At Will as Taking
abstract. Employment at will is legally and politically entrenched. It is the default termination law in forty-nine states and controls the working lives of most U.S. workers, creating a political economy of precarity and exploitation. In light of these challenges, this Essay offers a novel framework for a constitutional challenge to the at-will termination regime under the Fifth Amendment’s Takings Clause.
The argument advanced in this Essay is that at-will rules strip workers’ job security and are, thus, unconstitutional takings of workers’ property. Following the Supreme Court’s lead, numerous courts equate public-sector workers’ job security with property entitlements in their jobs under the Due Process Clause. I offer theories to expand this doctrine from the public sector to the private sector, and from the Due Process Clause to the Takings Clause. As a sword, takings claims can be raised against the prevailing termination regimes in forty-nine states. As a shield, at-will-as-takings claims can protect public-sector workers against increasing precarity in federal, state, and local government work.
This Essay makes two additional contributions. First, it rejects the premise underlying contemporary critiques of the Supreme Court’s takings doctrine that identify employers as the only property owners on the job. Second, it offers a property-friendly progressive constitutional vision that rejects reliance on the administrative state as the only tool for progressive policy advancements.
author. Assistant Professor, ILR School, Cornell University. Associated Faculty, Cornell Law School. For helpful comments and discussions, I thank Lee Adler, Kate Andrias, Cameron Bateman, Steve Befort, Hanoch Dagan, Cynthia Estlund, Kate Griffith, William Herbert, Amy Kapczynski, Desirée LeClercq, Martin Malin, Robert Ovetz, Steward Schwab, Joseph Singer, Joseph Slater, John Fabian Witt, and Yiran Zhang. I thank Cameron Misner, Kate Sloan, and Catherine Zannetos for excellent research assistance. I thank Heather Rothman for superb copyediting. I thank the editors of the Yale Law Journal, Emma Findlen LeBlanc, Karina Shah, and Dena Shata, for making this piece so much better. For comments and questions, gracabi@cornell.edu. For Adir Gaoury (2003-2023). We miss you.
[The] purpose of the ancient institution of property [is] to protect those claims upon which people rely in their daily lives, reliance that must not be arbitrarily undermined.
—Board of Regents v. Roth, 408 U.S. 564, 577 (1972)
Introduction
Property is a legal euphemism for sovereignty.1 A legitimate claim of property rights endows autonomy, power, and deference. The question of who can do what to whom is often legally answered by first sorting out those who have a legitimate property claim from those who don’t. In the workplace, the stakes of this question are immense.
Courts take for granted that employers are the sole property holders in the workplace.2 Time and again, work-law3 conflicts are resolved by this narrative.4 This is seen, for example, by the doctrine that employers’ right “to protect and continue . . . business” operations trumps striking workers’ interest in not being permanently replaced.5 And more recently, employers’ constitutional property right was leveraged to declare a California state law guaranteeing union organizers’ access to farmworkers an unconstitutional taking under the Fifth Amendment.6
Statutory amendments have proven to be insufficient for challenging the constitutionally anchored employers’ sovereignty.7 Instead, novel constitutional claims are needed. In this Essay, I develop such a claim under the Fifth Amendment’s Takings Clause: workers have a constitutional property right in their job, which the state takes with at-will employment rules.8 Thus, at-will rules are a constitutional violation—a taking of workers’ property rights without just compensation.
Anchored in state statutes and in judge-made doctrines,9 at-will rules allow employers to terminate workers for good reason, bad reason, or no reason at all. In fact, workers can be terminated with no notice nor other procedural obligations.10Despite more than half a century of struggles and critiques,11 at-will rules dominate labor markets today.12 Although at will is a mere default rule, which can be circumvented by employer-employee contracts or federal and state legislation, significant numbers of U.S. employees remain at-will workers today.13
The effects of the at-will rule are felt throughout the labor market. All workers are precariat by default because of the rule and this precarity is particularly troubling because the United States places jobs at the epicenter of workers’ subsistence. Goods that in other Western democracies are provided on a public basis—such as health insurance, retirement savings, and more—are job-dependent in the United States.14
Thus, while at-will rules apply to the rich and poor alike, their bite is felt most by the low- and middle-income tiers of the labor market.15 Wealthy and thereby powerful employees can negotiate notice requirements, just-cause provisions, and extravagant severance packages.16 Public-sector and unionized workers can secure protectionist regulations and just-cause provisions in their own small patches of the labor market too.17 But workers on the middle and low levels of the labor market have limited information18 and no bargaining chips to contractually alter the default.19
Unlike some other default rules, at-will rules do not trace
the expectations of
workers.20 Most workers expect
a level of job security that simply does not exist in the at-will regime.21 Once workers gain
information and bargaining power, they reveal a preference for job security as
a premium asset in the labor market.22
Furthermore, courts and regulators routinely cite workers’ at-will status to justify workers’ subpar workplace protections.23 Examples are plentiful. Public-sector at-will workers enjoy less robust equal-protection rights.24 Courts also construct workers’ contractual rights—such as good faith and fair dealing—to align with at will’s precarious nature.25
At-will rules undermine not only the distribution of power vertically between employers and their employees,26 but also the distribution of power horizontally among otherwise similarly situated privileged and disadvantaged workers. These rules do so by weakening equal-opportunity laws.27 Where most workers are at-will, bosses’ biases and structural discrimination can go unchecked.28 When employees have no durable stake in their jobs, keeping grievances to themselves or simply quitting is a rational choice.29 Thus, at-will rules undermine equal opportunity by chilling workers’ voices about inequities and injustices in the workplace. By affecting the poorest and socially excluded workers the most, at-will rules are a regressive policy tool that transfers property rights from employees to employers and workplace power from marginalized groups of employees to socially privileged ones.
