By Ambi Biggs
On June 2, 2016, the Virginia Supreme Court resolved a split among the lower courts and the federal district courts in Virginia regarding the notice employers are required to provide at-will employees prior to terminating them. In Johnston v. William E. Wood & Associates, the plaintiff worked at a real estate services firm for 17 years as an at-will employee. When her employer terminated her without any advance notice, she brought suit, alleging that she was wrongfully discharged and the company had breached an implied term of her employment contract. The Virginia Supreme Court sided with the employer.
The court noted that it had held, in another case, more than 100 years ago that when an employment contract does not specify a time period for its duration, “either party ordinarily is at liberty to terminate it at-will giving reasonable notice of his intention to do so.” Although the court described this at-will doctrine as a “cornerstone” of the state’s employment law, it acknowledged that the Virginia Supreme Court had never addressed what constituted reasonable notice, and specifically whether it included a temporal component. Thus, the outcome of the case turned on the meaning of “reasonable notice.”
The plaintiff argued that “reasonable notice” meant that the notice must be provided at some reasonable time before the termination, while the employer argued that the phrase simply meant that the notice had to be effectual and actually inform the employee that the employment relationship had terminated. The court noted that Virginia circuit courts and U.S. district courts in the state were divided as to whether advance notice was required.
The court held that the purpose of at-will employment was to provide flexibility to both the employee and employer to terminate the employment relationship for any reason or no reason. Thus, imposing an advance notice requirement would be antithetical to the at-will employment doctrine. Requiring advance notice would lead to uncertainty because the amount of advanced notice that would be deemed reasonable would vary on a case by case basis, so there would be no clear standard. If employers guessed incorrectly, they could end up facing litigation. Likewise, if employees did not provide sufficient advanced notice that they were leaving their jobs, they could be sued by their employers, which could deter employees from seeking other employment options.
The court held that “the phrase ‘reasonable notice’ simply means effective notice that the employment relationship has ended.” It noted that if employers were not required to provide effective notice of the termination of employment, an employee likely would continue to work, only later find out that she had been terminated and would not be paid for her work. Likewise, if employees were not required to provide effective notice, an employer may continue to unwittingly pay an employee who no longer performs work for it.
The ruling allows Virginia employers to terminate at-will employees without providing advance notice, as well as allows at-will employees to terminate their employment without advance notice, as long as the terminating party provides effective notice that they are ending the employment relationship. While the opinion casts the outcome as beneficial to both employees and employers, in practical application it likely will favor employers more than employees. This is so because litigation involving the wrongful termination of an employment relationship usually is brought by employees who believe they were terminated without sufficient notice, and less often brought by employers against employees who did not provide enough notice that they were leaving the company.
About the Author: Ambi Biggs is an associate with PilieroMazza who practices in the areas of litigation and government contracts. She may be reached at [email protected].