Over one hundred years ago, the Virginia Supreme Court held that when an employment contract does not specify a time period for its duration, “either party is ordinarily at liberty to terminate it at-will by giving reasonable notice of his intention to do so.” (Stonega Coal & Coke Co. v. Louisville & Nashville R.R. Co., 106 Va. 223, 226, 55 S.E. 551, 552 (1906).) However, since issuing this decision in 1906, the Supreme Court has never addressed or explained what “reasonable notice” means – until now. In Johnston v. William E. Wood & Associates, Inc. 2016 Va. LEXIS 67 (June 2, 2016), the Virginia Supreme Court analyzed the meaning of “reasonable notice” and held that it simply means effectual notice that the employment has been terminated.
Download our free white paper Top 10 Mistakes Employers Make and avoid costly mistakes
Plaintiff’s Claim of Wrongful Termination.
Brenda Johnston worked at William E. Wood & Associates (“Wood”), a real estate services firm, for 17 years. She was an at-will employee. When she was terminated without any advance notice, she sued alleging that she was wrongfully discharged. She argued that her employer breached an implied term of her employment contract to provide some form of advance notice before termination.
Needless to say, Wood disagreed with her and filed a demurrer to her lawsuit which was granted by the trial court. Johnson appealed and the case was reviewed by the Virginia Supreme Court.
Amici Curiae in Support of Wood.
An amici curiae brief was submitted to the Supreme Court in support of Wood by the Virginia Chamber of Commerce, the Society for Human Resource Management, the Virginia Society for Human Resource Management State Council, the Virginia Assisted Living Association, the Virginia Retail Merchants Association, and the Virginia Restaurant Lodging & Travel Association (the “Virginia Employer Representatives”).
The amici curiae brief explained that for over 110 years Virginia’s employees have walked off jobs and its employers have terminated employment without giving advance notice. The brief pointed out that employers rely upon the right to make terminations effective immediately upon communication of notice; and, because principles of contract govern employment relationships, employees have the mutual and reciprocal right to quit immediately upon communication of notice. According to the Virginia Employer Representatives what Johnson was essentially asking the Court to do is change this well-settled at-will interpretation and practice by: (1) recognizing a new tort of wrongful termination if “reasonable” (i.e. advance) notice of termination is not provided; and (2) imposing a new implied contract term requiring “reasonable” (i.e. advance) notice of at-will employment termination, even though the timing of which is to be based on the unique facts and circumstances of each and every employment termination decision. They argued that if the Court were to do so, every employment termination decision would be turned into a jury question.
The Supreme Court Decision.
The Court answered the question of whether reasonable notice requires advance notice by turning to the very simple principle behind at-will employment. “At-will employment offers maximum flexibility to an employer and an employee. An employee remains at liberty to leave his employment for any reason or for no reason. By the same token, the employer is free to terminate the employment relationship without the need to articulate a reason.” According to the Court, imposing a requirement that reasonable advance notice be provided before termination “is antithetical” to the flexibility that lies at the heart of the at-will doctrine and would undermine the indefinite duration of at-will employment.
In the proceedings, Johnson acknowledged that what is reasonable notice would vary based on each employment situation and conceded that immediate notice would be appropriate in some situations. However, she argued that in other situations (like her own) some unspecified amount of advance notice was required. In line with the argument put forth by the Virginia Employer Representatives’ amici curiae brief, the Court said that if it were to adopt this “amorphous standard,” every employer would have to gauge what is reasonable advance notice under the circumstances and, if the employer gets it wrong, it could face the prospect of an expensive trial with an uncertain outcome. Conversely, employees could also be sued by their employers for failing to give sufficient advance notice before resigning. Thus every separation of at-will employment would become a jury question.
The Court ultimately concluded that the phrase “reasonable notice” simply means effective notice that the employment relationship has ended. It said that if there is to be some fundamental change to the principles of the at-will employment relationship, it should be left to the legislature to handle not the courts.
Take-away: At-will employment in Virginia remains intact. If employers wish to terminate an at-will employee, they may do so either with or without prior notice. However, as most employers are (or should be) aware, many federal and state laws protect employees – including at-will employees – from terminations that are motivated by an employee’s protected class or protected activity. Thus, employers are well served if they can articulate, and better yet, document (for themselves) the legitimate non-discriminatory and/or non-retaliatory reason for terminating an at-will employee before taking the action.