What Is an At-Will Employee?

The term "at-will" employee has been thrown around a lot. But what does it really mean?

An "at-will" employee is someone an employer can terminate at-will for any reason, or for no reason at all. Under a formal employment contract, however, individuals are not employed "at-will," and the terms of the contract govern the employment relationship.

Although the at-will employment doctrine is still technically in force in most jurisdictions across the country, it's applied differently from state to state. Some states are much more protective of employees than others. Those states have established "exceptions" to the at-will doctrine. And many state courts will "imply" a contract between the employer and employee, even where no formal agreement exists. This notion of an implied contract protects employees from discharge or demotion without cause. Evidence of an implied contract is usually based on such factors as the employer's written policies (for example, employee manuals), treatment of similarly situated employees, and even the statements of the company's managers and supervisors. Courts also look to the history of the employment relationship, and the circumstances surrounding termination, to determine whether an employee was wrongfully demoted or discharged.

There's also an enormous body of federal and state law limiting an employer's ability to terminate employees for reasons having to do with race, ethnicity, religion, marital or disability status and, in some cases, sexual orientation. Certain types of employee conduct are also explicitly protected. Complaints about violations of employee rights, union activities, workers' compensation filings, reports of health or safety violations, and several other categories of employee activities cannot be the basis of a termination decision.

The bottom line is that an employer cannot fire employees in any way that constitutes discrimination, a violation of state public policy, or contradicts any actual or implied promise regarding the criteria or procedures for employee termination. That still leaves wide latitude to fire employees for economic or performance reasons, for violating the law or internal company policies, or even for no reason at all, in some cases. Just be sure you know the law, apply your own policies consistently, and document everything when terminating an employee.

The information here does not constitute legal advice and should not be relied upon as legal advice. If you have a legal problem, consult an attorney in your area concerning your particular situation and facts. Nothing presented on this site establishes or should be construed as establishing an attorney-client relationship between you and Gregory A. Bonfiglio or the law firm of Morrison and Foerster LLP.