Understanding At-Will Employment: What It Means for Employers and Employees

At-will employment is a fundamental concept in U.S. employment law that impacts both employers and employees. Whether you’re a business owner or a worker, understanding the rights and limitations of at-will employment is essential. In this post, we’ll break down what at-will employment means, its exceptions, and what both employers and employees should keep in mind.

What Is At-Will Employment?

At-will employment means that an employer can terminate an employee at any time, for any reason (or no reason at all), as long as the reason is not illegal. Likewise, employees have the right to leave a job at any time, without providing a reason or notice.

This doctrine provides flexibility for both parties but also comes with certain risks. Employers can adjust their workforce as needed, and employees are free to seek better opportunities without contractual constraints.

Exceptions to At-Will Employment

While at-will employment is the general rule in most states, there are important exceptions that limit an employer’s ability to terminate employees:

Contract Limitations - Employees covered by an Employment Agreement may have limitations around the reasons they can be fired. Similarly, unionized employees covered by a collective bargaining agreement are generally have contractual protections that limit the circumstances for termination.
Discrimination - Employers cannot act based on protected characteristics such as race, gender, age, religion, disability, or national origin under federal and state anti-discrimination laws.
Retaliation - Employers cannot terminate an employee for engaging in protected activity. This can include complaining about perceived illegal activities, participating in an investigation, or objecting to an employer's practices that the employee believes are improper.
Exercising Protected Rights - Employers also cannot terminate an employee for exercising rights protected by the law. For example, the use of statutorily protected leave (FMLA), filing a workers' compensation claim, using sick leave, or serving on a jury may be protected by law in the applicable jurisdiction.
Other Public Policy Reasons - Employers cannot fire employees for doing thing that society recognizes as important, even if not tied to a specific statute. The sources of public policy vary by jurisdiction, but this concept generally seeks to prevent bad faith terminations with a public policy impact that are not otherwise directly prohibited by law.

What Employers Should Know

Employers should be mindful of the limitations of at-will employment and ensure that terminations comply with federal and state laws. To protect against wrongful termination claims, businesses should:

Clearly communicate at-will employment status in offer letters and employee handbooks and expressly disclaim guaranteed employment for any specific period of time.
Maintain documentation regarding legitimate business reasons for the business' decisions. Contemporaneous documentation is often the best defense against an employee's claim that the reason was an illegal one.
Provide training to managers on lawful termination practices.

What Employees Should Know

Employees should understand their rights under at-will employment and recognize when an employer’s actions may be unlawful. If you believe you have been wrongfully terminated, consider consulting with an employment attorney to assess your legal options.

Final Thoughts

At-will employment provides flexibility but also requires awareness of its limitations and exceptions. Employers must exercise caution to avoid wrongful termination claims, while employees should know their rights and recourse options. If you have questions about at-will employment, consulting with an experienced employment lawyer can provide clarity and guidance.