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At-Will Employee FAQ's

What does at-will employment mean?

Many people are surprised to learn, whether from an employment contract or employee handbook, that they are an "at-will employee". But what does being an at-will employee mean? Being an at-will employee means that your employer can terminate your employment at any time, for any cause - with or without notice. An employer has every right to walk up to an at-will employee and say, "I don't like that your favorite color is purple. You're fired." There are very few, if any, remedies for you, unless your employer did something to violate your employee rights or broke labor laws.

All states but one have adopted laws that protect the employer in an at-will setup. That is, the employer does not have to have good cause to terminate your employment. Most employers take advantage of this protection. Unless you signed some sort of employment contract that states you cannot be terminated without good cause, it is assumed that you are an at-will employee. Montana is the only state that protects employees from being terminated without good cause, as long as they fulfill a probationary employment period.

Many times, an employer will come right out and say that you are an at-will employee. On the contrary, employees have won cases where their employers told them they could only be fired for good cause. Even statements as lighthearted as, "You'll always have a place here, as long as you keep up the great work," have been held to mean that the employer does NOT follow the at-will employment law. When statements like this are made, especially if made repeatedly, or were the reason you accepted the job, your employer may not be able to fire you at will.

If you are told, however, either during the hiring process or after accepting the job, that you are an at-will employee, your employer has every right to rely on that statement in a legal proceeding, as proof that you may be fired without cause.

What is an employment contract, and how does it affect me?

An employment contract is an agreement between the employer and the employee that outlines the basic details of the job. So long as the employee signs it, the contract is binding. There are various types of employment contracts. Even within one company, different employees may be asked to sign different employment contracts, based on each employee's duties. Sometimes there is no written contract, but the contract is implied through an oral understanding or simply by the behavior of the employer and the employee.

The typical employment contract includes the employee's start date, salary, and benefits. Other common elements that may or may not be on your employment contract are

  • confidentiality agreements, where the employee promises not to share any information on secrets, processes, formulas, data, machinery usage, or how business is conducted. Theconfidentiality duty typically extends beyond the termination of employment
  • non-compete agreement, where the employee agrees that for a specified time after employment ends, the employee will not work for any competing company or engage in any business that competes with the employer and will not steal any of the employer's customers
  • ownership of inventions, where the employee who invents as part of their employment agrees that anything she invents within the scope of her employment belongs to the employer
  • exclusive employment, where the employee agrees that she will not work for any other company in the same or similar type of business while employed under the contract
  • no additional compensation, where the employee is not entitled to any additional compensation should she become elected as an officer or serve on a committee
  • termination, where either party may terminate the employment for any reason--even if the employee becomes unable to perform the work due to illness or injury
  • arbitration, where the employee agrees to use arbitration or mediation to resolve any issues with employer, rather than going to court
  • choice of law, where the agreement asserts that should any dispute ever arise in a lawsuit, it will be governed by the laws of a particular state, regardless of where it is filed

My employer is asking me to sign all kinds of documents. What do they all mean?

It is common to expect to read and sign numerous documents when you start your job. These documents often include company policies, applications, employee handbooks, at-will employment agreements, and job evaluations.

Employers are almost always certain to include that their employees are at-will employees. Look through these documents at your job and see if any of them mention that you are an at-will employee. Even if the documents do not use the term "at-will," any language implying that your employment can be terminated at any time means the same thing as "at-will". Chances are it is written somewhere.

Even if you're employer has not written it in any of the documents, you are probably an at-will employee, unless the documents state otherwise. If you signed any of these documents that state that you are an at-will employee, then you have agreed you understand you can be terminated at any time.

Though it's rare, some employers do have written policies that require good cause to terminate an employee. Usually, these types of documents include an exhaustive list of causes for termination. If the policy does not include such a list, they might spell out certain other job protections that you have. Even in a state that follows at-will employment laws, if your employer has adopted protective policies, you are entitled to them.

Do I have to sign the at-will agreement?

