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An empirical assessment of employment‐at‐will: a tale of two states

An empirical assessment of employment‐at‐will: a tale of two states The market’s reactions to six decisions that dealt with the employment‐at‐will doctrine were examined with event study methodology. Three hypotheses were tested, all three of which were supported clearly by the data. Shareholder returns to a sample of California firms fell in response to the three California decisions that provided at‐will employees with causes of action to challenge their discharges; returns to those same firms rose in response to the Foley decision, which cut back on the employment‐at‐will erosions in California; and, returns to a sample of firms in New York rose in response to the two decisions from New York that affirmed the supremacy of the employment‐at‐will doctrine in New York. These results support the view that employment‐at‐will is beneficial for employers and that erosions to that doctrine are costly to employers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Managerial Law Emerald Publishing

An empirical assessment of employment‐at‐will: a tale of two states

Managerial Law , Volume 46 (6): 17 – Dec 1, 2004

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References (7)

Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
0309-0558
DOI
10.1108/03090550410771026
Publisher site
See Article on Publisher Site

Abstract

The market’s reactions to six decisions that dealt with the employment‐at‐will doctrine were examined with event study methodology. Three hypotheses were tested, all three of which were supported clearly by the data. Shareholder returns to a sample of California firms fell in response to the three California decisions that provided at‐will employees with causes of action to challenge their discharges; returns to those same firms rose in response to the Foley decision, which cut back on the employment‐at‐will erosions in California; and, returns to a sample of firms in New York rose in response to the two decisions from New York that affirmed the supremacy of the employment‐at‐will doctrine in New York. These results support the view that employment‐at‐will is beneficial for employers and that erosions to that doctrine are costly to employers.

Journal

Managerial LawEmerald Publishing

Published: Dec 1, 2004

Keywords: Stock market; Shareholders; United States of America

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