What Does Employment At-Will Mean?

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Employment at will means an employee can be terminated at any time without any reason, explanation, or warning. It also means an employee can quit at any time for any reason – or no reason at all.

At-will employment has grown increasingly more popular over time. This type of employment involves a great deal of flexibility for both the employer and the employee. Employers, for example, can change the terms of employment – such as wages, benefit plans, or paid time off – without notice or consequence. Employees can change jobs without notice if they choose. (Although it’s generally best to provide two weeks’ notice, regardless of legal requirements, to protect your reputation with future employers.)

Employee Rights

While at-will employment provides fewer worker protections than alternatives such as employment under a union collective bargaining agreement, employees do have rights after a termination. These include statutory rights under federal and state law, such as unemployment insurance and anti-discrimination laws.

Federal and state governments have laws protecting at-will employees from wrongful termination. Reasons can include race, religion, citizenship, retaliation for performing a legally protected action, whistleblowing, disability, gender, age, physical health, sexual orientation, and other factors protected by labor laws.

In addition, company policy may offer protections such as severance pay for employees who are terminated under certain conditions.

Exceptions to At-Will Employment

Some situations might require either an employer or an employee to follow stricter guidelines than what is typical for at-will employment. The following are examples of such exceptions:

Employment Contracts: An employee who is covered under a collective bargaining agreement or who has an employment contract may have rights not afforded typical at-will employees.

Implied Contracts: Employers are prohibited from firing an employee when an implied contract is created between them, regardless of whether or not a legal document exists. It is usually very difficult to prove the validity of such an agreement, and that burden rests with the employee. Your employer’s policy book, or new-hire handbook, might indicate that employees are not at will and can only be fired for good cause.

Good Faith and Fair Dealing: Yet another exception is known as implied covenant of good faith and fair dealing. In this case, employers cannot fire a person in order to avoid their duties, such as paying for healthcare, retirement, or commission-based work.

Public Policy: Employers are not able to fire an employee if the action violates their state’s public policy exception. In this case, employers are prohibited from firing or seeking damages from an employee if the employee’s reason for leaving benefits the public. In the United States, only eight states do not recognize public policy as an exception to this rule. These states are Alabama, Florida, Georgia, Louisiana, Maine, Nebraska, New York, and Rhode Island.

Documentation of Company Policy

Most employers state clearly in their employee handbooks that employees are at will. While this is not explicitly necessary, it can help prevent disputes from arising later on. 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.

Nolo.com suggests the only time this really can be an issue is if an employee accepted a position based on a verbal agreement that conflicts with an at-will employment agreement they later are asked to sign. In that event, it is recommended that the employee consult with an attorney before signing such a document.

Does Employment at Will Mean That You’ll Be Fired Without Warning?

In short: not necessarily. But it’s best to conduct yourself as if you might be terminated without warning. Have your resume, references, etc. prepared and ready to go, so that you can begin looking for another job immediately if you need to do so.

That said, employers have a brand just like any company, and most prefer to avoid gaining a reputation for impulsiveness or cruelty. So, barring situations in which they feel you’ve given them good cause, many will prefer to soften your transition. That might mean giving you a bit of warning in the form of placing you on a performance improvement plan prior to termination, or providing you with severance after a separation, or simply not contesting your claim to unemployment benefits.

Bottom line: just because an employer can do something, doesn’t mean they will. Prepare for the worst, but don’t obsess over it. In today’s job market, it pays to be ready to make a change on short notice regardless. After all, you never know when a better opportunity will come along and you’ll decide to take advantage of at-will employment and get a better job.

The information contained in this article is not legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law.