A lot of times, employers will ask you to sign an at-will agreement, among the endless stack of other documents to sign. This is to ensure that they have secured their right to terminate at will. Sometimes this is its own separate document. Other times, it will be a section of another document, such as an employment application, an employment contract, an employee handbook acknowledgment form, or even an employment offer letter.

Theoretically, you do NOT have to sign the at-will agreement. Courts have consistently held that the employer can terminate you or even refuse to hire you if you refuse to sign the at-will agreement, however. Most people sign it. Just because you have signed it does not mean that your employer WILL terminate you on a whim. Good employers know that doing so would be wasteful, and that firing people abruptly and without good cause serves no purpose.

Instead, they typically want to work with the employees to solve any problems or issues with the employment. A very popular method of doing so is using a performance improvement plan. This is basically a document that asks the manager to fill in what a certain employee needs to improve by a certain date.

Take caution when signing at-will employment agreements if you relied on your employer's comments about guaranteed continuous employment when you accepted the job. For instance, if you have an interview and the employer promises to give you a full year to learn the ropes and you can't be fired during that year. This sounds like a great deal for you, and for this reason you take the job. Do not sign an at-will agreement in this instance. If your employer attempts to terminate your employment within that year and you take legal action, you will be able to use your employer's one year promise against her. If you sign that at-will agreement, however, holding her to her promise goes out the window. The courts will rely on the at-will agreement to determine that you were an at-will employee.

If you find yourself in this situation, ask your employer about the discrepancy between her guarantee and the at-will agreement. If the employer decides to uphold the earlier promise, ask that it be put in writing. If the employer changes her mind and refuses to honor the earlier promise, you may want to consult an employment lawyer. This is especially true if you resign from another job on the reliance of the new employer's broken promise.

How do I know if I have a claim for wrongful termination?

There are actually many labor laws an employer can break in wrongfully terminating an at-will employee. Just because you are an at-will employee, does not give your employer the right to be discriminatory. As discussed below, state and federal law prohibits discrimination based on several categories, including race, religion, gender, age, national origin, disability, pregnancy status, and, in many states, sexual orientation or gender identity. If your employer has done anything to discriminate against you, she could face serious legal trouble.

Not all wrongful termination claims are based on discrimination, either. If you have an employment contract with your employer, even if it is an implied contract, and it is terminated prematurely, then your employer breached the contract, and you have a legal claim. In this case, you may be able to bring a claim for wrongful termination or breach of contract.

If your employer terminates you out of retaliation because you exercised some right, such as reporting the company for public health and safety violations or making a harassment claim, you may have a wrongful termination claim. Likewise, if your employer terminates you for refusing to perform an illegal act, such as doing construction at a designated height without safety ropes, you may have a wrongful termination claim. If you take off work for a purpose protected by law, such as voting or military service, and your employer terminates you, you may have a wrongful termination claim.

Damages for wrongful termination can include back pay, a promotion, reinstatement, front pay, compensatory damages, reasonable accommodations, injunctive relief (forcing the employer to do or stop doing something), punitive damages, and attorney's fees. It is best that both the employee and the employer hire an employment lawyer.

What are my at-will employee rights?

As explained above, even at-will employees have rights. State and federal laws provide protections for certain categories and situations, even in at-will employment. These categories include race, religion, national origin, disability, pregnancy status, age, and gender. Some states even protect against employment discrimination based on sexual orientation and gender identification.

Discrimination can come in many forms. A common misconception is that discrimination laws protect everyone but white, middle-aged, men. This is not true. If you are discriminated against because you are white, you are protected under the race class. If you are discriminated against because you are a certain age, whether young, middle-aged, or mature, you are protected under the age class. If you are discriminated against because you are a man, you are protected under the gender class. These labor laws exist for a reason; if you are discriminated against based on any of these categories, report the discrimination to human resources. If this does not alleviate that situation, consult an employment lawyer.

You are also protected against retaliation. For example, if you complain about illegal activity like discrimination, harassment, or health and safety violations in the workplace, your employer cannot retaliate by terminating your employment, suspending you, or reducing your hours. Similarly, you cannot be terminated for exercising your right to take family leave, medical leave, military leave, to take time off to vote, or to serve on a jury.

Next Steps
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