Kentucky

I Overview

Kentucky has adopted the at-will employment doctrine, which provides that an employee who has an employment contract with no express conditions or a definite term may leave or be terminated at any time for good cause (not prohibited by law), for no cause, or for a cause that some might view as morally indefensible.1 This chapter will discuss Kentucky law on the following topics:

  • The requirement of an indefinite term to qualify as an at-will employment relationship;
  • Exceptions to the at-will doctrine, including oral modifications, implied contracts, and employee handbook exceptions;
  • The recognition of a common law tort for wrongful discharge;
  • The lack of recognition of an implied covenant of good faith and fair dealing in at-will employment relationships;
  • The ability of disclaimer provisions in the contract to create an at-will employment relationship;
  • The damages awarded for a claim of wrongful discharge;
  • Related torts, including fraud, defamation, and intentional infliction of emotional distress;
  • Statutes that prohibit termination of at-will employees; and
  • A discussion of whether retaliatory conduct in a protected area of the relationship is actionable when the employee is not terminated.

II Employment Contract

The Kentucky courts have recognized the importance of whether or not the parties in the employment relationship have agreed to a definite term. If the term is indefinite, the employment may be terminated by either party at will.2 On the other hand, an employee hired for a definite term may not be terminated without just cause.3 In determining whether or not there is a definite term, the courts look at the negotiations between the parties and the actual offer by the employer. The courts of Kentucky have held that the following employment contracts have definite terms:

  • The employer sent a letter to the employee stating the annual salary, including a bonus, and a starting date.4
  • The employee made a verbal offer of employment; confirmed the offer in a letter, which reasonably inferred a 13-month employment; and the employer paid moving expenses as consideration for the contract.5

The Kentucky courts have recognized that the following employment contracts are for indefinite terms and can be terminable at will:

  • The term in the employment contract was labeled " permanent."6
  • The term in the employment contract stated there would be " employment as long as the employee does honest or faithful work."7
  • The term in the employment contract stated there would be " employment as long as he performs his duties in a successful or satisfactory manner."8

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Footnotes

1 Wymer v. JH Props., Inc., 50 S.W.3d 195 , 198 (Ky. 2001) (citations omitted).

2 Shah v. American Synthetic Rubber Corp., 655 S.W.2d 489 , 491 (Ky. 1983).

3 See Otis & Co. v. Power, 1 Ky. Op. 312 (Ky. 1866).

4 Putnam v. Producers' Live Stock Mktg. Ass'n, 75 S.W.2d 1075 , 1078 (Ky. 1934).

5 Hunter v. Wehr Constructors, Inc., 875 S.W.2d 899 , 901 (Ky. Ct. App. 1993).

6 Shah , 655 S.W.2d at 491 .

7 Id.

8 Id.

Published in Bloomberg BNA, Employment at Will: A State-by-State Survey, 2nd Edition

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