An interesting study shows that employees do not perceive to be employed at will. Pauline T. Kim, Bargaining with Imperfect Information: A Study of Worker Perceptions of Legal Protection in an At-Will World, 83 Cornell L. Rev. 105 (1997). The employees in such studies were presented with several descriptions of discharges of workers, identifying the reason for each discharge, and asking whether these discharges were lawful. The result showed a tendency that employees perceive to be better protected than they actually are by the employment at will doctrine and its exceptions in the respective states. They live under the impression that termination of their employment relationship is possible only for job-related reasons, which resembles much more the for cause rule than the at will doctrine that actually governs their employment. "Workers appear to systematically overestimate the protections afforded by law, believing that they have far greater rights against unjust or arbitrary discharges than they in fact have under an at-will contract." Kim, at 106.
While it seems plausible in many areas that laymen do not know the exact legal rules due to a lack of information, this systematic misperception poses a puzzle. The goal of this blog post is to show to what extend this misperception can be explained by systematic errors and biases tied to the heuristics that employees use to evaluate the degree of their legal protection. Furthermore, I will draw conclusions on what that means for the employment at will doctrine.
In my opinion, the availability heuristic will be influential in the employee’s decision whether a particular discharge was lawful or not. Hereby, the frequency and the probability of an event are assessed by the ease with which instances or occurrences can be brought to mind. Kahneman, Daniel / Slovic, Paul / Tversky, Amos, Judgment under Uncertainty: Heuristics and Biases, Cambridge: Cambridge University Press, 1982, 11. While lawfulness is not the same as the frequency or probability of occurrence of an incident, it seems likely that these two factors will get intermingled by subjects dealing with the questions posed by the study. The average employee will not have any legal training on the doctrines of employment law. He will have to heavily rely on incidents, stories, and assumptions from inside his own sphere of experience. In doing that, the subject of the study will not only evaluate the lawfulness of the discharge in front of him (even if that is all the question is asking for). He will decide this depending on his perception of whether it is generally legally possible to be discharged for that certain trait, behavior, or incident. Not knowing the general rule, he will also include in his assessment the perceived likelihood that a discharge will actually be based on such grounds. Furthermore, he will take into account how likely this will happen to him being guided by his personal assessment of the risk of him being discharged on the several grounds.
While the availability heuristic might be very useful given the limited legal information of the employee, it also has some inherent systematical errors. Whether an incidence comes to mind is not only determined by its frequency or probability, but also by other factors such as salience and recent occurrence. Whether a reason for discharge sticks out in the memory of an employee (e.g. the person was discharged for setting the factory on fire), or whether it is not that salient (e.g. discharge for continuous underperformance) does not say much about the frequency of that reason and its lawfulness. The same is true for recent occurrence. Also the availability heuristic is prone to bias because incidents that are out of sight are also quickly out of mind. Therefore, even arbitrary but rare incidents can be less retrievable in the employees mind.
Another bias that is even more likely lead to systematic error in the employee’s judgment about his legal protection is the optimistic bias (Slovic, 20) and the tendency that people perceive the world in a way that avoids cognitive dissonance (Kahan/Braman, 188). Even if the employee can easily retrieve information about a certain discharge, he might think that it will not happen to him. Furthermore, it is troubling to live in constant awareness of the world violating your own picture of it. And people find it comforting to believe that what is good according to their own set of values is also permitted under the law. In turn, people like to think of behavior inconsistent with their values as unlawful. Employees have their own sense of what grounds they find reasonable for discharge and which reasons for discharge are arbitrary or unjust. They project that vision of a fair employment relationship into what they believe the legal rules for employment to be. This also leads to people assimilating information biased by what their view on the world is. Kahan, Dan M. / Braman, Donald, Cultural Cognition and Public Policy, 2006, 24 Yale Law & Policy Review, p. 151, 156. "Biased assimilation is the tendency to embrace evidence that supports one’s beliefs about the world and reject evidence that is inconsistent with one’s beliefs about the world." Rachlinski, Jeffrey J., The Psychology of Climate Change, 2000 U. Ill. L. Rev. 299). To maintain or increase their own personal self-esteem people often perceive the world in a way that is self-serving. Blasi, Gary /Jost, John, System Justification Theory and Research: Implications for Legal Advocacy and Social Justice, California Law Review Symposium on "Behavioral Realism and Implicit Social Cognition 2006, 15. Therefore, unjust incidents in the experience of an employee might be filtered out as exceptions to the rule and do not stick with the employees memory that much. This ties in with the availability heuristic because the information that passes the "cultural cognition filter" will be easier retrievable in the decision whether a practice is lawful or not.
One might argue that it seems natural for an employee not to project his view of the employment relationship into his beliefs about the legal system, but that he is more likely to be discontent and to exaggerate the inappropriateness of his legal protection. After all, the employee can be seen as the less powerful party in that relationship that might easily feel taken advantage off. (This is at least frequently the rhetoric of union representatives.) However, system justification theory seems to defy that argument. "People want to hold favorable attitudes about themselves and about their own groups, but they also want to hold favorable attitudes about social and political systems that affect them." Blasi, Gary /Jost, John, System Justification Theory and Research, 5. In particular, members of disadvantaged groups are prone to justify the status quo due to a stronger need to reduce dissonance by justifying their suffering and their position in the current system. Blasi, Gary /Jost, John, System Justification Theory and Research, 16.
Finally, employees might use the heuristic of representativeness also incurring systematical errors. Situations are often evaluated by the degree to which one situation resembles another situation. Kahneman, Daniel / Slovic, Paul / Tversky, Amos, Judgment under Uncertainty: Heuristics and Biases, 4. The employee might know about some legal rules that prohibit arbitrary discharges by employers, such as the anti-discrimination in employment rules in Title VII of the Civil Rights Act, the ADEA, and the ADA. These laws, being subject to much public discussion even on newspapers and TV, might also be more available and more easily retrievable to employees. Seeing some prohibitions of arbitrary behavior (e.g. unlawful discharge because of race) the employee might draw the conclusion that other arbitrary behavior (e.g. discharge because the employer does not like the employees brother) is also unlawful. Even if the discharge decisions seem similarly arbitrary, the law does not attach the same consequences to them.
The biggest distortion of the perception of the rights of employees can result from a combination of the above sources of bias. If cultural cognition leads to the predominant assimilation of information about a high level of employee rights, this information will tend to be more easily retrievable under the availability heuristic and than form the basis for comparison under the representativeness heuristic. This way only selected positive experiences, incidents or stories might be the source of evaluation of the lawfulness of the discharges presented in the study by Kim.
The conclusion that Kim draws from her study is that the assumption that employees bargain with employers in full knowledge about their rights does not reflect reality. This casts serious doubts on the argument that the prevalence of employment at will contracts in the real world represents the efficient outcome, reflecting the desires of the parties. Kim, 106, 155.
While I agree with that account, there is another conclusion one can draw from this study and its cognitive explanation behind it. One concern about the employment at will doctrine is that it is unfair and puts the employee at mercy of the employer’s arbitrariness. This will arguably result in a less motivated and therefore less productive workforce. One weakness of this argument is that market pressures constitute a check on arbitrary decisions. The economic self-interest of the employer will urge him to discharge people on economic grounds not and not for arbitrary reasons. But the study of Kim also casts some doubts on the conclusion that employment at will has a demotivating effect on the workforce. The results suggest that the employees feel a level of protection close to their desired protection even if that is not their legal status. Therefore, the employment at will doctrine might be a way to combine a content and motivated workforce with the maximum flexibility of the employer for his discharge decisions.