At-will Employment - Covenant of Good Faith and Fair Dealing Exceptions (aka. "Implied-in-law" Contracts)

Covenant of Good Faith and Fair Dealing Exceptions (aka. "Implied-in-law" Contracts)

See also: Quasi-contract

Only 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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