What Does At Will Employment Mean in the US?

A common question people ask when entering the US market for the first time is, ‘What does at will employment mean?’ This video covers the definition of at will employment in the US. 

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, however, 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 union agreements that state 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 have to 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 in order to avoid their responsibilities, such as paying for healthcare plans, and retirement.  

  • 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.  

• Public policy – 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.’ Thus, 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 a 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.