What is at-will employment?

Last updated: July 14, 2024
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Eleana Bowman
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What is at-will employment?
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In the US, around 161 million people currently have a job. While there are different rules between states, many of these workers have at-will employment.

What does this mean? Both employers and team members can part ways without notice — and there doesn’t need to be a reason.

However, it’s not always straightforward, and there can be exceptions. While employers don’t need a just cause, there are circumstances when firing you could be illegal.

We've compiled the following guide to help you understand your rights and responsibilities. We’ll explain what at-will is and some exceptions to the rule.

We’ll look at at-will employment states and explain what you can do if you think you’ve been let go unfairly.

What is at-will employment?

First, let's explain what at-will employment is. In the US, most people are employed on an at-will basis. This means if you're an at-will employee, your manager can fire you without a reason.

The employer doesn't need to give you notice, and you won't be able to take legal action against them.

There are some exceptions to this rule. For example, if you have an employment contract, you'll have a customized agreement that comes with its own set of rules. And your employer can't let you go for an illegal reason, such as discrimination or retribution.

It costs time and money for employers to hire new team members. Firing people on a whim doesn't usually make good business sense. So, companies often have policies and procedures for managers to follow before they let someone go.

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Keep in mind, at-will employment goes both ways. You can leave your job without a good reason and don't even need to give notice.

Are there any exceptions to the at-will employment rule?

As mentioned, there are a few circumstances when employers can’t end your employment for no reason.

What are they? Here are some examples of when you can't legally be fired.

1. Discrimination

The rules can vary between states, but there are anti-discrimination laws to protect both workers and job applicants. These laws are designed to create fairer workplaces.

So, what do anti-discrimination laws cover? There's a long list, including national origin, religion, sex, disability, sexual orientation, race, age, or color.

Here's an example. Let's say someone tells their boss they're pregnant, and they are immediately fired. Or a more qualified and experienced person misses out on an opportunity due to their race.

In both of these scenarios, there could be a discrimination case.

It can be complicated because your employer can still fire you. For example, if you have a medical condition, you can't be let go because of your disability. However, you can still be fired for any other reason. It's up to you to prove that you've been discriminated against.

2. Public policy

The public policy exception does depend on where you live. If your state has a specific public policy, your employer can't go against it.

One of the most common public policy exceptions for at-will employees is retribution. For example, if someone reports harassment in the workplace, they can't be fired for speaking up. You can't be fired for putting in a worker's compensation claim if you’re injured at work.

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And if your employer asks you to do something illegal but you refuse, they can't punish you by letting you go. Whether recording a false financial transaction or driving without a license, you should never have to break the law to keep your job.

Remember, public policy exceptions aren't always nationwide, so getting local advice is important.

3. Employment contract

While at-will employment is common, some people have formal written employment contracts. These documents contain different terms, including salary, job duties, hours, benefits, and confidentiality requirements.

It may also include how long the position will run for. The job may be ongoing or temporary to fill a gap while another employee is on leave.

In this case, the employer needs to follow the terms of the agreement because they are legal documents.

You can be fired if you don't honor your part of the deal, such as showing up for work and completing your job duties. But if an employer wants to replace you without a good cause, they can't legally do it.

4. Implied contract

Even if there's no formal employment agreement, you may still have an implied contract.

For example, if you were given the impression that you have job security and employment benefits, you'd assume you have an ongoing position.

The way the company treats its employees should be consistent and can help to form an implied contract. If you're working as a cashier, and you perform your duties to a high standard, you should expect the same treatment as others with the same experience.

And if your boss tells you there's a future for you at the company, that could be an implied contract. If they fire you a week later without cause, they may be breaking the law.

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While implied contracts do exist, they can be difficult to prove. Without a written contract, you'll need other evidence to support your wrongful termination case.

5. Covenant of good faith

When there's a covenant of good faith contract law, it'll apply even if you're an at-will employee.

Once again, the rules can vary between states, and this isn't as common as the other exceptions.

Simply put, employers need to treat their team members fairly. They need to be honest and act with integrity. This means they can't fire someone in bad faith or out of spite.

Employers can protect the company by only firing people when there's a just cause. For example, letting someone go because of poor work performance would be acceptable.

What steps can employers take before letting you go?

When a company wants to hire a new employee, the average cost is around $4,700. Because of the time and money involved in finding new staff, firing people is usually a last resort.

