and that word was “few.” There are exceptions to when an employer can release an employee from the service of the business. There are times when the underlying reason for the termination could be an illegal discharge. Here are just a few to keep in mind.

Violation of Public Policy

A violation of public policy can take two paths. The first path is being fired for exercising the legal right to do something. A prime example of this is voting rights. Say that it is November and your harvest crew is still in full swing. If one of your employees wants to take time to vote at the polls, you as the employer cannot fire that individual because they left to vote instead of running the grain cart like they were instructed. Firing someone for practicing a legal right is not an acceptable termination justification. The second path is being fired for refusing to do something illegal. If you are attempting to have an employee falsify government-required documents, and fire them when they refuse, that is not an acceptable termination.

Implied Employment Contract

With implied employment contract issues the burden of proof falls to the employee. Implied employment contract issues may be things that are inferred from comments made during an interview or meeting, or written in a training manual. The key is that they are not specifically written down in the employment contract.

An example of this would be if your operation has an employee manual with a termination policy that outlines certain steps and procedures before firing an employee and the employer fails to follow them. At that point, the employee may have a case for a wrongful termination suit against the employer. Nebraska courts have ruled that an employee handbook does not automatically create an employment contract but may in some cases give employees the right to challenge employment termination in court.

Implied Covenant of Good Faith and Fair Dealing

The last area I will cover is implied covenant of good faith and fair dealing. This is a general assumption of the law of contracts in which it is assumed that people will act in good faith and fair dealings without breaking their word, using shifty means to avoid obligations, or denying what the other party obviously understood. An example of this is length of employment. An employer fires an employee stating the employment is “at-will.” The employee states that they were encouraged to join the company with mentions of retirement policies offered to employees. The breach in the implied covenant, given the circumstances, is that the employee would have an opportunity of a long career with the business.

Bringing it All Together

These are three of the broad areas in which employers and employees need to be aware. Wrongful terminations in an at-will state can involve discrimination practices, contractual, and retaliatory actions. Having an employee handbook that outlines the business’s disciplinary practices, employee rights, and termination practices is important and can help alleviate later issues. There are many university extension resources available online that provide examples of employee handbooks. It is also a good idea to have a good employment attorney or human resource professional to assist your operation.

Additional Resources

Building good employee relationships often begins with clear communication. For more information on creating your own farm labor handbook or other employee information guides, check out these resources and templates from other universities: