Modifying At-Will Employment Contracts

Abstract

This Article addresses the problem of “mid-term” modification of employment—the common employer practice of introducing adverse changes in incumbent employees’ terms of employment on penalty of termination. It calls for a universal reasonable notice rule under which courts would enforce mid-term modifications only where the worker received reasonable advance notice of the change. An employer’s sudden imposition of new terms prevents employees from exercising what is often their only form of bargaining power —the ability to credibly threaten departure. Rejecting retrograde judicial approaches that turn on the presence or absence of consideration, the Article argues for a “procedural good faith” rule that directly polices the risk of coercion consistent with contemporary contract modification law. Courts should enforce mid-term modifications only where the employer provides enough advance notice to allow the employee time not only to meaningfully consider the proposed change, but also to compare and secure alternate work.