Few subjects in the field of employment law have caused more confusion in the minds of the general public than the doctrine of at-will employment. In general terms, an employee who is not a member of a union and is not a government or other pubic employee, is considered to be an at-will employee absent the existence of a contract specifically saying otherwise. Therefore, the majority of employees in the United States are at-will employees. Many at-will employees are under the mistaken belief that they can prevail in a wrongful termination claim simply by proving that their employer acted unfairly in firing them. In many instances, however, that is simply not the case.

What is At-Will Employment?

In a nutshell, at-will employment is a type of employment contract where either the employer or employee may terminate the employment relationship at any time, with or without cause. In other words the employer may fire the at-will employee whether or not it has a good reason, and the employee may quit at any time, whether or not he or she has a good reason. Although the at-will employment doctrine gives an employee the right to quit for any or no reason, this rule most frequently comes into play as a defense used by employers who have been accused of terminating an employee without good cause. In those situations, the employer simply argues that it was not required to have good cause to terminate the at-will employee. In many cases they are right. One court case from 1884 described the relationship from the employer’s perspective this way:

“All may dismiss their employees at will, be they many or few, for good cause, for no cause[,] or even for cause morally wrong, without being thereby guilty of legal wrong.”

Payne v. Western & Atlantic Railroad Co., 81 Tenn. 507, 519-520, 1884 WL 469 at *6 (Sep. term 1884).

Modernly, some exceptions to the at-will employment doctrine have evolved that provide at least some protections for employees. However, it still operates primarily to benefit employers.

Contrast – Contracts for a Definite Term of Employment

Unlike an at-will employment contract, a contract of employment for a specified period of time, e.g. 2 years, ordinarily may be terminated only for good cause. However, even written contracts for a definite term of employment may be rendered “at-will” if they also contain a provision that either party can terminate the contract at any time, with or without good cause.

History of At-Will Employment

Unlike many areas of law that evolved from English common law, the doctrine of at-will employment is a uniquely American creation, and was developed in this country in the late 1800’s. Despite this doctrine’s often harsh results, it was not until the mid 1900’s when the first exceptions to this rule began to appear. Since then, several common law and statutory exceptions to at-will employment have evolved. In the majority of situations, however, the at-will doctrine continues to primarily benefit employers to the detriment employees. As of the date of this writing, all states except for Montana follow the at-will employment doctrine.

Exceptions to At-Will Employment Doctrine

(1) Anti Discrimination Statutes: Several anti-discrimination statutes have been enacted that protect at-will employees from being terminated, demoted or harassed because of certain types of discrimination, including discrimination based on age, race, color, religion, sex, national origin and a few other characteristics. An at-will employee who has been terminated for a discriminatory reason as set forth in those statutes, may proceed with a claim against the employer despite the fact that in most other situations the employer of an at-will employee can terminate that employee with or without cause.

Federal Statutes

One example of a federal anti-discrimination statute is Title VII of the Civil Rights Act of 1964. Title VII prohibits employers from discriminating against covered employees because of that employee's race, color, religion, sex or national origin. It should be noted, however, that Title VII only applies to employers who employee 15 or more employees. Some other examples of federal statutes that afford some protections to at-will employees are the Age Discrimination in Employment Act, and the Americans with Disabilities Act.

State Statutes

Some states have passed their own anti-discrimination statutes, some of which provide greater protections than what is afforded under similar federal statutes.

(2) Public Policy: Most states in the U.S. recognize a public policy exception to the at-will employment doctrine. In those states, an at-will employee may bring a claim against an employer for wrongful termination if that employee was terminated in violation of a public policy. Some examples of public policy violations include reporting safety violations, reporting illegal conduct by the employer, either to a governmental agency, or internally, engaging in acts that public policy encourages, e.g. jury duty, or exercising a statutory right.

(3) Implied Contract: A majority, but not all U.S. states recognize the existence of an “implied contract not to terminate except for good cause” as an exception to the at-will employment doctrine. Under this exception, circumstantial evidence can be used to show that what started as an at-will employment, later evolved into an implied contract not to terminate the employee without just cause. Proving the terms of an implied contract is often difficult, and the burden of proof is on the fired employee.

Conclusion

Although there are several exceptions that provide at-will employees some degree of protection from an unjustified termination, it is important to remember that in many cases no such exception will exist, and the at-will employee will have no legal remedy if he or she has been unfairly terminated.