Impacts

Families, employers, and communities benefit from the job security of just cause, due process, today and tomorrow.

See the below summaries of scholarship examining impacts of just cause.

It's simply positive.

Work Rules from Front-Line to C-Suite

A just cause standard in the law objectively balances the rights of employers and protections for employees.  Management has a right to impose disciplinary action and discharge to address unsatisfactory employment activity.  Employees have an interest in retaining employment and preventing inappropriate or erroneous disciplinary action.  Just cause does not prohibit employers from imposing discipline.  Responsible employers adopt rules, establish clear performance standards, and inform employees of how decisions are made regarding discipline and discharge.  Just cause encourages transparency and mutual understanding.

Just cause is pervasively common language within discipline and discharge articles of  collective bargaining agreements (contracts between labor unions and employers).  It's also a standard of employment contracts for executive officers of publicly traded companies.  Both Union members and business leaders know the inherent value of just cause, due process, job security protection.

See, Stewart J. Schwab and Randall S. Thomas, An Empirical Analysis of CEO Employment Contracts: What Do Top Executives Bargain For?, 63 Wash. & Lee L. Rev. 231 (2006). Available at: https://scholarlycommons.law.wlu.edu/wlulr/vol63/iss1/6

Schwab and Thomas examined the key legal characteristics of 375 employment contracts between some of the largest S&P 1500 public corporations and their chief executive officers.  From their sample, in only twenty-five cases are contracts expressly declared to be at-will.  In twenty-four of those twenty-five, the CEO still is given greater rights for termination without cause.  Over 97 percent of contracts included provisions defining a basis for just cause termination.

Family bonds, and Educational Opportunity

Intergenerational effects of employment protection reforms published in LABOUR ECONOMICS (January 2020), by Jenifer Ruiz-Valenzuela estimates the link between parental job insecurity (as measured by the contract type held by parents) and children’s school related outcomes.  Ruiz-Valenzuela finds that children with parents working with just cause protections have stronger educational outcomes.  

Available at: https://www.sciencedirect.com/science/article/pii/S0927537119301101

Wage Equity, Productivity and Job Growth

In his October, 2018 doctoral dissertation at the Univesity of Massachusetts Amherst, Constraining Labor's "Double Freedom": Revisiting the Impact of Wrongful Discharge Laws on Labor Markets, 1979-2014, Eric Hoyt found that more stringent laws against dismissal boost workers' wages, particularly for women and workers of color.  Hoyt concludes that labor productivity is boosted by Employer investment in workers on-the-job training, heightened learning-by-doing associated with longer job tenure, and reciprocally linked to significant wage gains.

Available at: https://scholarworks.umass.edu/dissertations_2/1354/

Market Investment

Fear not, employer costs for implementing just cause protections for employees have proven to be modest and short-term.  In Do Wrongful Discharge Laws Impair Firm Performance? published by THE JOURNAL OF LAW AND ECONOMICS (2009), Robert Bird and John Knopf found that "effects on labor expenses and profitability appear only for the first year after the adoption", without long-term effects on such.  

Available at: https://www.journals.uchicago.edu/doi/10.1086/596560

It's time to raise expectations and standardize the best practices from business.

It's time to invest in ourselves, our neighbors, and tomorrow by securing just cause, due process, job security.