Key Takeaways:

  • An employment at will contract allows either party to terminate the relationship at any time without cause or notice.
  • Employees still retain rights under federal and state laws protecting against discrimination and retaliation.
  • Exceptions to at-will employment include public policy, implied contracts, and good faith/fair dealing doctrines.
  • Employers can still create policies and employee handbooks that limit at-will terms.
  • Legal protections and enforceability can vary by state, and courts may interpret exceptions differently.
  • Probationary periods, performance reviews, and company policies can also impact at-will employment terms.
  • Seeking legal advice is recommended when navigating or negotiating at-will terms.

At-will contracts between an employee and an employer mean that the employee may be terminated at any time, for any reason, and the employer does not need to give any notice when this happens. No specific document is needed for this contract, so many workers are surprised to find out about their at-will status.

In an at-will employee relationship, the employer does not need a good reason to terminate your employment. This is considered the default status for most employees, and in order to change it, you would need to sign an employment contract that states your employer needs a good cause to fire you.

Notice of Termination

In an at-will relationship, either the employee or the employer can terminate employment for any reason, or no reason, at any time. No explanation is required, and it would not be possible to sue the company as a result. This may sound like a bad thing, but it creates flexibility for both sides, eliminating any serious commitments.

On the other hand, it also means that employers may change the employee's wages, benefits, paid time off, or other policies without giving advance notice.

At-Will vs. Just Cause Termination

While an employment at will contract allows employers to terminate employees without cause, some employment models use a "just cause" standard, particularly in unionized settings or public sector jobs. Under a just cause model, employers must demonstrate valid reasons for termination, often supported by documented performance issues or misconduct.

Key distinctions include:

  • Burden of Proof: Under just cause, employers must show legitimate reasons for termination.
  • Due Process: Employees are typically entitled to progressive discipline or internal review procedures.
  • Job Security: Just cause provides more protection against arbitrary dismissal, unlike at-will employment.

This comparison highlights how at-will employment maximizes employer flexibility, while just cause prioritizes employee job stability.

Rights of the Employee

The at-will contract does not mean the employee has no rights if they are terminated from their job. Any statutory rights provided by state or federal laws, company policies, and contract rights are preserved. There are issues and reasons for termination that the federal and state government protects employees from, such as race, religion, gender, age, and sexual orientation. 

If you are concerned about your rights as an employee, you should seek out information and find out what laws exist to protect you, and how you may get help if you think you are the victim of discrimination in the workplace.

State-by-State Variations in At-Will Employment

Although at-will employment is the default standard in most U.S. states, some states have specific laws or judicial interpretations that modify or limit the doctrine.

Examples of variations:

  • Montana: The only state that does not follow at-will employment by default. After a probationary period, employers must show "good cause" for termination.
  • California & New York: Recognize implied contract and public policy exceptions more liberally.
  • Arizona & Georgia: Tend to strictly adhere to the at-will doctrine with fewer recognized exceptions.

Because state law can significantly affect the enforceability of an employment at will contract, it's essential to understand your jurisdiction’s approach.

Exceptions to Employment at Will

There are certain situations in which employers are not allowed to terminate at-will employees:

  • Contracts for employment, which are provided by collective bargaining from unions or other labor organizations.
  • Implied contracts do not require legal documents for enforcement, but these are hard to prove. One common way these occur is by finding new-hire handbooks or employer policy documents that indicate employees are not at-will, though this may not be common knowledge throughout the company.
  • Fair dealing and good faith is also a form of implied contract. It protects employees from being terminated so that the company can avoid fulfilling its side of the agreement, such as paying for health insurance, a retirement plan, a commission, or other compensation.

