Definition of At-Will Employment

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Definition of At-Will Employment

“At-will employment” means an employer can dismiss an employee for any reason, without warning, as long as the termination is not based on discrimination.

What is “At-Will Employment?”

“At-will employment” is the norm in the United States. It means that an employer has the right to dismiss an employee for any reason and without warning as long as the termination is not built on a discriminatory basis. It also means that an employee has the right to resign for any reason at any time.

A discriminatory reason would be an adverse employment decision based on:

  • Age
  • Disability
  • Gender
  • Race
  • Religion
  • Sexual orientation
  • The employee’s gender identity

Visit the EEOC website to learn about prohibited practices and for more details on discriminatory acts.

Employee offer letters or employee handbooks typically include language stating that the employer has the right to terminate any employee at any time, with or without cause. Even if your company does not overtly use the phrase “at-will employment,” it is the likely practice.

Other reasons that employers can’t take advantage of the at-will doctrine

There are other limitations on an employer’s use of the at-will doctrine, such as:

  • Whistleblowing. Employers can’t fire those who complain about workplace safety and health protocol violations or fraud.
  • Union contracts. Many unions bargain with employers and obtain the right to abandon the at-will system in favor of “just cause employment.” This means an employer has to have an explicit reason for terminating workers’ employment.
  • Public policy exemption. Many states have a public policy exemption. This means that terminations are not allowed if doing so violates public policy. As a result, an employee cannot be fired for refusing to violate a law or for missing work because they have been called for jury duty.
  • Good faith. Many states also have a “good faith and fair dealing” exception. For instance, firing an employee immediately before they are to be paid a significant commission could be perceived as acting in bad faith.
  • Contract. At-will employment can be nullified by an employment contract that is either expressed or implied. For example, when the employee handbook or an offer letter says that workers will only be terminated for “just cause,” the at-will doctrine has been expressly canceled. If the owner or someone higher-up in a company repeatedly says that a worker’s employment will only be terminated if they commit misconduct or that jobs with the company are “for life,” then employment at-will has been nullified by an implied contract.

At-will laws in your state

“At will” employment varies by state. The National Conference of State Legislatures maintains a website with a comprehensive definition of the law. Each state’s department of labor website also provides guidance on that state’s specific rules.

Employment is presumed to be at-will in every state except Montana. This is the case even if employees don’t sign any documents expressing this unless a specific agreement states otherwise. Montana employers can take advantage of the “at-will doctrine” to dismiss an employee during a worker’s probationary period. After that, Montana employment terminations must be for “good cause.”

Legal liability under the employment-at-will doctrine

Employees who believe they have been wrongfully terminated can file a complaint or lawsuit. This is the case even though you may be able to end a worker’s employment at any time for any reason.

Why is at-will employment important to a small business?

On the surface, employment-at-will gives employers enormous flexibility to terminate a worker’s employment. Thereby allowing employers to quickly eliminate poor performers and those whose presence in the workplace is detrimental to the employer.

What is the history of at-will employment?

Employment at-will is a basic premise of American employment and labor law. It has been around since the late 19th century. According to a legal treatise from the University of Pennsylvania, the employment at-will doctrine was discussed by the Tennessee Supreme Court in 1884.

Reportedly, the Massachusetts Supreme Court discussed employment at-will in 1877. A primer on employment law published in 1871 also addressed the doctrine.

Other terms similar to “at-will employment” that can help you

  • Gig workers: Contingent workers, such as independent contractors and freelancers, who typically perform temporary work for multiple clients.
  • Workplace flexibility: “A mutually beneficial arrangement between employees and employers on which both parties agree when, where, and how the employee will work to meet the organization’s needs.”
  • Business necessity: When an employer makes an employment-related decision that disproportionately impacts a particular group but is based on business needs. The employer must be able to prove that the action taken is job-related and consistent with business necessity
  • Willful non-compliance: Intentionally disregarding laws and policies to avoid complying with rules with which one disagrees.

Summary of the definition of at-will employment

At-will employment means that employers can fire employees whenever they want for whatever reason they want. It sounds like a simple concept. However, in reality, its use is quite complicated. As a result, employers and HR professionals do not have unfettered authority to terminate employees. Several exceptions to the doctrine exist and are imposed by state and federal law and the courts.

Employers and HR professionals must understand at-will employment and its exceptions to prevent lawsuits and avoid trouble with government regulators.

Similar glossary definitions you must know

  • Full-time equivalent (FTE): An employee that meets the company’s definition of working full-time. For some companies, it’s 40 hours; for others, it’s 30.
  • Independent contractor: A self-employed individual. The contractor’s client (or the payer) has the right to control and direct only the result of the work — not what will be done or how it will be done.
  • Part-time employee: Any employee that does not satisfy the employer’s definition of a full-time equivalent employee.

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