Patricia Werhane, The Right of Due Process
(See below for Ian Maitland)
1. What is employment at will (=EW)?
a. Discussion of EW
b. Exceptions to EW (also see #9 below)
c. Unwritten common law
d. Absent explicit contractual agreements, employers/owners have absolute right to hire, promote, demote, and fire whom and when they please
e. "May dismiss employees at will for good cause, no cause, even for cause morally wrong without being guilty of a legal wrong"
2. Alternative to EW is due process (DP)
a. Check on the arbitrary exercise of power
b. Procedure for appealing a decision, for getting a rational explanation for it and disinterested assessment of whether or not it was arbitrary
c. Specifically, a right of due process is a right to grievance, arbitration, and fair procedures to evaluate hiring, firing, promotion and demotion
i. Case for hiring less compelling?
AN ARGUMENT FOR DUE PROCESS
3. People should be considered innocent until proven guilty
a. DP in workplace is an extension of idea that accused person (whether guilty or not) has a right to a fair hearing and objective evaluation of guilt or innocence
ARGUMENTS FOR EW AND WERHANE’S RESPONSES
(Werhane is a critic of EW)
4. Reciprocity/Fairness Arg: EW is fair as applies to both parties
a. Each side can end the relationship at any time and for any reason
i. Each side can act arbitrarily
b. If workers can quit for any reason, why can't employers fire them for any reason?
c. If we are going to give employees a right of due process (and force employers to explain and justify their decisions), we should give employers a right of due process (and force employees to justify their decisions)
i. But since we don’t want employees to have to justify their decision to quit, we shouldn’t expect employers to have to justify their decisions either
d. Do employees have moral obligations to not quit for lousy reasons?
(1) Quit right after being trained
(2) Quit when an employer counting on employee for a big project that only she can do
ii. Still, it is not at all clear we should make these moral obligations legal obligations?
e. Unequal power response:
i. EW is not fair because employer has more power than the employee
ii. Employees typically need that job more than employer needs that employee
iii. Employee is seldom in a position to inflict harm on employer
f. EW lets employer frequently harm employees
i. Loss of job a harm
ii. Harder time getting new job (or rising in firm)
iii. Assumption is firing/demotion was deserved
g. Without DP, workers can be undeservedly and unfairly harmed and put at a disadvantaged relative to other workers
h. Principle: If one has significantly greater power to inflict harm, then should be some check on arbitrary use of power/authority
i. Need to protect weak against strong in terms of arbitrary use of power
i. Right of due process is a check on possible abuse of power on the part of the strong that employers have due to EW
5. Right of freedom justifies EW
a. DP only needed in non-voluntary arrangements (e.g., citizen vs government)
i. Police can't arrest you, government can't harm you without DP
b. Privately owned places of employment in our society are voluntary associations
i. Employees join freely and can quit at any time
c. Protection from arbitrary exercises of power is not needed in voluntary private organizations
d. DP interferes with freedom rights of both individuals and organizations
i. Coerces them into activities that are not of their own choosing
ii. Limits their freedom to contract
iii. This is one of Maitland’s arguments
Werhane's reply: No right of freedom to inflict undeserved harm
e. One's right of freedom to act does not extent to harming those who haven't done anything to deserve the harm
f. And firing constitutes such a harm
g. Need good reasons to justify exercising freedom in a way that harms others (need DP)
i. Is firing a withdrawing of a benefit, but not a harm?
ii. Can withdrawing a benefit be a harm?
iii. If a person becomes used to a benefit and it's central to their livelihood, is it a harm to withdraw that benefit?
iv. Is a job a benefit bestowed on a person?
v. A right? (It would be a positive right?) Do people have rights to employment? Rights against whom?
