Overview: The employment at-will doctrine provides employers with critical flexibility when it comes to terminating employees for disciplinary issues, poor performance, or in connection with layoffs or restructuring. However, the doctrine is interpreted and applied differently in the 50 states and the District of Columbia.
Common exceptions are made for employees retained by an employment contract, employees protected by implied contracts, terminations that would violate public policy, terminations made in bad faith and other employment-related claims like intentional infliction of emotional distress, defamation and fraud.
Given the myriad exceptions, it is imperative that employers take steps to preserve the at-will relationship. HR professionals should ensure employees sign and acknowledge at-will disclaimers, craft and distribute policy manual or employee handbook provisions detailing the employment at-will doctrine, and educate supervisors regarding the risks of promising employment tenure or certain grounds for termination. In that regard, the employment at-will doctrine is only as powerful as the employer's program to implement it.
Trends: The landscape of wrongful termination law, including the exceptions to the employment at-will doctrine recognized in each state, is constantly evolving with notable recent cases in North Carolina and Texas. Given these developments, it is crucial that employers monitor the evolution of the employment at-will doctrine in their state(s) so that when it comes time to make the difficult decision of terminating an employee, they are fully informed as to the possible implications.
Author: Michael Jacobson, JD, Legal Editor
Updated to include information on Swindol v. Aurora Flight Sciences Corp., which concerns a statutory equivalent of a public policy exception to the employment at-will doctrine.
Updated to include information on Swindol v. Aurora Flight Sciences Corporation, which confirmed a statutory equivalent of claims for wrongful termination in violation of public policy.
Updated to reflect the forthcoming state Act to Establish Pay Equity, which strengthens existing equal pay laws.
Updated to include information on Gerardot v. Life Care Centers of America, which concerns wrongful termination in violation of public policy.
Updated to reflect information on Johnston v. William E. Wood & Associates, which concerns required 'reasonable notice' when terminating an at-will employment relationship.
Updated to reflect state Supreme Court ruling prohibiting courts from modifying the terms of noncompete agreements.
Updated to reflect amendments to equal pay law expanding coverage to employers that employ two or more employees, effective July 20, 2016.
Updated to include requirements regarding physician restrictive covenants, effective July 12, 2016.
Updated to reflect unlawful practice of prohibiting employees from discussing wages, effective June 30, 2016 and forthcoming discrimination protections based on family responsibilities and reproduction health decisions, during hiring.
Updated to reflect requirements regarding the enforcement of noncompete agreements, effective July 1, 2016.
Guidance for HR on the importance of the employment at-will doctrine.