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 expanded protections under the Equal Pay for Equal Work Act of 2016, effective October 1, 2016.
Updated to reflect IRS final regulations defining 'spouse' for federal tax and benefits purposes.
Updated to reflect forthcoming prohibition of noncompete agreements with low-wage workers.
Updated to include detailed information on the forthcoming state Act to Establish Pay Equity, which strengthens existing equal pay laws.
Revised policy to reflect minor edits made as part of a regular review for compliance with the National Labor Relations Board’s opinions regarding employer policies.
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 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.
Guidance for HR on the importance of the employment at-will doctrine.