Glossary

At-will employment

Apr 5, 2024

What is at-will employment?

At-will employment is a contractual relationship between an employee and an employer in the United States subject to termination by either party at any time, without cause or notice.  It is more common in the United States than in other countries with English-speaking cultures, such as Canada, Australia, and New Zealand.

Employment at will has been around since before modern labor laws were put into place, and still continues today due to its simplicity and flexibility for both parties involved in the relationship.

What types of companies need at-will employment?

  • Companies with a high turnover rate
  • Companies with seasonal employees
  • Companies that hire interns in certain departments
  • Temporary staffing agencies

Exceptions to employment at will

What does at-will-employee mean? It means that he may terminate the employment relationship without cause and without notice, as well as the employer.  In most states, this means it's legal for an employer to fire a worker for no reason whatsoever, or for any reason as long as it isn't based on race, sex, religion, etc. But looking at at-will-employee definition, we can assume that there are exceptions  that protect employees from being fired for certain reasons:

  1. A contract agreement between an employer and an employee is a formal document that can be written or oral. It can also be for a specific period of time or for an indefinite period of time. A contract agreement can also be for a specific task, instead of the employee's entire employment. 
  2. Promissory estoppel. Promissory estoppel is a legal doctrine that prevents someone from breaking a promise they made. It can be used to prevent an employer from firing an employee for reasons other than the employee's job performance, or to protect employees who have been fired after being promised reinstatement in the future. However, promissory estoppel is not automatic and can only be used as a defense against termination if it meets certain criteria:
    1. The employer made a promise.
    2. The employee relied on that promise in some way.
    3. There was no detriment to the employer for making this promise.
  3. Public policy is a broad term, but it can be defined as the general principles of law and government. The courts have interpreted public policy broadly when determining whether an employer may terminate an employee for reasons that are not otherwise unlawful under employment at will.

There are some exceptions to employment at will. Also, if an employee is fired for refusing to work on Sunday afternoons, this may be illegal under federal or state laws regarding religious practices (such as the Civil Rights Act of 1964). Similarly, if an employer fires an employee based on protected characteristics such as race or religion, this would also violate these laws.

Disadvantages of employment at will

There are some disadvantages of employment at will — specifically for employers — that you should be aware of before deciding to adopt such policies within your organization:

  • Lack of incentive to train employees. One of the most common criticisms of at-will employment is that it encourages employers to be stingy with training. This can lead to workers being underqualified and overworked, which in turn increases stress on the employee.
  • In most states, employers can be sued for discrimination.

In which states, employment at will is available?

Montana and Colorado are the only states that do not allow employment at will, according to the National Conference of State Legislatures. These states require employers to give a reason for termination if it does not fall under the «just cause» category. Most states follow the employment-at-will doctrine, but some carve out exceptions for certain types of contracts or employees.

At-Will Employment or Contract Employment?

It is important to understand the differences between at-will employment and contract employment.

At-will employment is when an employer can terminate an employee at any time for any reason, or no reason at all. This means that employees cannot expect to be employed for a certain length of time based on their contract. Contract employment is when an employer has to have a reason (or “cause”) to terminate an employee.

BY ROLE
BY BUSINESS TYPE
BY INDUSTRY