The Evolution of Unjust-Dismissal Legislation in the United States

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Abstract
In the past decade, many state courts have ruled in favor of employees alleging they were improperly dismissed. The author of this paper advances an evolutionary theory of unjust-dismissal legislation in which employer groups, responding to the threat of large and variable damage awards imposed by the judicial system, eventually support unjust-dismissal legislation in order to clearly define property rights, reduce uncertainty, and limit employer liability. Based on evidence from a case study of legislation enacted in Montana and an empirical analysis of the determinants of proposed unjust-dismissal legislation in a panel of states, the author concludes that proposals of unjust-dismissal legislation are a response to court rulings that weaken and obfuscate the employer's right to dismiss employees at will.

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