What does At-Will Employment really mean?

You’ve likely seen the “At-Will” clause in your employment agreement, as every state in the US outside of Montana accepts this employment status. Typically, At-Will gives both employees and employers the ability to sever their relationship at any time with no reason or notice. If so, what are the implications of wrongful termination, and are there other exceptions?

What is a At-Will Employment

At-Will Employment: Your employment with the Company is “at-will”, meaning either you or the Company may terminate your employment at any time, with or without notice and with or without cause.

The sample At-Will clause above appears to remove any potential pre-conditions for ending employment. As the employee, you can quit at any time without the traditional “two-week notice”. For employers, they can fire you at any time without telling you why. In fact, At-Will employment doesn’t always stop there, as it can expand to any changes to your employment status as well. Employers can change your salary, benefits, and working hours with few consequences.

What are the exceptions to At-Will Employment?

The US is one of the only countries to prefer At-Will employment. The global majority only allows termination for cause and often requires severance as well. How does the US prevent abuse of At-Will? Let’s look at the major exceptions when At-Will no longer applies:

1. Public Policy Exception

   42 states make an exception for when the employee is fired for reasons that violate pubic policy. For example, you took medical leave under the Family and Medical Leave Act (FMLA), you filed a worker compensation claim, or you refused to work after your shift ended. In other words, if what you’re doing is following the law or trying to not break the law, you can’t get fired for that reason.
   
   

2. Implied Contract Exception

   37 states make an exception for when a non-At-Will relationship is implied in ways other than your employment contract. The most common example is in Employee Handbooks, if there’s language that you will only get fired for specific reasons. The Michigan Supreme Court case of Toussaint v. Blue Cross & Blue Shield of Michigan successfully won on this exception.
   
   

3. Implied Covenant of Good Faith and Fair Dealing Exception

   11 states makes an exceptions for any termination done in bad faith. In what might seem contrary to to the free-for-all of At-Will, this exception has protected employees in cases where they’ve been fired after working 18 years with no retirement benefits (Lawrence M. Cleary v. American Airlines, Inc.)

Beyond these specific exceptions, it should go without saying that At-Will Employment does not override state and federal law. In other words, you still cannot be fired as a means of retaliation, discrimination, and other unlawful workplace practices.

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We mentioned at the start that Montana is the only state that doesn’t default to At-Will. Their 1987 Wrongful Discharge of Employment Act states that any employee after their probationary period of up to 18 months can only be fired with “good cause”. While there are arguments on both side of At-Will vs. Good Cause, we hope this post has clarified what At-Will Employment encompasses, and when it no longer applies.

For advocacy and beyond,
The Ask Ginkgo Team