Norms, Learning and Law: Exploring the Influences on Workers' Legal Knowledge
Posted: 18 May 1998
Date Written: June 1998
An initial survey of workers in Missouri documented widespread misunderstanding of the default rule of employment at will. This paper presents additional data, collected in New York and California, confirming previous findings that workers consistently overestimate their legal rights, erroneously believing that the law affords them protection akin to a just cause contract, when in fact they can be dismissed at will.
The patterns of responses by workers in each of the three states are remarkably similar, despite wide variations in the states' laws. Although the three states differ significantly as to what situations fit the public policy exception to the at-will rule, and what circumstances are sufficient to overcome the at-will presumption, the state-by state variations in responses to the survey questions do not appear to correlate with these variations in state law. Multivariate regression analyses further suggest that experiential factors such as past union representation, responsibility for hiring and firing of other employees, the experience of being fired oneself and length of workforce experience do not significantly affect the accuracy of workers' perceptions of their legal protections.
Contrary to the predictions of a rational actor model, these findings suggest that workers' erroneous beliefs about the law are not influenced by variations in state law and are resistent to change through experience. This paper advances the theory that worker confusion of norms and law best explains the pattern of responses observed in this study. Drawing on theories of the internal labor market, it describes how common employer practices and policies for governing internal employment patterns might give rise to a fairness norm forbidding employee discharges without cause. The results of this study suggest that such a fairness norm strongly shapes worker expectations of their legal rights, overshadowing most demographic and experiential factors in their influence on those expectations. Thus, it appears that workers do not readily distinguish between informal norms and enforceable legal rights, between what they believe the law should be, and what it actually is.
JEL Classification: K31
Suggested Citation: Suggested Citation