Covenant of Good Faith and Fair Dealing Exceptions (aka. "Implied-in-law" Contracts)
See also: Quasi-contractOnly eleven U.S. states have recognized a breach of an implied covenant of good faith and fair dealing as an exception to at-will employment. These 11 states are:
- Alabama
- Alaska
- Arizona
- California
- Delaware
- Idaho
- Massachusetts
- Montana
- Nevada
- Utah
- Wyoming
This exception for a covenant of good faith and fair dealing represents the most significant departure from the traditional employment-at-will doctrine. Rather than narrowly prohibiting terminations based on public policy or an implied contract, this exception – at its broadest – reads a covenant of good faith and fair dealing into every employment relationship. It has been interpreted, by some courts, to mean either that employer personnel decisions are subject to a “just-cause” standard or that terminations made in bad faith or motivated by malice are prohibited.
Read more about this topic: At-will Employment
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