At-Will Employment?

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Question

I want to make sure that our company is compliant with all applicable requirements when we terminate an employee. I need to ensure that I understand exactly what “at-will” means. I believe if we have an at-will employment relationship, then we can terminate an employee at any time. Can you confirm my understanding?

Answer

Employment-at-will is a legal doctrine that states that the relationship between an employer and employee may be terminated by either party at any time, with or without reason, as long as the reason is not illegal (for example, due to illegal discrimination). This doctrine holds true in every state except Montana, which protects employees from wrongful discharge after they complete a probationary period. Otherwise, employment-at-will is a default presumption in the United States, but this presumption can be overcome by implied or explicit employment contracts, by governmental regulation or for public policy reasons. For example, it is generally against the public interest to terminate an employee’s employment for refusing to perform an illegal activity.

Employment contracts exist when employers and individuals define the terms and expectations of the employment relationship. These can be defined over time, and they do not need to be in writing. Depending on your state law, it could be possible to create an implied contract with an employee by making oral promises of employment for a specific period of time.

It is a best practice for employers be clear when hiring a new employee that the employment is at-will. It is also generally recommended for employers to state in their employee handbooks that all employment with the company is at-will employment and that no contract of employment is being made with any employee.

While it is correct that an at-will employee can generally be terminated at any time and for any reason, employers should also be sure that there were no illegal reasons for the termination, such as discrimination on the basis of a protected status like age, sex, race, religion or disability, or the exercise of any legally protected right, such as taking certain types of leave. Employers should be sure to document the reasons for each termination in the event that there is a dispute.

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Published Date:April 22, 2022

Categories: HR Question of the Month