Most employment is considered to be "at will." At-will employment provides that a person hired for an indefinite term may leave or be dismissed from employment at any time for any reason, absent an agreement to the contrary.

At-will employment may be viewed as a loose contractual relationship in which the employee agrees to perform work under the employer's direction and the employer agrees to pay the employee at a certain rate. Either party may propose changes to the terms of the employment relationship at any time.

Implied Contracts

Although most workers do not have an employment contract, implied contracts may arise to provide otherwise at-will employees with certain protections. In some cases, statements made in Employee Handbooks or manuals may create implied contractual obligations in favor of an employee.

If a handbook includes a clear disclaimer stating that employees have been hired as at-will employees and that the handbook is not a contract between the employer and its employees, courts will generally not find an implied contract. If the language of a handbook, however, makes promises regarding the employment, an implied contract may be found as to those promises, even if the handbook includes a clear disclaimer. An employee will likely be required to show that he or she read the handbook in order to assert a claim for the breach of an implied contract.

State and Federal Requirements

A number of federal and state laws make it illegal to discharge an employee for specified reasons. Some prohibit the discharge of employees who act pursuant to a law, whether the law requires the action or merely permits it. For example, employees are protected by federal law from discharge for exercising their rights under the Employee Retirement and Income Security Act, the Occupational Safety and Health Act, the Air Pollution Control Act, the Water Pollution Control Act, the Labor-Management Relations Act, the Fair Labor Standards Act and other federal laws. A federal law and a number of state laws, called "whistleblower" laws, also make it illegal for employers to take adverse actions against employees in retaliation for the employee reporting violations of law in the workplace. Similarly, certain state laws prohibit discharge of an employee for absence because of jury duty, entering the military service, wage garnishment, refusal to submit to polygraph testing, testifying in criminal proceedings or filing a worker's compensation claim.

Anti-Discrimination Laws

There are laws that prohibit discharge based on an employee's personal characteristics. The federal civil rights laws, for example, declare it an unfair employment practice for an employer to discharge a worker because of that individual's race, color, religion, sex or national origin. Age discrimination, including not only the discharge of an employee but also the reduction of his or her wage rate because of age, is also prohibited. Furthermore, certain employers are prohibited from discriminating against disabled individuals in employment solely on the basis of their disability.

Violations of Public Policy

Even in the absence of a law, employers are generally forbidden from taking adverse actions against at-will employees where those actions violate established public policies. In many states, for example, it is a public policy violation to fire an employee for refusing to violate the law. Therefore, an employee fired for refusing to testify falsely on behalf of his or her employer can bring a lawsuit against the employer for wrongful discharge.

Legal Terminations

If an employee is an at-will employee, the employer can legally terminate the employee's job in most situations, including when:

  • The employer downsizes or reorganizes the business
  • The employee irritates the employer
  • The employee violates company policy
  • There is a natural disaster and the employee has to spend his or her time recovering from the disaster
  • The employee has successfully completed a probationary period (unless the employer promised the employee a job upon successful completion)

Questions for Your Attorney

  • If my employee handbook has a disclaimer at the beginning of the handbook stating that the employee has been hired as an at-will employee and that the handbook does not constitute a contract with the employee, can I still sue my employer for violating the discharge policy as stated in the handbook?
  • Do the anti-discrimination laws create a contract with my employer?
  • Can my employer require me to lie on the witness stand or lose my job?