Commentary

Bill to end at-will employment dies between chambers

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A measure that would end at-will employment in Maine failed in the House last Thursday by a 35-99 vote, though an alternate version of the bill that would simply study the issue narrowly passed 71-63. Once the bill reached the Senate, the body accepted the minority report to defeat the bill in non-concurrence. Both chambers subsequently insisted on their respective motions and the bill died between chambers on June 15.

LD 553, sponsored by Rep. Michael Sylvester (D-Portland), would have required an employee to undergo a three-step discipline process before an employer could fire them, and even then, it must be for a particular cause in accordance with the law.

Such a change to labor laws in Maine would significantly alter the contract between employers and employees, with each having the power to terminate their working relationship at any time.

When asked about the bill, Rep. Joshua Morris (R-Turner) said, “If you have an employee that is consistently not performing up to the standards that the business sees fit, then they should have the right to terminate their employment.”

A similar law, the Wrongful Discharge from Employment Act (WDEA), was enacted in Montana in 1987, making it the only state in the US that does not have at-will employment.

Just this spring, the Montana legislature made the first significant modifications to the law since it was originally passed. These changes have been viewed primarily as beneficial to employers, as they clarify terms like “good cause,” extend a new hire’s “probationary period” and solidify into law a long line of WDEA-related precedents set by the Montana Supreme Court.

Though research on this particular legislation is scarce, a 2005 study on the employment effects of the WDEA and other related Montana Supreme Court decisions found that employment in Montana would have been higher in 2001 had the WDEA never been enacted. 

The study concluded employment in Montana in January 2001 would have been 396,200, instead of the observed 381,800, had Montana remained a strictly at-will state. The authors go on to say that at-will employment was the best approach in terms of sheer number of jobs.

The current makeup of at-will laws across the country is, at the surface level, simple. Every state is an at-will employment state, except Montana, but there are a few common exemptions in state’s laws that make things a bit more complicated.

The first is a public policy exemption, meaning an employer can’t fire an employee for refusing to break the law. Another protects an employee when an implied contract has been established between the employee and the employer. There are other exemptions, though they are less common and more nuanced.

The map below created by Paycor, a human capital management software company, outlines the various at-will employment laws throughout the country, last updated in November 2020

Currently in Maine, both an employer and an employee reserve the right to leave their respective role at any point in time. Businesses, if they so choose, can give employees multiple chances. Altering this relationship and requiring by law that each employee gets “three strikes” forces businesses into a corner as to how they operate.

As Peter Gore, vice president of the Maine State Chamber of Commerce, pointed out in his testimony against the bill, there are numerous state and federal protections already in place for employees against unjust firings. He lists the Maine Human Rights Act, the Workers’ Compensation Act, the Whistle Blowers’ Act and the Americans with Disabilities Act as laws with such protections.

Gore raised further questions about the actual implementability of the law. If a worker is accused of some kind of harassment, would they be permitted to be instantly fired? If not, their actions could go on until they meet the requirements prescribed by LD 553.

David Clough of the National Federation of Independent Business noted that most small businesses don’t have a dedicated HR representative to handle such disciplinary cases that LD 553 would raise.

If the legislature did want to advance this bill, they certainly could have picked a better time to pursue it. Businesses are struggling to find workers leading into the tourist season, inflation is at a 12-year high and both Maine and the United States are still limping back into a fully operational economy.

To force these new labor restrictions upon employers now would be a grave mistake. LD 553 would likely harm employment across the state of Maine at a time when we most sorely need it. Fortunately, it appears we’ve overcome the threat posed by LD 553 — at least for now — though it’s likely this issue will be pursued again in future legislative sessions.

About Nick Linder

Nicholas Linder, of Cincinnati, is a communications Intern for Maine Policy Institute. He is going into his second year of studying finance and public policy analysis at The Ohio State University. On campus, he is involved with Students Consulting for Nonprofit Organizations and Business for Good.

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