California Supreme Court: At-Will Employment Is Alive And Well

Last week, the California Supreme Court reminded employers of the importance of carefully defining the at-will nature of the employment relationship.  In Dore v. Arnold Worldwide, Inc., No. S124494 (August 3, 2006), Brook Dore sued his former employer, Arnold Worldwide, Inc. ("AWI"), for breach of contract and breach of the implied covenant of good faith and fair dealing.  Dore based his claims on AWI's offer letter and alleged oral representations made to him during the pre-hire process which led him to believe that his employment with AWI could only be terminated for "cause." 

Significantly, Dore signed an offer letter which explicitly stated that his employment with AWI was "at-will" and could be terminated "at any time" by either Dore or AWI.  Dore, however, argued that the at-will language in the offer letter was "ambiguous" because it was silent as to whether there had to be "cause" for the termination. 

In a clear victory for employers, the California Supreme Court held that the language of AWI's offer letter was unambiguous insofar as it clearly stated that Dore's employment was "at-will."  The Court rejected Dore's argument that the at-will clause was per se ambiguous because it did not expressly speak to whether cause was required.  According to the Court, "as a matter of simple logic," at-will language "ordinarily entails the notion of 'with or without cause.'"

The Dore decision underscores the importance of thoroughly drafting the at-will language in employment documents and taking great care to ensure that promises or casual comments are not made during the hiring process, or thereafter, that are inconsistent with such language.  Employers would be well-advised to confirm that their current employment documents (e.g., application, offer letter, employee handbook) satisfy the standard set forth by the Court in Dore.