What Does Employment At-Will Mean?

Two businessmen with contract, portrait (wide angle)
••• Arthur Tilley / Taxi / Getty Images

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.

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. It allows both parties to engage in a fair, comfortable work environment without any major commitments from either side. Employers, for example, can change the terms of employment—such as wages, benefit plans, or paid time off—without notice or consequence.

Employee Rights

Despite the terms of at-will contracts, employees do have rights when their job is terminated, including contract rights, company policy, and statutory rights provided by federal and state law.

Both state and federal governments hold jurisdiction over at-will employees to protect them from all sorts of issues and/or possible reasons for termination. These 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.

Exceptions

Certain 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. Examples of implied employment contracts often are discovered when an employer’s policy book, or new hire handbooks, 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 seven states do not recognize public policy as an exception to this rule. These states include Alabama; Georgia; Louisiana; Maine; Nebraska; New York; Rhode Island, and Florida.

Documentation

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.