It’s been ten days since my previous post, but it feels a lot longer—please excuse my silence. It was caused by a combination of travel, short-deadline work, and a perfect storm of technology issues: Hacked website! Viruses! Hardware malfunction! There’s nothing like spending hours on the phone with distant technicians of varying competence to take it out of one.
To get back into the swing of things, I’ll now consider a particularly interesting usage—for any reason or for no reason.
As Used to Express At-Will Employment
I associate for any reason or for no reason primarily with language used to express the notion of at-will employment. If you’re an at-will employee, that means that your employer can fire you whenever they want. Click here for Nolo’s explanation of at-will employment.
To get a better grasp of how to articulate the notion of at-will employment in a contract, I contacted Dan Schwartz, litigator, blogger at the Connecticut Employment Law Blog, and Legal Rebel to boot.
I first asked Dan in what circumstances you would want to specify in a contract that an employee is an at-will employee. Dan explained that even if an employee is an at-will employee, you may well want to have them enter into a contract governing matters such as confidentiality, severance, and ownership of intellectual property, and that it would make sense also to address employment status in any such contract.
But why not simply say “During the Employee’s employment by Acme, the Employee will be an at-will employee”? Dan said that at-will employement is a legal concept, and you can’t expect any given employee to know what it means. That’s why Dan supplements such language by having a contract state that the employer can terminate the employee for any reason or for no reason. (He also sees for cause or for no cause used to the same end.)
Now that I better understand the context, here’s my take on for any reason or for no reason. First off, or for no reason is illogical, in that no one acts for no reason. Every action is prompted by something—if you want true randomness, the only place you’ll find it is in quantum physics. If Acme fires Roe, it may be because Roe has proved himself to be ineffectual; because Roe behaved inappropriately at the Christmas party; because Acme’s CEO wants to hire his cousin instead; because Acme’s CEO doesn’t like Roe’s hairstyle; because Acme’s CEO is a raging misanthrope. Each of those constitutes a reason for firing Roe. Reason doesn’t imply rational thought—there are good reasons and bad reasons.
I suspect that what or any reason is intended to articulate is the notion that Acme doesn’t have to explain itself. I’d say as much.
Another issue is that you cannot in fact terminate an employee for any reason. In particular, statutes make it illegal in the U.S. to terminate an employee because of their race, religion, or gender. If I wanted to be as clear as possible in drafting my at-will language, I’d refer to such limits.
Taking into account the above points, here’s what my proposed at-will language looks like:
During the Employee’s employement with Acme, the Employee will be an at-will employee. That means that Acme may terminate the Employee at any time and for any reason, except as provided by law, and Acme will not be required to explain why it terminated the Employee.
Perhaps Dan Schwartz will let us know what he makes of this language.
As Used in Other Language of Discretion
You also see for any reason or for no reason used in other kinds of language of discretion. The following examples are from “material contracts” filed on the SEC’s EDGAR system:
Buyer shall have until February 26, 2010 to waive or elect not to waive the Remaining Due Diligence Contingencies (for any reason or for no reason), by delivery of written notice to Seller.
In the event that the Commencement shall not have occurred, the Company shall have the option to terminate this Agreement for any reason or for no reason without any liability whatsoever of any party to any other party under this Agreement.
My observations regarding for any reason or for no reason in the context of at-will employment apply equally here, but I have a bigger concern.
MSCD 2.111–126 discusses how using at its discretion as a means of giving a party unfettered discretion risks falling foul of the implied duty of good faith. (An earlier version of that discussion is contained in this December 2006 blog post.) One could argue that for any reason or for no reason articulates unfettered discretion more clearly than does at its discretion. And there’s some support for that notion. For example, in Tymshare, Inc. v. Covell, 727 F.2d 1145 (D.C. Cir. 1984), then Circuit Judge Scalia said that the phrase at its sole discretion “is not necessarily the equivalent of ‘for any reason whatsoever, no matter how arbitrary or unreasonable.'”
But I think you still face the same issue—can you contract around the implied duty of good faith? That issue doesn’t arise with at-will employment, as that’s one context where the implied duty of good faith doesn’t apply.
As Used in Conditional Clauses
The only place you find for any reason or for no reason outside of language of discretion is in conditional clauses. In this context the phrase constitutes needless elaboration—nothing is gained by articulating subsets of the circumstances in question. (See this November 2007 blog post for more on needless elaboration.)
Here’s an exmple from EDGAR:
If by the Maturity Date for any reason or for no reason the full Available Amount under this Agreement has not been purchased as provided for in Section 2 of this Agreement, …
13 thoughts on ““For Any Reason or for No Reason””
The problem I could see with just using "for any reason" and taking out "no reason" is if the employer acts unreasonably. The Merriam-Webster definition of unreasonable is "not governed by or acting according to reason", so the notion that everyone acts with a reason might not cover a termination of employment that was arbitrary, capricious or unreasonable.
