In the opening speech of his 2020 presidential campaign, Bernie Sanders noted that he “did not come from a family of privilege that prepared [him] to entertain people on television by telling workers: ‘You’re fired.’” Like most Americans, Sanders said, he “came from a family who knew all too well the frightening power [that] employers can have over everyday workers.” In his “Workplace Democracy Plan,” released last week, Sanders outlined how he would rein in that “frightening power.”
Most of the coverage of the plan has focused on its calls for a sectoral bargaining system, among other sweeping changes. Much less has been written about the plan’s promise to end “at-will” employment through a national “just cause” law.
If enacted, “just cause” would reshape the American workplace, requiring bosses to have a justifiable reason for firing an employee. The added protections could embolden workers, finally giving them the due process rights on the job that they expect in the political sphere. But the details will matter — and that’s why it’s important to compare “just cause” and “at will” in the United States to social-democratic countries.
The American Workplace
In the United States, there are currently two groups of employees who have contractually negotiated just cause termination: unionized workers, who secure just cause through collective bargaining agreements, and corporate managers. Nearly everyone else, to varying degrees, is an at-will employee — they can be fired on any given day, for almost any reason. Leave a comment on Facebook that your boss doesn’t like? At-will says your employer can give you a pink slip. Refuse to have your stuff searched? See ya.
Employers don’t have absolute authority. At the federal level, the “concerted activities” protection, which falls under the jurisdiction of the National Labor Relations Board (NLRB), makes it illegal for private-sector employers to fire, suspend, or retaliate against workers for organizing. Workplace anti-discrimination laws, enforced by the Equal Employment Opportunity Commission, are meant to ensure that protected classes of workers (for example, African Americans, people with disabilities, or women) aren’t fired because of their boss’s prejudices. In practice, however, these protections are often undercut by the standards of proof required and the legal resources employers can command compared to the average worker.
Most states do offer additional protections. The most common one prohibits bosses from firing employees for complying with public policies — for example, applying for workers’ compensation. In forty-two states, employers have their right to fire restricted by the termination policies spelled out in employee handbooks. A handful of states, like California, sometimes read “good faith” provisions into the employment contract — protecting workers from being arbitrarily fired if they perform their duties in a satisfactory way.
In forty-nine out of fifty states, exemptions or not, bosses have a wide latitude to get rid of their workers. Only one state — Montana — has abolished at-will employment (although, as we’ll see, that law leaves much to be desired).
Unlike at-will employment, which creates a patchwork of legal exemptions, just cause laws aim to standardize the employee-employer relationship and create a uniform system of employment protection for all workers. The Nordic countries in particular have strong just cause laws. From Montana to Sweden, these statutes consistently address the same four questions:
- What workers are excluded from just cause?
- What grounds for termination are considered just?
- If a termination is considered just, what steps are required before a layoff?
- What remedies do workers have if they are unlawfully fired?
While these models deal with similar questions, the ways they differ can have substantial consequences for workers. The source of these differences is often explained by the social coalitions that supported the laws in the first place. Montana’s “Wrongful Discharge from Employment Act” (WDEA) illustrates the point well.
Passed in 1987, Montana’s law came about following a number of expansive court rulings in the state that limited employers’ at-will powers and meted out large fines to delinquent bosses. Employers, afraid the tide was turning against them, pressed for legislation that would standardize employment relations. But while employers in Big Sky Country were willing to compromise on just cause for discharge, their interests were still reflected in the bill: compared to the Nordics — where just cause was typically won by labor parties, unions, and farmers — Montana has underwhelming termination procedures and limited financial remedies.
So if not all just cause laws are created equal, what are some of the things that separate the good from the mediocre?
Across the various models, probationary employees are the workers most commonly excluded from just cause. Even the most progressive employment protections assume a probationary period where workers can be fired at will. Although all of the models discussed here — Montana, Denmark, Finland, Norway, and Sweden — include this exclusion, the way the law defines the probationary period can risk introducing arbitrary discrepancies in employment protections, usually by leaving the length of the probationary period up to the boss.
While Finland, Norway, and Sweden all establish a maximum probationary period, ranging from four to six months, Montana’s WDEA includes an assumed six-month probationary period (though only in the absence of an explicitly defined one). Denmark fits somewhere in the middle, with different probationary periods for blue-collar and white-collar employees.
As a rule, just cause legislation should always try to create a uniform probationary period, as in Finland, Norway, and Sweden, to ensure that workers are able to count on the same probationary period regardless of their employer.
