Even under an “at-will” contract, are employers required to conduct an investigation before firing an employee for misconduct?
Short answer: unless an employer’s policies require an internal investigation, the employer does NOT have to investigate before discharging an at-will employee.
The Alaska Supreme Court recently held that the covenant of good faith and fair dealing, an exception to the employment-at-will rule, does not require an employer to conduct an investigation before terminating an employee. The court suggested that the result would have been different if the employer’s policies required it to investigate allegations before filing an employee for misconduct. If there is no such requirement in the employer’s employee handbook, then the employer does not have such responsibility and can terminate at will.
PRACTICAL ADVISE: although these cases clarify that employees are not required to investigate before at-will employees, you are advised to investigate before making a termination decision. Furthermore, an investigation might reveal facts that support claims such as unlawful retaliation or discrimination which could be damaging to the employer. By conducting an investigation, you will be taking the best legal course of action.
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