Delaware Business Lawyer Blog

In Delaware, if there isn’t a written employment contract and the duration of employment is indefinite, the employee is considered an “at-will employee,” which means the employer can fire the employee at any time without cause and regardless of the motive. That’s the general rule, and if you think about it for a minute, it’s actually fair. After all, if an employee can quit at any time and for any reason, why can’t an employer terminate the employee at any time and for any reason? But as with most general rules, there are exceptions. And the exception that’s recognized in Delaware is based on the concept that in every contract of employment, written or oral, there’s an implied covenant of good faith and fair dealing.

The Delaware courts that have looked at this issue have decided that an employee can claim a breach of implied covenant of good faith and fair dealing in any one of the following 4 situations:
(1) if the termination violates public policy;
(2) if there’s been misrepresentation by the employer and the employee relied on it;
(3) if the employer used its position to deprive the employee of compensation that has already been earned but not yet paid; and
(4) if the employer falsified its records to create fictitious grounds for the employee’s termination.

In a future article, we’ll take a closer look at these exceptions.

If you believe you were fired improperly, contact a Delaware litigation attorney to discuss your rights.

In a previous article entitled At-Will Employment In Delaware, I wrote about how Delaware employers have the right to fire their at-will employees without warning and without giving the employee an opportunity to improve. As a Delaware business lawyer, I have to remind my clients that employees who are terminated have the right to collect unemployment compensation unless there was "just cause" for their termination.

According to the courts in Delaware, "just cause" means a wilful or wanton act or pattern of conduct in violation of the employer’s interest, the employee’s duties, or the employee’s expected standard of conduct.

In this context, the word "wilful" means actual, specific, or evil intent, while the word "wanton" means needless, malicious, or reckless conduct.

There are some rules to remember when it comes to whether there was just cause.

1. An employee's wilful or wanton conduct will not be just cause for termination if the employer has consistently tolerated this conduct by his employees.

2. In order for there to be just cause, there must be notice to the employee that poor performance or behavior could result in termination of employment.

3. Violation of a company rule can be considered just cause, but only if the employee is aware of the rule and that violation of the rule can lead to termination.

4. Poor attendance can amount to just cause for termination.

The Delaware Department of labor puts out an Unemployment Insurance Handbook For Employers which is available here for downloading.

A small business owner recently asked about the steps he has to take before he can fire one of his employees. His questions included how many warnings the law requires him to give the employee, how much time he has to give his employee to improve his performance, and once the decision to terminate employment has been made, how much advance notice must the employee be given.

If there’s a written employment contract with the employee, then the contract will provide the answers to these questions. However, assuming there’s no contract, an employer in Delaware can fire an employee without warning, without an opportunity to improve, and without notice. In fact, the employer doesn't even have to explain why the employee is being fired. This is what’s meant by an “at-will employee.” An exception to this rule is that the employer can't fire an employee for reasons that discriminate based on such things as age, gender or race, or which violate the Americans With Disabilities Act. Another exception is that in Delaware, an employer can't engage in conduct that amounts to fraud, deceit or misrepresentation. For example, an employer can't falsify employment records to provide a false reason for firing an employee.