Personal vs. Economic Dismissals
Dismissals have to be justified on “personal” or “economic” grounds in both Montana and the Nordic countries. Although personal causes can vary from incompetence to more serious issues, like harassment, economic reasons are more straightforward. Things like downsizing, mergers, and firm reorganization — which aren’t tied to a particular employee’s performance — can be considered just cause for layoffs.
There are limits to what personal causes can justify termination. In Norway and Sweden, if an employee can no longer perform their job duties because they are pregnant or have a disability, the employer has to accommodate, rather than fire, the worker. Regardless of the model Sanders chooses, his just cause legislation should prevent employers from using legal pretexts to “coincidentally” lay off employees who they would otherwise fire at will.
The same principle holds for economic grounds. On this point, Sweden’s standard is very similar to the one negotiated in most American collective bargaining agreements. In the event of downsizing or redundancy, the last hired is the first fired. While some might take issue with this standard in specific, enforcing fair procedures for larger layoffs is an important feature of any just cause law.
Creating steps that employers must go through before they can fire an employee strikes most people as fair and gives workers peace of mind. Established legal procedures also make it easier for unions, courts, and government agencies to determine if a worker was terminated with cause.
Like the “progressive discipline” standards that American unions have fought for (and won), an important component of Nordic employment protections is that workers have to be told that they’re failing to meet their employer’s standards — and be allowed an opportunity to improve — before they can be let go. In Denmark, Finland, and Norway, the expectation is that notice will be delivered to workers, and their union, in writing. Workers are then entitled to a meeting, with their union representative present, to discuss alternatives to termination.
Fair processes are also mandated when employees lose their job for economic reasons. In the Nordics, the boss is expected to try to find another position for them before resorting to termination. Whether for personal or economic reasons, the Nordic models all guarantee a notification period — not unlike the two weeks’ notice US employees are expected to give their bosses.
Progressive discipline, written notice, and notice periods are essential features of any just cause law because they allow workers, their unions, and government agencies to hold employers accountable, before and after termination. These provisions also allow workers to seek remedies before they’re unemployed, which helps offset the imbalance in legal resources. One of the significant weaknesses of Montana’s law is that it doesn’t have any of these features. To make sure that the Workplace Democracy Plan delivers the due process its name implies, Sanders should look to the Nordics when defining fair termination procedures in his national just cause law.
In most places with just cause employment, remedies for workers who have been unlawfully fired are bound up with financial penalties for employers who refuse to obey the law. The Nordics, and to a lesser extent Montana, offer remedies that offset the barriers preventing most Americans from taking advantage of their employment protections.
Across all of the models in question, workers who have been wrongfully fired are entitled to lost wages and benefits. The Nordic models, however, also include awards for punitive damages. Sweden’s law is unique in that workers who challenge their dismissal as unjust must be paid their salary and benefits for the entire time their termination is being investigated.
Remedies shouldn’t be limited to financial awards alone. Norwegian workers, more than their Nordic neighbors, tend to win reinstatement to their old jobs if they’ve been wrongly fired, while Swedish employers can be fined if they refuse to rehire a worker who was wrongfully discharged.
Insofar as remedies are concerned, Montana’s law is undeniably the weakest. If Montana’s employers supported the WDEA because it made financial penalties predictable, it also made settlements for workers less generous. Whether workers in Montana turn to arbitration or the courts, they still bear most of the costs for legal representation, unless they have a union or win their case. Unlike Norway, Montana’s model also doesn’t have reinstatement remedies for workers hoping to return to their old job. While Montana’s law is still an improvement, absent these legal remedies, any national just cause bill emulating the WDEA would be significantly weaker than Nordic alternatives.
Due Process at Work
If our political institutions were as unfree as our workplaces, people would be disgusted. It’s hard to find a more outrageous example of this than the US system of at-will employment. While some progress has been made in limiting the boss’s absolute power, right now nothing but the whim of an employer stands between millions of workers and unimaginable economic pain.
Sanders’s Workplace Democracy Plan hopes to change that.
The challenge of transitioning from our at-will system to a standardized system of employment protections is a daunting one. It’s unclear whether Sanders would try to accommodate the legal exceptions that are already in place, or try to overhaul the American labor relations system all at once.
Whichever path Sanders chooses, it’s important to remember that policies aren’t shaped by politicians and their staff in isolation — they’re molded by social coalitions. If Sanders found himself in a position to enact his agenda, he couldn’t rely on the praise that some labor leaders have offered for the Workplace Democracy Plan. The organizing and advocacy of the labor movement must be the building blocks of Sanders’s political revolution.