Human Resource Blog

Employment at Will

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What is “employment at will”?

Employment at will is a common law concept that basically says that in the absence of a contract:

• An employer may fire an employee at any time, for any reason or without a reason

• An employee may quit at any time, for any reason or without a reason

Of course, savvy human resource managers realize that firing people without warning or without cause is likely to decrease productivity and reduce employee morale. It can also generate excessive claims for unemployment insurance benefits.

Federal law prevents the employment at will from being used in a discriminatory manner. Specifically, it prohibits employers from firing workers due to race, color, religion, sex, or national origin. Federal law also prohibits employers from discharging an employee solely because of age if they are over 40. In many cases, it is also illegal to fire a disabled person because of their handicap status.  

Still, many employers rely on the employment at will doctrine as a last resort to rid themselves of troublesome employees. Many employee handbooks specifically contain language that preserves the employment at will doctrine. Usually the language is something along the lines of, “Nothing in this handbook shall be considered as an implied or expressed contract to limit the employment at will doctrine.”  Normally an employee verifies this by signing a statement that they have received the employee handbook and agree to its terms.

Employees are well within their rights not to sign an employment at will policy. By the same token, employers are well within their rights to refuse to hire anyone who doesn’t sign the policy.

Be aware that employment at will may be limited by any written agreement with the employee, including a union contract. In 38 states, verbal promises of continued employment will make the employment at will policy invalid.

Almost every state has put significant limits on the employment at will concept. There are 11 states in the U.S. that don’t subscribe to the “employment at will” model. Those states are Alabama, Alaska, Arizona, California, Delaware, Idaho, Massachusetts, Montana, Nevada, Utah and Wyoming. In these states, a different precedent, the “covenant of good faith and fair dealing” applies to employee/employer relationship.