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 a state supreme court ruling on arbitration agreements.
Updated to include FAQs released by the State providing guidance on nondisclosure agreements and arbitration clauses.
Updated to reflect law limiting the use of employment contracts for certain claims, effective October 1, 2018.
Updated to reflect information on a state supreme court ruling concerning noncompete agreements.
Updated to reflect extension of discrimination protections based on sexual orientation and gender identity.
Updated to include amendment to the standard of proof for noncompete actions, effective July 1, 2018.
Updated to reflect law limiting the use of employment contracts for certain claims, effective July 1, 2018.
Updated to reflect law limiting the use of nondisclosure agreements, effective May 15, 2018.
Guidance for HR on the importance of the employment at-will doctrine.