Common Law Exceptions to At-Will Doctrine

Beyond statutory protections, courts have recognized several common law exceptions to the employment at will contract:

  1. Public Policy Exception: Employees cannot be fired for reasons that violate public policy, such as:
    • Refusing to commit an illegal act.
    • Reporting illegal conduct (whistleblowing).
    • Exercising a legal right (e.g., voting or filing a workers’ compensation claim).
  2. Implied Contract Exception: Arises when an employer's words, actions, or policies imply job security, such as:
    • Verbal assurances during interviews.
    • Provisions in employee handbooks that suggest termination will only occur for cause.
  3. Covenant of Good Faith and Fair Dealing: Recognized in some states, this prevents employers from terminating employees to avoid responsibilities like paying commissions or benefits.

These judicial exceptions play a significant role in protecting employees from wrongful termination under an at-will agreement.

Employment Contracts

When an employee is hired, they are probably given some type of contract to read over and sign. There are different kinds of these documents, and they may vary even within the same company. Such a contract is not a legal requirement, however, and it is merely implied.

An employment contract may include the following items:

  • Employee's start date, benefits, and wages.
  • Confidentiality or non-disclosure agreements, which prohibit the employee from sharing any proprietary information belonging to the company.
  • Non-compete agreements, which prohibit the employee from doing any business that directly competes with the employer or from stealing the customers of that employer.
  • Inventions and Patents ownership agreements, which specify that anything the employee invents while they are employed at the company belongs to the employer.
  • Exclusive employment agreements, which state that the employee may not work for any other company while holding a job with the employer.
  • An agreement stating that the employee is not entitled to any additional pay if they serve on a committee or hold a special position on a board as an officer.
  • Termination agreement, stating that either the employee or employer can terminate employment with no cause.

Probationary Periods and At-Will Employment

Many employers use a probationary period—often 60 to 90 days—as an initial evaluation timeframe. While probationary periods do not override an employment at will contract, they may affect how employers approach termination early in the employment relationship.

Key characteristics of probationary periods:

  • Employers use this time to assess performance and cultural fit.
  • Employees may receive more frequent feedback or evaluations.
  • Termination during this period is still typically at-will unless specified otherwise.

Importantly, some employees assume that successful completion of a probationary period guarantees job security—but unless explicitly stated in writing, at-will terms still apply.

Do You Need to Agree to an At-Will Contract?

Employers often include at-will agreements with the many other documents new hires need to sign. If you are in this situation, it rarely hurts to negotiate. You don't have to sign an at-will agreement, but if you do not sign, the employer has the right to retract their offer of employment. However, most employers realize that this would mean losing a good employee, and will negotiate with employees to solve problems such as these.

When you are given employment contracts or other documents to sign as a new hire, take the time to look over them carefully and make sure they are fair and are a good deal for you.

Best Practices for Employers Using At-Will Contracts

Employers who rely on employment at will contracts should still approach termination and employment policies carefully to avoid legal disputes.

Recommended practices include:

  • Clear Documentation: Include explicit at-will disclaimers in offer letters and handbooks.
  • Consistent Policies: Ensure HR and management are aligned on how policies apply to at-will employees.
  • Avoid Mixed Messages: Avoid language such as "permanent employment" that may imply a contract.
  • Train Supervisors: Supervisors should understand at-will employment and avoid statements that create implied agreements.

For employees, reviewing all documents provided during hiring—and understanding verbal representations—is key to assessing your legal standing under an at-will contract. If you’re unsure, consulting an employment attorney can help clarify your rights.

You can find experienced employment attorneys on UpCounsel to guide you through reviewing or negotiating an employment at will contract.

Frequently Asked Questions

1. What does an employment at will contract mean? It means that either the employer or employee can end the working relationship at any time, with or without cause or notice.

2. Can I be fired for no reason under an at-will agreement? Yes, unless an exception applies, such as discrimination, retaliation, or breach of an implied contract.

3. Are all employees in the U.S. subject to at-will employment? Most are, except in Montana and for those under specific union agreements or employment contracts that override at-will status.

4. Can my employer change my pay or job duties under at-will employment? Yes, employers can generally modify terms of employment, but they must still comply with wage and hour laws and anti-discrimination statutes.

5. How can I protect myself in an at-will position? Keep records of performance reviews, understand your company policies, and clarify the terms of your employment in writing where possible.

If you need more information or help with at-will contracts, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.