Exceptions to Employment at Will

When Companies Cannot Fire Employees or Change Employment Terms

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Most U.S. workers are covered under the provisions of "Employment at Will," meaning that they can be discharged for any reason – or no reason at all – without cause, as the employer sees fit. Employment at Will also means that employers can change the terms of employment unless employees are covered by any of the exceptions referenced below.

These exceptions provide legal protections for workers who are covered by state and federal law, collective bargaining agreements, contracts, public policy and other circumstances and situations where employee rights are protected. If you’re concerned about being terminated, it’s a good idea to determine whether any of these exceptions apply.

What Employers Can Do Under Employment at Will

Some of the things that employers can do under Employment at Will include termination of employment, reducing wages, changing employee benefits coverage, limiting hours worked or changing an employee’s job content and work schedule. Having formal job descriptions does not restrict employers from assigning duties not incorporated into job descriptions or from changing an individual’s work responsibilities.

Exceptions to Employment at Will

Not all employees or all situations are subject to the provisions of Employment at Will. Often, when you accept a job offer, your agreement will state whether you’re an employee-at-will, or covered under another type of contract.

The following are circumstances where Employment at Will may not apply:

Collective Bargaining Agreements

Employees covered by union or association agreements often have contractual provisions that stipulate when and how an employee can be fired. Unions usually have a well-defined appeals process as recourse for members who believe that they have been wrongly discharged.

Individual Employment Contracts

Workers in some industries and at some organizations have employment contracts that outline the terms of employment and conditions for discharge. The employer must follow the terms of the agreement.

Public Policy

Most states recognize that certain public policy guidelines limit the exercise of Employment at Will by employers.

For example, employers are prohibited from firing employees who have filed claims for workers compensation, workers who have reported legal transgressions by their employer or employees who refuse to violate laws as they carry out their duties. Public policy guidelines also protect workers who are engaging in acts that are in the public interest, such as serving in the military reserve or on a jury.

Statutory Protections for Employees

State and federal laws protect employees from being discriminated against in hiring or firing. Categories of protection include race, national origin, gender, age, religion, pregnancy, family status, veteran status, disability, ethnic makeup and sexual orientation (in some states).

Well-defined company policies on termination, which are clearly outlined in employment manuals, provide protection for some employees. Verbal assertions by management that employees will not be fired without just cause may also hold up in a few instances, though these are often hard to prove.

Covenant of Good Faith and Fair Dealing Exception

Eleven states (Alabama, Alaska, Arizona, California, Delaware, Idaho, Massachusetts, Nevada, Montana, Utah, Wyoming) consider exceptions to Employment at Will based on the broad principles of good faith and just cause. Employees in these states can put forward lawsuits if they believe that their termination was unjust.

Some courts have interpreted this to mean that terminations must be for “just cause,” and can’t be “made in bad faith or motivated by malice,” per the Bureau of Labor Statistics.

Many Employers Are Still Influenced by the Opinion of Employees

Even when employers might legally be permitted to exercise Employment at Will, many organizations will provide recourse to employees who believe that they have been treated unjustly.  This only makes sense: Employers who develop a reputation for treating employees unfairly will have difficulty attracting and retaining top performers.

Consult company policy and contact your Human Resources department if you believe the terms of your employment have been unfairly altered. It’s in the best interests of your employer to maintain a good relationship with you, even if their requirements from your employment have evolved.

Have a Question?

Here are answers to the most frequently asked questions about termination from employment, including reasons for getting fired, employee rights when you have been terminated, collecting unemployment, wrongful termination, saying goodbye to co-workers and more. If you’ve recently been terminated, and have concerns about the process or what happens next, this is the place to look.