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October 12th, 2015
Most offer letters or employee manuals specifically state that a person’s employment with the company is on an “at-will” basis. What does that actually mean? What rights do “at will” employees have against employer termination? Does it matter if an employee has performed well and reported for work as scheduled? The protections vary from state to state, but they have this in common: the protections are limited, and the employer has the upper hand.
According to the National Conference of State Legislatures, employment relationships are presumed to be “at-will” in all U.S. states except Montana. In fact, the United States is one of a handful of countries where employment is predominately at-will. Generally, an at-will employee may be terminated by his or her employer at any time for any reason, with or without cause, as long as the reason is not an unlawful reason. What this means is that an at-will employee can be fired without cause, as long as the employer is not terminating the employee for an unlawful reason, such as race discrimination, gender discrimination, sexual harassment, religious discrimination, disability discrimination, and in many states, sexual orientation discrimination.
Of course, it has been argued—and it is true--that the at-will arrangement is somewhat of a two-way street, given that employees in an at-will arrangement can quit the company without notice and for any reason or for no reason at all. To be sure, the 13th Amendment—with its prohibition on involuntary servitude--insures that no one has to be enslaved to a job and forced to work. That said, most workers would gladly agree to give the standard two weeks’ notice before leaving, if in exchange, the employer would agree only to terminate an employee for cause. That kind of job security is not presented in an ordinary at-will arrangement.
An at-will arrangement also means that the terms of employment can be changed without notice to the employee or adverse consequences to the employer. In other words, an employer can unilaterally change a position from full-time to part-time, an employer can change the compensation package, including salary and benefits, and it may reduce or even eliminate paid time off.
There are exceptions created by common law and statute, to the at-will doctrine that protect employees from adverse action; these exceptions vary from state to state. For example, most jurisdictions recognize an exception that protects employees against adverse employment actions that violate a public interest. For instance, in most, if not all states, it would be unlawful to fire an employee because he or she exercised a right to apply for worker’s compensation benefits. Refusing an employer’s request to commit perjury is another example of the public policy exception to at-will employment—an employee is protected from being fired in such a situation. In addition, whistleblowing may provide specific exceptions, particularly where public employees are concerned.
Employers and employees are free to modify the at-will rules by entering into a formal contract of employment. Contracts, however, are the exception, not the rule, and primarily are reserved for higher paying executive positions. Not infrequently, however, when a dispute arises regarding an at-will employee’s rights, the former (or soon to be former) employer may be willing to enter into a settlement agreement to avoid liability or a formal challenge by the employee. If that should occur, it would be advisable to seek advice from a qualified professional before entering into any agreement.
