What Is At-Will Employment?

What Does At-Will Employment Mean?

At-Will Employment means that employers can terminate employees with or without notice. Similarly, employees can leave their job immediately without an explanation. It is, generally best practice to provide at least two weeks’ notice, to protect both the US employer’s and employee reputation. Legitimate reasons for employment termination include:

• Poor performance
• Misconduct
• No longer a requirement for the job role

Are There Exceptions to At-Will Employment?

A US employee or employer can terminate their work relationship at any time without notice, if the termination is not for illegal or discriminative reasons, or contrary to an agreed-upon policy between the employer and employee. There might also be situations that cause employers to follow stricter guidelines to the typical at-will employment.

Some exceptions to at will employment include:

Collective Bargaining Agreements

If an employee is covered by collective bargaining agreements that state can determine how an employee can be terminated.

Company Policy

Most US employers state clearly in their employee handbooks and offer letters that employment is at-will. However, if you have a company policy that details how employment can be terminated, and whether employees at risk of being fired must be given warnings, the guidelines must be followed.

Implied Covenant of Good Faith and Fair Dealing

This exception to at-will employment means employers cannot terminate an employee to avoid their responsibilities, such as paying for healthcare plans, and retirement.

Public Policy Exceptions

This is the most widely recognized common law exception to at-will employment in the US. It protects employees against adverse employment actions that violate the public interest. Employers cannot fire or seek damages from an employee if their reason for leaving benefits the public. Examples include:

• If an employee refuses to commit perjury at a trial on behalf of an employer and as a result their position is terminated.

• Reporting an employer’s violation of the law.
• Joining the National Guard or performing jury duty.
• Filing a claim under the state workers’ compensation law

There are eight states in the US that do not recognize the public policy exception. These are Alabama, Florida, Georgia, Louisiana, Maine, Nebraska, New York, and Rhode Island.

Implied Contracts

When oral assurances are provided to an employee that counteract at-will employment status. For example, ‘You’ve got a job for life.’ Even though there is no express written contract between the employer and an individual employee, that employee may have an expectation of fixed term or even indefinite employment based on an employer’s statement.

As a general rule, courts disregard language promising long-term, lifetime, or permanent employment as aspirational and consider the relationship to be at-will.

Employers can further protect themselves by using a clear and unambiguous disclaimer on written materials stating that its policies and procedures do not create contractual rights. Employers can also reserve the right to modify policies and procedures at any time.

Document and Communicate Performance Concerns

If an employer wants to terminate an employee, they should address performance concerns early in the employment relationship or when the performance issue arises.

If problems are not communicated, employees may not realise their performance isn’t acceptable and any sudden action may come as a surprise and be seen as unfair or discriminatory.

This is why it is important for US employers do the following:

• Record clear evidence in writing
• Provide Specific examples of poor performance
• Don’t accuse or attack
• Approach the subject using the correct language
• Provide possible solutions (which are open for discussion)
• Follow up after the conversation

Without proper documentation, the employee has an opportunity to claim wrongful termination.

Document Company Policy on At-Will Employment

Most US employers state clearly in their employee handbooks that employment is at-will. While this is not explicitly necessary, it can help prevent disputes from arising further down the line. Other employers may have new employees sign a document acknowledging that they are at-will employees and they agree to all conditions that come with that status.