U.S. workers have all the skin in the labor market but no power or voice to affect where the market is going.30 Facing increased risk of automation-induced layoffs,31 workers are often nowhere near the table where decisions are made about their lives.32 The at-will employment regime dictates that most U.S. labor-market participants have only an arms-length relationship to their jobs. Once workers become a liability, they are out33—a reality that is a direct result of a clear policy choice.
As they expanded, at-will rules displaced a web of common-law doctrines and legal assumptions under which employment duration was a year by default, and termination before a year had to be for cause and noticed.34 When the Framers hired an employee-servant,35 for example, a common-law rule guaranteeing some measure of job security—not the at-will rule—governed that employee-servant’s employment and termination.36
Contractual default rules such as the common-law or at-will
rule are not divine or natural laws, nor are they necessary background
assumptions.37
Instead, contractual default rules are public-policy choices that do something
legally tangible in the
world.38 In the private
sector, at-will rules center organizational control with management and
immunize employers from employees’ legal claims related to termination. In the
public sector, at-will rules justify immunity from workers’ claims and provide
the benchmark for cutbacks and austerity policies. In both the private and
public sectors, at-will rules are the legal tool that the state utilizes to
immunize employers from employees’ job security.39
Over the years, courts, regulators, scholars, and workers’ advocates have sought to broaden the exceptions to the at-will rule. The introduction of a public-policy exception, good-faith and fair-dealing doctrines, and the application of the intentional infliction of emotional distress tort narrowed the scope of at-will. Further, labor laws and antidiscrimination legislation created significant substantive and procedural limitations on employers’ ability to terminate employees at will. Most recently, state legislatures introduced sectoral just-cause provisions.40
Yet, the proliferation of arbitration agreements in the private-sector labor market threatens to dismantle doctrinal limitations on the at-will rule. In other words, courts’ predictions about the diminishing importance of the at-will rule41 dissipated in the “black hole” of mandatory arbitration procedures.42 Statutory limitations, including canonical labor and antidiscrimination laws, are interpreted harmoniously with the at-will rule.43 The exceptions to the at-will rule, in their current form, are sinking islands giving way to rising at-will sea levels.44
The project of curbing the at-will rule by carving out statutory, doctrinal, and contractual exceptions is facing significant headwind. In this Essay, I develop a different approach: a constitutional claim.
In the public sector, workers’ job security, when it exists, connotes a constitutional property right in continued employment.45 Following the Supreme Court’s decisions in Board of Regents of State Colleges v. Roth46 and Cleveland Board of Education v. Loudermill,47 federal and state courts routinely recognize public employees’ property rights in their jobs.48 In one of the more neglected corners of constitutional law—public-sector personnel law—workers, their unions, and advocates claim, define, and win workers’ property entitlements in the workplace.49 Although the doctrinal development is convoluted, its basic upshot is clear: when workers are not at-will, courts recognize such workers’ constitutional property rights in their jobs.50
Three possible theories justify how job security can create workers’ property rights in a job. First, job security connotes a physical right not to be excluded from the workplace without a sufficient cause. Second, job security entails an in rem guarantee against job termination without a cause. Third, job security connotes entitlement to making legal claims in their jobs, of which contractual claims are the most straightforward examples. These three rationales elucidate why courts understand job security as producing a constitutional property right.
While the gap between the private-sector-rights desert and the public-sector doctrine is significant, the gap stems not from substantive legal principles concerning the relationship between job security and property rights but from the relative obscurity of state action in the private sector. We see claims to property rights in job security only in the public sector rather than in the private sector because constitutional-rights claims can only be brought against state actors, and state action is less obvious when the actor is a private-sector employer. Unlike public-sector workers, most private-sector workers have little chance of proving that they are not at-will and would have difficulty litigating a claim that their private-sector employers violated their constitutional property rights, as no state action is directly involved in the specific act of termination.
But state action is present even in private-sector employment. Private-sector workers can claim that the state is unconstitutionally taking their property by enacting and enforcing the at-will regime. As a sword, an at-will-as-takings claim can be used by private-sector workers to attack the prevailing at-will termination regime in forty-nine states.51 In most of the United States, workers are defined as property-less unless proven otherwise. In some states, this policy is manifested in state legislation and in others, in judge-made doctrine. Both regulatory instruments are state actions susceptible to takings claims.52
Additionally, public-sector workers can add takings claims to their existing legal arsenals, which already include property-based claims but not takings claims. Concretely, as a shield, an at-will-as-takings claim can be used to defend public-sector workers from losing job security through the expansion of the at-will rule into public-sector workplaces.53 Workers can use such a claim to push back against the privatization and precaritization of the public sector.54
Following recent Supreme Court decisions such as Cedar Point Nursery v. Hassid,55 some critics argue that the Court has gone too far in protecting property rights against the regulatory state under the Takings Clause. In this Essay, however, I claim that the current takings doctrine does not go far enough.
Scholars who caution against an aggressive takings doctrine for democratic,56 egalitarian, or worker-facing57 reasons concede the major premise that employers are the sole property owners in the workplace. These scholars perceive the existing regulatory state as the baseline from which a democratic and egalitarian polity may flourish. But this vision is as pragmatic as it is rigid.This Essay diverges from the traditional path by proposing a new articulation of labor-oriented and progressive constitutional imagination. If workers and their communities seek to countervail the autonomy, power, and deference employers enjoy in the U.S. political economy, a systematic examination of first principles is called for.
This Essay proceeds as follows: Part I introduces the doctrine of job security as creating a property right; Part II describes the at-willrule’s direct and indirect effects on workers; Part III draws the broad parameters of the at-will-as-takings sword and shield claims; and Part IV outlines some of the theoretical implications of this legal claim. A short conclusion follows.