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Firing of Lebanon Co-Op Store Workers Highlights Issue of ‘At-Will’ Employment

Lebanon — When Dan King got to work at the Co-op Food Store in Lebanon at 10 a.m. on June 13 and began sweeping the floor, as was his usual routine, he had no idea what the day would bring.

Then King, who managed the wine department at the Lebanon branch of the Hanover Consumer Cooperative Society, saw co-worker John Boutin being beckoned to the office by the store manager. A few minutes later, King said, Boutin, a clerk at the cheese counter, emerged.

“With the store manager walking behind him, he came out and got his things, and walked out the front door. As soon as the store manager beckoned me, I knew something was up,” King said.

In the office were the Co-op’s director of operations, Tony White, and the professional development director, Paul Lambe.

“I knew it was not going to be good,” King said. “They told me to sit down and said to me, ‘The Co-op is exercising its right as an at-will employer to terminate you.’ I was in shock, and I asked why they were doing this, but they only repeated that statement.”

King, 56, said he was given a check for vacation pay, a check for the week he’d worked, and a severance package of one month’s pay. He also was told the company would continue his health insurance through July.

“They gave me a card of the HR person for if I had questions, and that was it. There was no handshake, no goodbye, no ‘thank you for your service,’ ” he said.

Both men had worked at the Co-op for more than 10 years, and Boutin and King had been exploring the possibility of unionization, prompting speculation that was a factor in their dismissal.

Co-op General Manager Terry Appleby has stated that Co-op managers were unaware of any union activity, but even if they had been aware, they would not have prevented employees from exercising their right to organize.

And, in fact, both Boutin and King agree on that point.

But they do believe they were fired for what they increasingly perceived as the Co-op’s emphasis on profit margins.

“I believe Terry Appleby when he said it wasn’t unionization,” King said. “But I think we were fired because we were consistently speaking up about the Co-op’s practices.”

Boutin, 61, agrees.

“If I had to guess, we were fired for advocating for employees and members,” Boutin said.

Appleby has declined to specify why the two men were fired, asserting that the Co-op is legally bound to protect employee privacy in such matters.

While their firings have generated controversy among Co-op members who feel they were unmerited and not in keeping with the nonprofit’s philosophy, what the two men experienced is possible in the vast majority of U.S. workplaces.

Defining ‘At-Will’

In the United States, the relationship between employer and employee is presumed to be “at-will.” According to Michelle Small, who works in the inspection division at the New Hampshire Department of Labor, employment at will is pretty simple.

“Employers can hire and fire without cause, and employees can quit at will,” Small said.

A clause in the Co-op employee handbook states, “Employment is ‘at will,’ which means that either the Co-op or an employee can terminate the employment relationship at any time for any reason not prohibited by law.”

Joan Vogel, a professor at Vermont Law School, said many people believe that employers must have just cause to fire their employees.

“When I teach my students about labor law, I ask how many know that their jobs are ‘at will,’ ” Vogel said. “Few of them know that they could be dismissed for no reason.”

There are some protections against termination. Under federal law, an employee cannot be fired based on race, religion, sex, national origin, age or disability. The National Labor Relations Act also protects employees from being fired for engaging in union activity.

According to Karen Richards, the executive director of the Vermont Commission for Human Rights, Vermont state law also protects people from being fired based on sexual orientation, gender identity, place of birth and ancestry. Vermont also makes it illegal to discriminate based on credit history or for having made a worker’s compensation claim.

In New Hampshire, a Whistleblowers’ Protection Act provides an additional exception to at-will employment, protecting workers who report their employers’ illegal activity or refuse to participate in such activity.

Not all employees are at-will. Employers of unionized workers must have just cause to fire an employee, but that only applies to a small percentage of the U.S. workforce. According to the Bureau of Labor Statistics, unionized workers made up 11.3 percent of the workforce in 2013. Public sector employees have civil service protections, which include “just cause” protections. And some employers voluntarily include just cause as a provision of their contracts with their employees.

Business Perspective

Employers say that being able to fire employees without an explanation is beneficial for business.

“It gives employers the flexibility to adjust their workforce as necessary,” David Juvet, senior vice president at the Business and Industry Association in New Hampshire, said. “There are numerous attempts in the Legislature to chip away at at-will employment. But for most, if not all, of those proposals, we don’t believe they would be beneficial for employers or for the New Hampshire economy.”

Richard Chapman, a part-time Norwich resident, ran a community bank in Massachusetts for 35 years. He has had experience firing employees, and thinks that at-will employment is appropriate.

“I think at-will employment is a good thing, as long as it’s within the context of performance review and transparency about what you expect from (employees),” Chapman said. “People get feedback about the kind of job they’re doing, so they know where they stand and they know where they need to improve. At a certain point, management should have the freedom to manage. People who are not performing to expectations should be terminated.”

In the Co-op controversy, Chapman said he believes the management of the Co-op had every right to terminate King and Boutin.

