Historically in Maine and elsewhere, the common-law rule that regulates the relationship between employers and employees is the employment-at-will doctrine.  Under that doctrine, the employee may leave for any reason and employers may discharge an employee for any reason, unless the reason is illegal.  The most obvious examples of an illegal termination are where an employee is terminated as a result of race, sex or age discrimination. 
In Taliento v. Portland West Neighborhood Planning Council, 705 A.2d 696 (Me. 1997), the Law Court expressed support for the rule that a contract for employment for an indefinite length of time is terminable at the will of either party.  The primary exception to the employer's common law right to discharge an employee at will is a contract that "expressly restrict[s] [such a right] and clearly limit[s] the employer to the enumerated method or methods of terminating the employment." Bard v. Bath Iron Works Corp., 590 A.2d 152, 155 (Me. 1991).  For employers with a unionized workforce, such restrictions are normally found within collective bargaining agreements. 
During the most recent legislative session, the Maine Legislature considered a bill that would have dramatically altered the common law-rule.  The original version of LD 2147, An Act to Ensure Just Cause Termination in Employment, would have required that covered employees be terminated only for “just cause.”  “Termination” was broadly defined to include dismissal, position elimination, suspension for more than two months and constructive discharge.  A termination would have been valid under the bill only if it was for violation of a rule or order that was related to the orderly, efficient and safe operation of the employer’s business and applied without discrimination in an even-handed and consistent manner.  Further, “just cause” for a termination would not exist unless the penalty of termination was reasonably related to the seriousness of the rule violation. 

As would be expected when facing significantly increased prospects for litigation over every job termination, Maine businesses and interest groups vehemently opposed passage of the bill. Nevertheless, there was support for legislating an end to the employment-at-will doctrine.  When it became clear that the original version of LD 2147 would not be reported out of the Labor Committee with an “Ought to Pass” designation, Labor Committee members seeking to modify the common-law rule scaled-back the bill and renamed it in hopes of garnering additional support for its initiative. 

The Labor Committee gave LD 2147 a new title:  An Act to Provide Notice of Termination Status. The new version of the bill required employers to provide written notice to employees detailing the circumstances under which employees could be terminated.  The bill gave the employer three options from which to designate the method of termination: (1) for any reason not prohibited by law (employment-at-will); (2) as provided in the collective bargaining agreement or other contract; or (3) for cause, as provided in the employee handbook.  The bill would have required employers to post a copy of the law, and would have imposed significant penalties on an employer that failed to provide the notice outlined above.  Thus, if an employer terminated an employee who had not been provided the requisite notice, or if the termination was inconsistent with the terms of an employee handbook, the action would constitute an “improper termination.”  An employee could then file suit in Superior Court and seek reinstatement and back pay. 

In some respects, the amended bill contained even more flaws than the original version.  For example, the consequence of a failure to provide notice was that “an employer may not terminate” the employee.  Thus, the bill appeared to preclude termination of an employee who was not provided notice, even if the employee actually committed acts that are almost universally recognized as grounds for termination, such as fraud or illegal conduct.  Presumably, an employer could be forced to defend such a termination in Superior Court --  an expensive and time consuming exercise.

Although a majority of the Labor Committee clearly wanted to pass something to limit the employment-at-will rule in Maine, the amended bill failed as House members received comments that were sharply critical of the proposed legislative scheme.  In addition, it became apparent that LD 2147 was lacking a demonstrated public need at a time when employers are doing everything possible to attract and retain good employees.  The bill was indefinitely postponed in the House and Senate, which effectively eliminated the possibility that a bill for just cause employment would pass, at least during the current Legislative session.

However, Maine probably has not seen the end of the movement to limit the employment-at-will rule.  A majority of states have limited the application of the rule in some manner and Justice Lipez, while sitting on the Maine Supreme Court and considering the Taliento decision, issued a strong and well-reasoned dissent. Justice Lipez, now a Judge with the First Circuit Court of Appeals, argued the facts in Taliento presented an opportunity to revisit whether an employee handbook or personnel policy that defines a method of discharge can be enforced.  Some legislators have seized upon that notion and it is certainly possible for the Law Court to reexamine its decisions in this area if presented with the right set of facts. 
Employers should have employee handbooks or personnel policies examined to make sure the statements within comport with the current state of the law and to guard against creating a binding contract where that is not intended.  Employers also should pay close attention to this issue in future legislative sessions as it will most likely reappear in some form.  Any change to the current law would require employers to revisit policies and procedures with respect to the termination of employees and could dramatically change the employer-employee relationship.