Professional Construction of Law: The Inflated Threat of Wrongful Discharge

Abstract

Institutional theories of organizational behavior consistently implicate the professions in explaining the diffusion of new organizational practices; yet there has been little empirical study of precisely what role the professions play. We address that issue by exploring the role of the personnel and legal professions in shaping employers' understandings of law and the threat posed by law. We focus on the implied contract theory of wrongful discharge, a recent common law development that allows employees—under a limited set of circumstances—to sue their employers when they are fired without good cause. We first present an analysis of the actual risk posed by the implied contract theory, based on a survey of published cases in six states. Then, by analyzing articles in professional personnel and law journals, we reveal a striking disparity between the actual threat posed by implied contract theory and the threat as constructed by personnel and legal professionals. Our findings support the argument that the professions play an important role in the diffusion of organizational practices and suggest that the professions' constructions of the environment may critically affect how employers respond to environmental threats.