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Is At Will Employment in Maine Ending?.

Is At Will Employment in Maine Ending?

May 17, 2021

The Maine Legislature could vote as early as next Wednesday on a bill to end at will employment in Maine.  The Committee on Labor and Housing voted it out of committee by a 7-3 vote.  Our hope is that the Legislature will reject this ill-conceived and poorly drafted legislation or, if the Legislature does not, that Governor Mills will veto the bill.

In Maine, like forty-eight other states, the courts have endorsed and followed the at will employment doctrine for more than 100 years.  At will employment allows Maine employers to terminate the employment of employees for any non-discriminatory reason, or for no reason at all.  This doctrine gives employers the flexibility to make staffing decisions based on business demands and employee performance.  There are a number of laws already in place that protect employees from illegal or discriminatory terminations and the vast majority of employers view termination of employment as a last resort.  Notwithstanding the lack of any meaningful evidence that Maine employers arbitrarily terminate employees (and in fact, in the current environment many employers are desperate to hire more employees), the bill’s sponsors have proposed a law that is like no other in the United States.  Only one other state in the country, Montana, has eliminated at will employment and even Montana does not go as far as this proposed Maine law would go.

An Act to End At-Will Employment (L.D. 533) would require “cause” to terminate or lay off an employee.  The new law would impose on employers a rigid three-step disciplinary process for most employment situations.  Employers would lose the ability to react quickly to many serious misconduct issues.  In addition, the proposed law fails to address how either economic layoffs or termination of seasonal employees could be handled in compliance with the law.

The law would cover employers who have employed 5 or more employees for each working day in each of 20 or more calendar weeks in the 2 years preceding a termination.  The law would also give employees the right to bring a lawsuit in court if they think an employer has failed either to follow the mandatory progressive disciplinary process or failed to terminate for a reason that constitutes good cause.

This bill, if enacted, would dramatically change the landscape for Maine employers.  The volume of employment litigation would predictably explode as former employees challenge whether “cause” existed to support a termination and whether the employer properly followed the mandatory progressive disciplinary process.  Unfortunately, litigation almost always results in a settlement payment – not because the employer engaged in wrongful conduct – but because of the costs and risks of litigating.  This bill, if passed, would have a dramatic impact on the cost of doing business as employers are faced with an exponential increase in claims, including an increase in frivolous claims.

Given the potential burden that this proposed law would place on employers, many of whom are struggling to negotiate the impact of the pandemic, we are hopeful that the Legislature or Governor Mills will reject this bill.  Contact your legislator to share how this law could impact your business.

For nearly sixty years, The Bennett Law Firm has been a leader on how to stay ahead of changes in policy.  For questions or for more information on this issue, please contact Peter Bennett (pbennett@thebennettlawfirm.com) or Rick Finberg (rfinberg@thebennettlawfirm.com).

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