Texas case law is clear. Employment is at will, terminable at any time by either party, with or without cause, absent an express agreement to the contrary. Fed. Exp. Corp. v. Dutschmann, 846 S.W.2d 282, 283 (Tex. 1993). This means that unless there is an agreement limiting an employer’s right to terminate, an employer in Texas can fire an employee for good reason, bad reason, or no reason at all, provided that the employer is not violating a specific statutory or common law exception to the at-will employment doctrine. The statutory exceptions are the federal statutes and state law equivalents that protect against discrimination and retaliation. In Texas, there is only one common law exception, and it is that an employer cannot fire an employee because the employee refuses to engage in an illegal act.
But what about handbooks and offer letters? The Dallas Court of Appeals issued an opinion this week discussing the interplay between the employment at-will doctrine and contradictory statements in the employer’s handbook and disability policies. The opinion makes it clear that if an employer has a handbook, the employer needs to make sure that the handbook contains a disclaimer that negates any implication that a personnel-procedures manual places any restrictions on the employment-at-will relationship.
If you are interested in maintaining the employment at-will relationship, and you have a set of employment policies and procedures, then it makes sense to bundle them up into a single handbook, bound with a disclaimer that nothing in the handbook alters or restricts the employment at-will doctrine. If you already have a handbook, then you need to review the handbook to make sure that the handbook contains the same disclaimer. Finally, when you draft an offer letter or memorandum of employment, you need to include language in the letter or memorandum that nothing in the letter or memorandum is intended to modify the employment at-will relationship.