At-will employment has grown in popularity in recent years. It offers a lot of flexibility for employers and employees. For the most part, at-will employment means an employee can be terminated at any time without any reason, warning, or explanation. Employees can also quit at any time for any reason. Generally, at-will employment gives both employers and employees the freedom to end employment without legal ramifications.
But employers need to be aware of the circumstances that can cause a lawsuit. If an employer fires an employee for one of the following illegal reasons, and is found guilty, the business will have to pay penalties.
What are the illegal reasons to fire an at-will employee?
All states except Montana support at-will employment, but there are a few common law exceptions to consider if you’re thinking about firing an at-will employee.
Public good exceptions: An at-will employee cannot be fired for performing an act of public good. This could include:
Filing for workers’ compensation
Whistleblowing illegal activity
Refusing to break the law on behalf of an employer
Serving in the military
Implied covenant of good faith and fair dealing: In plain English, this means employers cannot fire someone to avoid their duties as an employer, such as paying for healthcare, matching retirement contributions, or paying out a large sales commission.
Implied contracts: Implied contracts are historically hard to prove, but it means employers cannot fire an individual when an implied contract is created, regardless of whether or not a legal, written document exists. This may include a verbal promise, employer practices, language in the employee handbook, or more. Many states have limits on their duration.
Document your company policy
State clearly in your employee handbook if employees are at-will or not. Doing so can help prevent future lawsuits. Some employers go so far as to have employees sign a document acknowledging they are at-will and agree to all the conditions that come with that, including changes to their wages, benefits, and time off, to name a few, without notice.
Is at-will employment unfair to employees?
At first glance, at-will employment can surely seem unfair to employees. After all, if an employer can alter their wages, benefits, and vacation at a moment’s notice, it certainly seems in favor of the employer. The flip side is an employee can leave at any time if they don’t like the changes. But it’s important to note that most businesses want to protect their brand image and not be known for flippantly firing their workforce. Unless an employee has provided good cause for being fired, most employers will attempt to ease the transition. It could come in the form of a written warning, placing the employee on a performance improvement plan, or severance after termination.
As an at-will employee, take pride in your work and be prepared for a sudden change in employment. Keep your resume updated and know that today’s job market favors experienced, talented job seekers.