The Ethics of Employment-at-Will: An Institutional Complementarities Approach

Employment-at-will (EAW) is the legal presumption that employers and employees may terminate an employment relationship for any or no reason. Defenders of EAW have argued that it promotes autonomy and efficiency. Critics have argued that it allows for the domination, subordination, and arbitrary treatment of employees. We intervene in this debate by arguing that the case for EAW is contextual in a way that existing business ethics scholarship has not considered. In particular, we argue that the justifiability of EAW for a given jurisdiction depends on existing complementarities among the institutions that constitute the jurisdiction’s political economy. Notably, our view takes seriously the ethical concerns EAW critics have raised by showing how these concerns can be mitigated through public policy measures that do not require eliminating EAW.

Continuity

Chapter 5 describes the principle of continuity, also called the principle of “stability” or “permanence,” in Argentina, Brazil, Chile, and Uruguay. The principle presumes employment contracts of indefinite duration where employers must provide cause to terminate the contract. The chapter describes how continuity provides judges and other adjudicators with the authority to protect workers against unfair dismissal, reinforce employer obligations despite contract modification and successorship, and reform precarious contracts into standard contracts of employment. The chapter then describes the uneven and weaker presence of continuity in the United States due to employment at will. It argues that employment at will needs to be derogated by statute, likely state by state. But despite the need to derogate employment at will, the chapter also underscores that about 15 percent of the U.S. workforce, that one employed in the public sector and in the unionized private sector, is not covered by employment at will. Moreover, even under employment at will, many private sector employees are covered by antidiscrimination, antiretaliation, tort, and public policies that together concoct a law of wrongful dismissal. Hence, while weak and uneven, some form of employment stability does pervade in the United States.

Protection

Chapter 2 describes the protective principle and in dubio pro operario in Latin America, namely, in Argentina, Brazil, Chile, and Uruguay. It also describes worker protection in International Labor Organization (ILO) instruments and other international human rights texts. It then searches for the protective principle and in dubio pro operario in the United States. It argues that the protective principle can be found in the Thirteenth Amendment, the National Labor Relations Act (NLRA), and the Fair Labor Standards Act (FLSA). The Thirteenth Amendment bans involuntary servitude and mandates Congress to protect free labor. The chapter even finds something akin to in dubio pro operario in the general way that U.S. jurisprudence calls for “liberal” interpretations of statutes that derogate the common law. It further finds the protective principle in U.S. purposive methods of statutory interpretation, applied by some judges. However, those broad, purposive, worker-protective interpretations of the law have given way to more reluctant and narrow readings of the labor laws—and without good reasons. Finally, we address how employment at will narrows worker protection in the United States. While U.S. labor law has grown less labor protective, judges could reverse existing jurisprudence through the existing legal texts. Some statutory reform is, however, desirable, especially if anchored in the Thirteenth Amendment and if it derogates employment at will.

Making Capitalism with Gangsters: Unfree Labor in Shanghai's Cotton Mills, 1927–1937

It is thought that workers under capitalism enjoy the freedom of changing employment at will, but studies show that unfree labor has historically existed alongside capitalist development. One explanation for the use of unfree labor under capitalism highlights the functional needs of production. However, the baoshengong, a form of bonded labor that was used in cotton mills in Shanghai from 1927 to 1937, problematizes this approach. Though the baoshengong system was not an efficient mode of labor control, it was put in place. Rejecting the functionalist account, I show that capitalist unfree labor is not necessarily spurred by production requirements. As the Shanghai case will demonstrate, unfree labor was used when the power dynamics in the larger socio-political context outside the immediate abode of production—namely, the conflict and collaboration between different forms of domination such as gang, patriarchal, capitalist, and state powers—superseded the functional considerations of the capitalists.