vi. Not always clear that undeservedly harming another constitutes a wrong
(1) Consider your out-competing me for my job
Werhane’s 2nd reply: Coercion going on either way and so appeal to freedom can’t count more for EW than for DP
i. Either employers coerced by DP to justify employment practices
j. Or people that are arbitrarily fired are coerced into situations of undeserved disadvantage
Another reply: Freedom/Non-coercion argument proves too much as suggests abolishment of anti-discrimination laws
k. It suggests we should abolish laws requiring those who provide a public service (restaurant/hotel) to provide it regardless of race or sex or religion
l. These laws force the individuals (engaged in voluntary associations) into activities not of their own choosing and limits their freedom to contract
m. We do accept as appropriate limits on freedom of voluntary association and freedom to contract in the market
n. One may not fire or fail to hire because of race, sex, religion, disability (this is a universal exception to EW in our country)
6. Property Rights Defense of EW
a. Property rights entitle owners to use and improve what they own
b. Workers can positively or negatively affect employers/owners property/production
c. Property rights entitle owners to control what they own and what happens to it
d. Thus they have right to "dispose" of labor of employees whose work is affecting their property
e. If you are working on my house or body (my property) I should at any time and for any reason be able to make you stop(unless an explicit contract says otherwise)
Werhane Reply: Workers/employees aren't property that owners/employees can dispose of as they see fit
f. Property rights give one right to dispose of material goods as one pleases, not persons
g. Employees not themselves property, even if work on property of others, not owned by employers
h. Right to demote/fire at will can't be defend by appeal to property rights since employees are not property of employees
Critique of Werhane's reply: PR defense of EW does not assume employees are property
i. Argument is not that owners have a right to do whatever they want to their property, and because employees are their property, owners can do whatever they want to them
j. Rather, because a business is the owner’s property, they have the right to control what others do to/with their property, and thus have the right to get people (employees) away from it (fire them), and no longer benefit from that property
Does PR defense of EW falsely assume property rights absolute?
k. There are limits to control and use of private property
l. Not an absolute right to do whatever one wants with property
i. Leave my knife in your chest?
ii. Build a pig farm on my lot next to yours?
Do PR include the right to use that property to treat people unfairly and unjustly?
m. Perhaps sometimes
n. I can give you 100 dollars even though other's deserve it more
o. I can pay the lazy slob more than the hard worker if I choose
p. Owner can pay his son a higher wage than other employees who do the same work?
q. These things may be morally inappropriate, but do we want to outlaw them?
r. Sometimes yes: Unfair discrimination in public accommodations, etc.
7. Utilitarian/Practical Argument for EW
a. EW necessary for maximum efficiency and productivity in workplace
b. Unproductive and disruptive workers interfere with business and productivity
c. Too much job security makes for lazy workers
d. Need to be able to freely fire unproductive workers
e. EW can also lead to inefficiencies: w/o DP could fire good employee in order to hire grossly unqualified son in law
i. Reply: Businesses have incentive against this
f. DP not really inefficient
i. It restrains arbitrary actions (how efficient are these?)
ii. It allows dismissal for inefficiency
iii. DP boost moral which increases efficiency
g. Government employees? Tenured faculty?
Reply: Can’t violate rights for maximum efficiency
h. If DP is a right, then even if getting rid of it is efficiency (is has utilitarian results), that is not a sufficient reason for EW
i. Rights are suppose to block such utilitarian arguments
8. Werhane's general ergument for guaranteeing employee rights
a. Rights include: DP, workplace safety, participation in decision making, meaningful work
b. US only major industrial nation offers little legal protection of rights of workers in employment
c. How can we think of ourselves as a free democratic society when rights of private employees not guaranteed?
d. Growing movement toward DP
i. Bus can adopt voluntarily or have it imposed on them
ii. Werhane’s article in 1984: Legal history since then does not clearly support his prediction.
LEGAL EXCEPTIONS TO EW
9. Legal exceptions in U.S. to EW
a. Unlawful discrimination (all states) (e.g., firing due to race, sec, age, religion....)
b. Public policy exemption (42 states) (e.g., firing someone for filing a worker’s compensation claim after being injured on the job; firing someone for refusing to lie under oath as directed by the company)
c. Implied contract exception (37 states) (e.g., employee handbook specifies procedures for termination and this is not followed)
d. Montana just cause legislation (and 11 states “covenant of good faith and fair dealing” exception–e.g, can’t fire someone for malice, e.g., so one doesn’t have to pay retirement benefits
10. Specific prohibitions in law
a. Race/sex/unrelated disability, for requesting a safety inspection, for supporting a union
i. Leaves out political & religious views?