Ken: Interesting post. I've put up a response on my blog — it's too much to just comment here!http://bit.ly/cTBhKU
Dan: The main point I take away from your post is that you're OK with my dropping "or for no reason." But I'll be pondering that further. @3NT's comment above suggests that my logic will encounter resistance, so it may be that strategic retreat on "or for no reason" is the best course. Watch this space! Ken
Yes, I think the "no reason" language tends to be a bit overdone and doesn't add much if any significance. if a court finds an "at-will" relationship, it can use that as part of the legal decision. I think the law would provide that an employer can act for "any reason" if that reason ends up being "unreasonable". It's still a reason.
But I also may need to look back at my logic books from college to get a refresher.
I used to be of the view that if the "or no reason" phrase wasn't there, then a fired-employee-plaintiff's lawyer might well demand to know what the reason was (in discovery or otherwise), and if the company refused, the lawyer could start making noises about cover-ups. Ken's "no explanation is required" language seems like a cleaner way of addressing that concern.
As a practical matter, of course, if the employee were to make out a prima facie case of unlawful termination (e.g., discrimination, retaliation, etc.), then the company would want to come forward with a legitimate reason. So it might be a waste of time in the first instance to worry about being able to resist demands to know the reason.
I think the problem with using "for any reason" alone is that it implies stating that reason. ("Yeah, we took X action for a reason, but we're not telling you why.") In the real world this only provides fodder for lawsuits or further disputes. As I see it, the issue is desiring not provide justification for a decision.
This debate seems to relate, in part, to US law and judicial interpretation rather than the natural meaning of words. I am not familiar with "any reason / no reason" in contracts. From an English law perspective (where good faith is a less developed concept in contracts) I would probably use "at its discretion" or if I felt belt and braces (suspenders) were needed, "at its sole and absolute discretion" (your interesting choice of the phrase "unfettered discretion" in your posting is similar). Using the word reason seems to invite the opponent to say, well what was the reason? But if reason is to be the lever, then I like your rewrite.
Mark: I see this discussion as relating entirely to how best to express the notion of at-will employment in everyday English.
And it's again clear that we have very different views as to how to articulate meaning clearly. You'll see from the post I link to that I'm no fan of "at its discretion," and that I don't buy into the notion of "at its sole discretion" and "at its sole and absolute discretion" representing gradations of meaning.
But it wouldn't be any fun if we agreed on everything.
I have a different take on the "or no reason." I think the issue is that you still have to define what "any reason" means. But that opens up the argument that, in a written contract, there is still an obligation of good faith and fair dealing. In most jurisdictions, I think this remains an interpretive principle, not an actual obligation. But, in either case, a "reason" like "I just don't like you" isn't really consistent with good faith and fair dealing, either as an obligation or as a method of interpreting what "any reason" means.
So, I think that the "or for no reason" attempts to make it clear that the employer's decision cannot be contested based on what the reason is. I think it's essentially the equivalent of "in its discretion" types of language. And on that point, seehttps://www.adamsdrafting.com/2006/12/11/at-its-di…
Finally, I'd note that sometimes the employer does have a legal obligation to give the reason for termination, even if employment is at-will. For example, if you terminate an employee because a consumer report indicates that he's a convicted sex offender, you have to tell him that's the reason (twice, in fact) to avoid violating the Fair Credit Reporting Act.
Chris: I think that in everyday English, the meaning of "any reason" is clear.
Regarding the implied duty of good faith, it doesn't apply to at-will employment.
Regarding "in its discretion," you'll see from my post that I think that's an unhelpful and risky usage.
And yes, an employer's freedom in the context of at-will employment is constrained by statute, as I mentioned in my post. Your sex-offender point is an interesting detail.
I think the problem with using “for any reason” alone is that it implies stating that reason. (“Yeah, we took X action for a reason, but we’re not telling you why.”) In the real world this only provides fodder for lawsuits or further disputes. As I see it, the issue is desiring not provide justification for a decision.
"For any reason not prohibited by statute or public policy" is the basic rule of at will employment now, but this language fails miserably in an employment agreement. The employer places an at will phrase in agreements in large part to discourage terminated employees from coming after the company for wrongful termination. The phrase "for any reason not prohibited by statute" pretty much invites a terminated employee to start looking for reasons to sue. Which raises a new question. Like many contractual relationships, employment relationships are almost never arms length. Certain subcontracting and licensing agreements also come to mind. Dare I ask, does it make sense in certain situations for the more powerful drafting party to opt for intimidating prose rather than clarity because that's a primary purpose of the language?