At-will employment is a term used in employment agreements to describe the employment status of an employee. Specifically, it means that the employee is being hired for an indefinite amount of time, and that their employer has the right to terminate them at any time without cause. This can be for any or no reason. Alternatively, it also means that the employee has the right to terminate their own employment at any time, for any or no reason, without facing consequences for doing so.
Simply put, neither the employer nor the employee need a justified reason for terminating the employment relationship. Any reason will be considered a proper basis for termination, including having no reason at all, so long as it is not illegal such as discrimination.
The issue with at-will employment is that regardless of whether it is the employee or employer
who decides to terminate the employment relationship, the other party has no way to prevent it from happening. Additionally, at-will employees are subject to an employer’s decisions, meaning that the employer can change the terms of their employment without notice and will not face any consequences for doing so.
An example of this would be how an employer can terminate an at-will employee’s benefits or reduce their wages for no reason, and cannot be penalized for making these decisions.
What Are Some Exceptions To At-Will Employment Termination?
As previously mentioned, an employer may not terminate an at-will employee for reasons that are considered to be illegal. This is referred to as wrongful termination, which is any firing of an employee that violates:
- Federal, state, or local laws;
- The terms of an employment agreement; or
- Is against public policy.
Some of the most common examples of exceptions to at-will employment termination include:
- Discrimination, which is 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, such as when the employer represented to the employee that they would have certain protections, such as job security;
- Breach of the employment agreement; and
- Violation of a company’s termination procedures.
It is important to note that not all states follow the above exceptions, while other states may have their own additional requirements for at-will termination exceptions.
Are Employee Handbooks Enforceable? How Does An Employee Handbook Affect The Right To Terminate At-Will Employees?
An employee handbook is a collection of information provided to each employee. This book provides information regarding company rules and policies, as well as benefits. Employee handbooks are also used as a way to protect the employer against certain claims, such as unfair treatment claims.
Unless the text of an employee handbook clearly indicates otherwise, an employee handbook can be considered a legally binding document between an employer and their employees. What this means is that an employee can sue an employer if the employer fails to honor any of the provisions contained within the employee handbook. Generally speaking, courts consider an employee handbook to be an extension of the employee contract.
As previously mentioned, most employees are hired at will so that either party can terminate the employment contract for any reason, with few exceptions. However, if the employee handbook contains any specific termination procedures, the employer could be forced to adhere to those procedures prior to firing any employees who have provided their signature as acceptance of the employee handbook provisions.
What Termination Procedures Should Employers Be Aware Of?
If an employer wishes to terminate an employee without adhering to employee handbook procedures, they should be aware of any provisions that would limit an employee’s at-will employment status. Some examples of this include, but may not be limited to:
- Disciplinary procedures that require warnings or suspensions before the employee will be fired;
- Lists which detail legitimate grounds, or any other valid causes for termination;
- Codes of conduct which detail both acceptable and unacceptable activity;
- An appeals process which an employee may use to challenge any disciplinary action;
- Anything that would prevent an employer from firing an employee immediately; and/or
- Anything that governs the voluntary termination process.
What Is Voluntary Termination? Are There Any Legal Issues Associated With Voluntary Termination?
In an employment context, voluntary termination refers to when an employee suddenly decides to leave the company or business organization. This is more commonly referred to as a resignation, which is allowable in an at-will employment situation. Generally speaking, an employer will require workers to give at least two weeks notice if they are seeking voluntary termination.
For some organizations, voluntary termination may require longer periods of notice. An example of this would be how for an executive-level employee, the company may require 30 days notice. Such requirements and other factors associated with a voluntary termination may be detailed in an employment contract or employee handbook.
Some reasons for voluntary termination include:
- A change of residence;
- A new job with a different company;
- Various personal issues; and
- Medical and/or health issues.
Voluntary termination generally goes smoothly if there are not any significant issues associated with the employer or the employee. However, there are some notable legal issues that can sometimes arise.
One of the biggest issues is the concept of constructive discharge. This is where an employee is subject to harassment or discrimination and feels that they have no choice but to resign in order to stop being subjected to the negative conduct. These cases frequently require an internal investigation, especially if the employee has filed an internal complaint and did not receive an appropriate remedy from within the company. Constructive discharge claims are similar to wrongful termination cases.
Another common issue is when an employee has possession of sensitive or confidential information, which actually belongs to the company. In such cases, they may be required to sign a non-disclosure agreement or similar agreement when submitting their voluntary termination.
What Else Should I Know About At-Will Employment?
There are some notable advantages to at-will employment. According to the general terms of an at-will employment agreement, an employee is allowed to quit their job at any time without facing repercussions for breaking their employment contract. At-will employment also gives an employee leverage to request a promotion or raise, due to the fact that the employer knows that they can quit and go elsewhere if they do not receive what they need.
Alternatively, an employer also benefits from an at-will employment agreement for similar reasons. As previously mentioned, they can fire an at-will employee for nearly any reason. Additionally, they can change the employee’s job description or work schedule without providing notice, and without the fear of facing any legal consequences for doing so.
Although at-will employment is legally considered to be the default status of employment by American courts, an at-will employee’s status can be altered if both the employer and the employee agree to such a change in a legal contract.
Do I Need An Attorney For Issues With Employee Handbooks And At Will Employment?
If you are experiencing any issues associated with your workplace, especially how an employee handbook affects at-will employment, you should consult with an experienced and local wrongful termination attorney. Whether you are the employee or the employer, a local lawyer can help determine what your rights and obligations are according to your state’s specific laws. Additionally, an attorney will also be able to represent you in court, as needed.