Arizona employers and employees have an "at-will" relationship, which means that employers are free to terminate employees without notice or reason, and employees are free to quit at any time without notice or reason. Of course, the employment-at-will relationship is subject to both parties' obligation to meet other legal requirements, including contractual duties and compliance with various federal and state harassment and discrimination laws.
In order to reduce the amount of wrongful termination and related litigation, the Arizona legislature enacted the Arizona Employment Protection Act in 1996. The Act established certain guidelines designed to clarify what constituted, or did not constit, wrongful termination under Arizona law. Prior to the enactment of the Arizona Employment Protection Act, employers faced numerous lawsuits based on alleged oral promises and implied obligations, with divergent results depending on the judge or jury. A number of those results had served to expand an employee's right to bring a lawsuit in a way that the legislature deemed unacceptable.
The Arizona Employment Protection Act contains at least four important provisions that all Arizona employers and employees should be aware of:
First, there is one-year statute of limitations for claims for breach of an employment contract or for wrongful termination. This means that such claims must be filed within one year of the termination date, significantly shortening the six-year contract limitations period that was previously applicable to some claims. Significantly, however, this limitations period does not apply to claims under the Arizona Civil Rights Act or pursuant to federal law stemming from illegal discrimination due to, among other things, race, sex, disability or age.
Second, there is an established presumption that employment relationships can be terminated at-will, and that presumption will carry the day unless there is an express written agreement stating otherwise. Typically, this will require a written contract signed by both parties, or an unequivocal guaranty described in an employee handbook or manual.
Third, the Arizona Employee Protection Act limits employees' wrongful termination claims to express breach of contract claims (described above), claims specifically allowed by Arizona statute, and "public policy" tort claims. Importantly, even these claims are limited to cases where a statute involved does not itself provide for a remedy. The tort claims involve circumstances where an employee is fired for refusing to violate the law, or blows the whistle on an employer they believe is breaking the law.
Finally, the Act expands sexual harassment claims so that certain such claims may be advanced even where federal sexual harassment laws may not apply.
At the end of the day, the Arizona Employment Protection Act creates a legal environment where it can be very difficult to successfully pursue a claim against an Arizona employer. Of course, every situation is different and the law is constantly changing, and if you believe your rights have been violated or you have been accused of wrongdoing you should speak with an experienced Arizona employment lawyer to determine what your rights and obligations are.