At-will employment describes an employment arrangement in employment agreements where an employer or an employee may terminate the relationship at any time and for any reason. It typically means that the employee is being hired for an indefinite period of time.
In at-will employment, neither the employee nor the employer are required to have a justified reason for terminating the employment relationship. Any reason at all will be considered a proper basis for termination. This includes having no reason at all, so long as the reason is not illegal, such as discrimination.
The issue with an at-will employment arrangement is that regardless of whether the employer or the employee decides to terminate the employment relationship, the other party generally has no recourse to prevent this from happening.
In addition, at-will employees are subject to their employer’s decision, which means that the employer has the right to change the terms of the employment without notice and will not face any consequences. For example, the employer has the ability to terminate an at-will employee’s benefits or to reduce their wages, and the employer cannot be penalized for these decisions.
There are, however, several exceptions to at-will terminations. It is important to note that an at-will employment arrangement is different from an employment arrangement where an employment contract exists which provides certain rights and protections to employers and employees.
One of the main rights an employment contract provides is the right to specify termination procedures, which includes requiring the employer to demonstrate just cause prior to terminating an employee. In an at-will employment arrangement, however, an employer is not required to justify a reason for terminating an employee and, as noted above, they may do so for no reason at all.
It is important to note that employers are not permitted to terminate an at-will employee for any reason which is illegal. Examples of illegal reasons for terminating an at-will employee include:
- Discrimination. An employer is not permitted to terminate an at-will employee based on their belonging to a protected class. Protected classes include:
- national origin;
- pregnancy; and,
- in some cases, sexual orientation or gender identity.
- Retaliation. An employer is not permitted to terminate an at-will employee who reports their employer for workplace violations. If an employer responds to an employee’s action of reporting them by terminating that employee, it is considered an illegal reason for termination; and
- Violation of public policy. An employer is not permitted to terminate an at-will employee in violation of public policy. For example, an employer is prohibited from firing an at-will employee because they belong to a recognized group or political party. This also includes terminating an employee due to filing a workers’ compensation claim.
At-will employment arrangements have become the most common type of employment arrangement in the United States.
What are Some of the Exceptions to At-Will Employment Termination?
As previously noted, an employer is not permitted to terminate an at-will employee for any reason that is illegal. This is known as wrongful termination.Wrongful termination is the firing of an employee which violates federal, state, or local laws, the terms of the employment agreement, or is against public policy. Exceptions to the at-will termination rule may include:
- Discrimination, including termination based on race, religion, gender, age, disability, etc.;
- Public policy exceptions, such as termination based on whistleblowing;
- Breach of good faith and fair dealing;
- Implied contract, which occurs when the employer represented to the employee that they would have certain
- protections, such as job security;
- Breach of the employment agreement;
- Violation of a company’s termination procedures; and
- Various other exceptions.
Not every state follows these exceptions. In addition, some states may also have their own additional requirements for at-will termination exceptions.
Can an Employer Fire an At-Will Employee Even If They Have Worked for Them for a Long Time?
Yes, it is possible for an employer to fire an at-will employee even if they have worked for the employer for an extended period of time. However, some of the exceptions discussed above may protect a long-time employee from termination.
For example, if an at-will employee claims there was an implied contract which promised the employee job security unless there was good cause to fire the employee, then the employee may be able to use the number of years they worked for their employer as proof of an implied contract.
What are Some of the Benefits of At-Will Employment?
There are advantages to at-will employment. One of the biggest advantages is that the employee is permitted to quit their job at any time without facing repercussions for breaking the employment contract.
At-will employment also gives an employee leverage to request a raise or promotion because the employer is aware the employee can find a job elsewhere if they do not receive their request.
Employers also benefit from at-will employment arrangements for similar reasons. They can fire an employee for any reason. They can also change the employee’s work schedule or job description without notice and without consequence.
Can an At-Will Employment Status Change?
Yes, it is possible to change at-will employment status. At-will employment is considered the default status of employment by courts in America. However, if both the employer and employee agree, an employee’s at-will status can be altered.
What States have At-Will Employment?
Every state in the U.S. has a form of at-will employment. Every employee in every state is presumed to be an at-will employee unless there is an employment contract, exception, or some form of evidence that specifies otherwise.
Forty two states recognize the public policy exception discussed above. In these states, an at-will employee can not be terminated for refusing to perform an action in violation of public policy or for performing an action which complies with public policy.
States which do not recognize the public policy exception include:
- New York; and
- Rhode Island.
Another exception to the presumption of at-will employment is the implied contract exception and the implied-in-law contract. This exception states that an at-will employee cannot be terminated if an implied contract was formed between the employer and the employee. It is important to note that the burden is on the employee to provide evidence which demonstrates that an implied employment contract was formed.
There are thirty six states which recognize the implied contract exception. Some states, however, do not. These include:
- North Carolina;
- Rhode Island;
- Texas; or
It is important to note that implied-in-law contracts are often viewed through the lens of good faith and fair dealing. Pursuant to good faith and fair dealing, an employer may not terminate an at-will employee in order to avoid their duties or obligations, such as paying a commission, paying for healthcare, or paying for retirement benefits.
Do I Need a Lawyer to Help with Issues Regarding At-Will Employment?
It is essential to have the assistance of an contract lawyer for any issues regarding at-will employment. An attorney can review your situation, determine if your rights have been violated, and file a lawsuit if necessary.
Your attorney can help you negotiate with your employer and attempt to reach a settlement agreement. Your attorney will also represent you anytime you are required to appear in court.