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This means, for example, if an employee makes a

claim of sexual harassment, and the employer

investigates and determines that the behavior did not

constitute sexual harassment, the fact that the employee

made the report cannot be held against her. This means

not only that she cannot be terminated for making the

report, but also that she cannot be punished in other

ways, such as an undesirable transfer or change in

working schedule.

E. Exception: Breach of the Implied Covenant of
Good Faith and Fair Dealing

In every contract, including an employment

contract (whether oral or written), the law implies an

agreement to deal fairly and act in good faith. This

exception sounds broader than it actually is. It does not

override the concept of “at-will” employment, and it does

18| Rules of the Road