Vogel, on the other hand, thinks that at-will employment concentrates too much power in the hands of management. The law doesn’t require just cause to terminate someone, but that doesn’t mean that the Co-op shouldn’t hold itself to a higher standard, Vogel said.

“Everyone talks about how efficient ‘at-will’ is,” Vogel said. “But that’s only looking at it from one side. It may be efficient for one side, but it’s devastating to the other side, particularly when someone is fired for inappropriate reasons. There aren’t many exceptions to at-will employment. If those exceptions don’t apply, then you can fire someone for any or no reason. That’s no protection at all.”

King, after having been terminated at-will, agrees with her.

“I disagree with at-will employment,” he said. “I think it’s an aggressive policy that clearly favors employers. It’s very rare that someone walks out of a job without thinking things through. Most people can’t afford to leave their jobs. But the employer, on the other hand, can fire employees for whatever reason.”

Passing Evaluations

King said he regularly scored well in twice-yearly performance reviews.

“I’ve always received positive evaluations,” King said. “The answers were ‘meets’ or ‘exceeds’ on every question.”

Boutin went back to the Co-op to get his employee file after his termination.

“All of my reviews were superlative,” Boutin said. “The only thing I was ever written up for was not doing my inventory correctly five years ago.”

But both Boutin and King had been dissatisfied with many of the Co-op’s practices for some time.

“The last five years, it’s been all about trying to get the customer to buy as much as possible, and as many high-margin items as possible,” he said. “That doesn’t sound like a co-op to me. I see the Co-op as a place that everyone can afford, but if you’re selling the fancy cheeses and wines and truffles, you’re primarily selling to the rich. You’re not serving the members who have a family to feed.”

Appleby objected to this interpretation of the Co-op’s sales.

“Our market, just like the markets across the country, is moving according to consumer taste, but we’re not pushing people to buy higher margin things,” Appleby said. “We’re responding to what consumers are buying.”

Boutin also said he believes the fact that he raised concerns about the work atmosphere in some departments was also a factor in his firing.

Appleby said in an interview that the Co-op would not discuss the reasons behind King and Boutin’s terminations in order to protect the employees’ privacy.

“That does not mean we have nothing to say, but, rather, there is nothing we can legally say,” he wrote in a recent op-ed in the Valley News.

Linda Johnson, a labor law attorney at the McLane, Graf, Raulerson & Middleton law firm in Manchester, said that Co-op managers were right to decline to discuss publicly the circumstances surrounding the employees’ dismissal.

“An employer should not discuss the termination of an employee,” Johnson said. “There are case laws referring to an employee’s right to privacy.”

King and Boutin have also said that employees were discouraged from talking about their wages with each other. King was making $21.30 an hour at the time of his termination, while Boutin was making $15.66 an hour.

“They would say, ‘It’s your business and no one else’s. Worry about your own pay,’” King said of Co-op management.

“I can’t remember the exact words, but we are told not to talk about what we’re paid,” Boutin said. “That’s definitely a policy of the Co-op. It’s well known.”

Appleby said he was unclear on what basis Boutin was making such claims.

Employee Protections

According to a press release from the National Labor Relations Board, the Labor Relations Act “protects the rights of employees to engage in ‘concerted activity’, which is when two or more employees take action for their mutual aid or protection regarding terms and conditions of employment.”

This includes open discussion of wages and work-related issues such as safety.

When Vogel, the VLS professor, was informed that the employees believed they were fired for criticizing the Co-op, she said that an argument could be made that under section 7, the termination of King and Boutin was illegal.

“You could argue that they were discussing issues of mutual concern, and as long as they were not being disruptive, it could be illegal to fire them for that,” Vogel said.

While that section of the Labor Relations Act does not explicitly prohibit employers from placing restrictions on their employees regarding discussion of wages, Vogel said, it is implicit in the law.

“How can you organize if you can’t talk about the most critical conditions of work — your pay?” Vogel said. “Pay equity is one of those issues that often gets workers to organize. When people are paid differently, there often isn’t justification for pay differences.”

Boutin and King have been exploring the possibility of hiring a lawyer to contest their firings.

“We ... have an awful lot of offers,” Boutin said. “But we have not retained counsel. More than anything, I just want there to be transparency on the Co-op, and there is not.”

In the wake of the firings and the surrounding controversy, the Co-op board plans to address member concerns. Plainfield resident Margaret Drye, president of the Co-op board, said that the board will begin reconsidering at-will employment at its July 23 meeting.

“It seems that in some cases, (at-will employment) does not look as transparent or reflect the spirit of the Co-op, and we want to re-examine it,” Drye said. “Our commitment is to examine it and examine it soon. It’s on our radar. It won’t be changed on July 23, but we will set up the process to examine it.”

Drye added that the board will take member input at the meeting, to be held at 4:30 p.m. on Wednesday in Hanover, into consideration.

Co-op officials have moved the meeting to the Hanover High School auditorium in case of high turnout.

“We’re not rushing to do this without thought,” Drye said. “We want to examine this closely. There’s information that the board needs, before we make a decision.”

Lauren Bender can be reached at lbender@vnews.com or 603-727-3211.