Even if employees are there on an at-will basis, it doesn't mean managers want to keep replacing and training team members. Supporting staff before it gets to the firing stage can be a better option. This is good news for workers because keeping your job means you'll get job security and an ongoing employment benefit program.

What can employers do before letting you go? Often, there'll be a company policy handbook with steps to take.

The response will depend on the issue. For example, are you arriving late to work or leaving without finishing your daily duties? Or maybe you're taking too many personal calls or not wearing the right uniform.

It may start with a verbal or written warning. You may also have a meeting with a supervisor to discuss the behavior. If you are having trouble doing your job to a high standard, you should be honest with your manager. They may have strategies to help you, such as additional training.

If you get multiple warnings and things don't improve, you may lose your job.

Do you need to give notice?

Losing your job is one thing, but what happens if you want to quit? Whether you're moving states, going back to school, or have found a new opportunity, you may be wondering what to tell your boss.

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If you're an at-will employee, you can leave without giving a reason. You don't legally have to give notice, but this doesn't mean you shouldn't.

It's always best to leave on good terms because you may need a reference in the future. Even if you're unhappy, try to be professional — even on your last day.

If you don't have another job to go to straight away, consider giving your employer two weeks’ notice. This gives them time to find and train a replacement.

The right choice will depend on your relationship with your employer. If it's a toxic work environment and you can't stay any longer, then giving two weeks’ notice may not be possible.

Can you get unemployment benefits if you’re fired?

If you lose your job, you'll still need money coming in. While you look for a new job, you may be able to get unemployment benefits.

Your eligibility can depend on your location and the reason why you were fired. For example, if someone doesn't show up for work or they're guilty of workplace bullying, they probably won't get benefits.

But if you were fired due to budget cuts or because the company is downsizing, you'll probably get income support. These types of scenarios are out of your control and not a reflection of your work ethic.

What if you quit? Most people who quit their jobs aren't eligible for unemployment benefits. There can be some exceptions, and you can still apply to have your case assessed.

Even if you're eligible, there may still be a waiting period.

What are the at-will employment states?

In the US, most states support at-will employment. While these work arrangements are common throughout the country, there's one state that hasn't jumped on board.

In Montana, you can't be fired without good cause. This law kicks in once any probationary period has ended. Employers in this state can still let people go, but they need to justify the decision. For example, if you don't follow company policies, your job could be at risk.

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All other states, including Alabama, Idaho, Georgia, Kansas, Florida, and California, have at-will employment. But this doesn't mean the fine print is the same. Labor laws and exceptions can vary between states and local regions.

Can you sue for wrongful termination?

If you think you've lost your job for an unlawful reason, you may be able to make a claim for wrongful termination.

Remember, in every state except Montana, your employer can fire you without reason. But they can't let you go for an illegal reason. We've listed some of the reasons above, which include discrimination and retribution.

You can take legal action for employment losses, such as unpaid wages and loss of benefits. These types of claims can be time-sensitive, so it's best to get legal advice as soon as possible.

Before you file a claim, consider the following questions:

  • Did you break a condition of employment?

  • Do you have a written contract or an implied contract?

  • Are there any guidelines in the employee handbook?

  • Do you have access to your employee file?

  • Are you in an at-will state?

If you do want to put in a wrongful termination claim, you'll need evidence to back it up. If you want your job back, you may be able to discuss your circumstances with the human resources department.

What is just cause firing?

Just cause firing is when you lose your job for a valid reason. While employers have responsibilities, so do workers.

For example, if you violate your contract or there's serious misconduct, you can be fired on the spot and without severance pay.

Let's say a person works for a financial institution, and they take funds for their own use. Or if someone continually uses tobacco products in a smoke-free workplace. Alternatively, a person may be found guilty of sexual harassment or workplace bullying. These are three examples of serious misconduct.

Just cause firing is usually a result of a working relationship that can't be fixed. Other strategies, such as warnings and training, won't work, so job termination is the only solution.

Understanding your rights

As a worker, it’s important to know your rights. In the US, most people have at-will employment, which means you can be fired without a reason. The only state without any at-will arrangements is Montana.

Despite this, there are times when firing you is still illegal. The exceptions can vary depending on where you live but can include discrimination, public policy, and a covenant of good faith.

Some employees have a legally binding employment contract, which overrides any at-will laws. Implied contracts can also be in place.

You don’t need to give notice if you’re an at-will employee, but it can improve your chances of getting another job.

Looking for a new position? Head to our job board to see what’s available near you. Don’t forget to visit our resource center for interview and resume tips.



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