At Will Employment Contracts: Everything You Need to Know
At will employment contracts govern at will employment, which means an employee is employed both at his/her will and the employer's will. It is legal to fire an employee at any time, for any reason, without explanation or warning.3 min read
At will employment contracts govern at will employment, which means an employee is employed both at his/her will and the employer's will. It is legal to fire an employee at any time, for any reason, without explanation or warning. The flip side of this is that the employee can also quit for any reason, at any time, without explanation or warning. At will employment is popular in all states except Montana as it gives flexibility to both employers and employees.
A contract is also flexible in employment at will states. The employer can change an employment contract's terms without warning or penalty. However, employees have certain termination rights protected by contracts, employer policies, and state and federal law.
Employee Rights in At Will Employment Contracts
Both state and federal governments have laws governing reasons an employee cannot be fired for:
- retaliation for a protected lawful action such as whistleblowing
- sexual orientation
- physical health
- other protected categories
You can find which factors are protected by labor law online. You can also consult with an attorney if you think you were discriminated against.
At Will Employment Contract Exceptions
There are some exceptions to at will employment contracts. These include if an employee has an employment contract, is covered by a collective bargaining agreement, if discrimination is involved in termination, if public policy is violated, or if company policy gives guidelines for termination. Other exceptions include implied contracts, such as receiving an employee handbook, but this is difficult to prove in court and the burden rests on employees.
Good faith and fair dealing is another exception. This means an employer can not fire an employee to avoid paying them or any promised benefits.
Employers may not fire an employee if doing so would violate public policy. This law also prevents an employer from seeking damages against an employee who left if it benefits the public by doing so. However, eight states - Alabama, Florida, Georgia, Louisiana, Maine, Nebraska, New York, and Rhode Island - do not recognize this as a right.
At Will Employment
Many prospective and new employees are confused by the statement that they will be employed at will. This means that in every state except Montana, employers can let you go for any reason and you have limited grounds to fight your termination. For example, you can be fired for your favorite pants being black. The law presumes you are employed at will unless your employer clearly states they will only fire you with cause, usually in written documents or oral statements.
Your employment documents probably indicate if you are an at will employee. If you have signed anything agreeing to this, that's the end of the story. If you have not, check your employer's written statements---do they say you can be fired at any time and without cause? Remember, they do not have to use the term "at will".
Some employers have a policy that requires cause for termination. If this is the case with your employer, you are entitled to rely on these rules. This is especially the case if you have a contract that states you can only be fired for cause. If you are fired for a reason not specified in the contract, you have a legal claim against your employer for breach of contract.
Statements by your employer such as "We only fire employees for repeated performance problems" constitute an implied contract, which your employer is bound by. However, if you are told you are an at will employee, that will mean your employment is at will.
Signing an At Will Employment Contract
While you are not required to sign an at will employment contract, most courts have ruled that you can be fired or not hired for refusing to do so. Even if you do not sign the agreement that you are employed at will, the law presumes you are employed at will. Signing this, however, does not mean your employer will fire you without cause.
Be wary of signing an at will employment contract if your employer promises something else, such as you'll be given 90 days to learn your job and won't be fired during that time. Virtually all courts rule that a signed document stating you are employed at will supersedes any promises your employer made. If in doubt, ask about discrepancies, and get all promises in writing.
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