11. Public policy exemption: When firing undermines important public policy
a. for reporting a crime or assisting in prosecution (stealing)
b. for reporting that a product is underweight
c. for refusing to commit perjury
d. for serving on a jury
12. Express/implied (non-written) contract (used to infer contractual promise)
a. Statements at hiring; Long successful service/promotions with pay raises and good reviews
b. Employee handbooks and personnel manuals (part of employment contract)
i. What if handbook explicitly denies due process?
13. "Implied covenant of good faith" (when firing is particularly arbitrary and unfair"
a. e.g., to avoid paying a commission or bonus
14. Mass Layoff notice: For companies over 100 employees who fire more than 500 or 1/3 of work force, 60 days (debated 6 months)
Rights in the Workplace: Nozickian Argument
1. Main Arg: Employee rights violate peoples’ rights to choose
a. In a competitive labor market, setting up a class of legal rights in workplace invades worker’s rights to freely choose the terms/conditions of employment
b. Also violates similar rights of employers
2. Rights (duties of employers) under consideration
a. Meaningful, fulfilling, self-actualizing work
b. Control over work conditions
c. Advance notice of closure/layoffs
d. DP for dismissal
3. Maitland opposes all with the same argument
4. In competitive market for labor
a. These standards are superfluous (don't need them) or
b. Come at the expense of non-consenting 3rd parties (other workers and consumers)
5. Maitland focuses only on cases where these "right" are inefficient/cost money:
a. If productivity increased by these rights (e.g., meaningful work, due process), employers will adopt them out of self interest
b. If neutral on productivity, competition for labor will lead to them
c. Only interesting case is where these rights reduce efficiency and cost a business money
i. Who pays?
ii. Individual employer? If so, will be at competitive disadvantage and go out of business
iii. All employers? Then consumers bear costs ( or shareholders too)
6. Labor market for jobs with these "rights"
a. If laborers prize meaningful work (or work with due process rights), will be willing to accept lower wages for it
b. Tradeoff between benefits (wage level and meaningful work, DP, notification, control in workplace, etc.)
c. Employees free to chose the packages of these benefits that they want
i. E.g., College teachers: meaningful work, good security, low pay
ii. NY City trash collectors: lousy work, high pay
d. To legislate meaningful work (or other employee rights) interferes with workers (and employers) rights to choose/offer package of benefits (pay/meaningful works) they want.
7. Another example: EW
a. Werhane says hard to imagine rational person agreeing in advance to being fired arbitrarily
b. Maitland reply: younger workers with marketable skills may choose this if price is right
c. Some employers may value unrestricted freedom to hire/fire and be willing to pay more for this added flexibility
d. Some employees will want due process and accept lower wages
8. Objection: If believe these are rights, shouldn't let there be a market in rights
a. Workplace safety with 1/100 yearly risk of dying for $20,000 extra pay: Should we allow such a market?
b. Company where the male managers get sexual favors from female employees at will and are willing to pay their female employees what is necessary: Allow this?
9. Idea of a tradeoff package between benefits and rights is bad one
a. Shouldn't allow such trade offs
b. He says "Shouldn't prohibit capitalist acts between consenting adults"
c. Paternalism objection: We might not be willing to make these tradeoffs ourselves, but to respect others we should let their choices rule.
10. Workers will pay for DP if want it enough
a. He says "if workers now w/o DP prefer it and are willing to pay for it then market will provide it as companies can make money by offering salaries lower that what it costs them to have DP"
b. Prevalence of EW suggests workers prefer higher wages to DP (or believe employers rarely violate it)
c. Reply: People should not have to pay for their rights!
11. Maitland's pragmatic arguments
a. European guarantee of worker rights
i. No new job growth (attributes it to presence of these rights)
ii. High unemployment due to rigidities of market
b. Anti-plant closing legislation is anti-plant opening legislation
a. Moral rights for workers violates rights of workers to freely choose conditions judge best for themselves
i. And violates consumers rights too
b. Competition amount employers preserves worker’s freedom to choose package of benefits/rights they want
c. Businesses that treat workers lousy, will be at a competitive disadvantage in the labor market
d. Businesses discretion to unilaterally determine terms/conditions of employment drastically limited by the market.