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What Your Business Should Know About At Will Employment

By Neetal Parekh | Last updated on

At will employment means that a company can terminate an employee relationship for no cause or any cause, so long as the basis of termination is not illegal under federal or state law.  On the flip side, the employee can also leave the company for reason or no reason.

The at will employment doctrine gives companies and employees broad roles in making employment decisions.  For small businesses, at will employment has its definite advantages and disadvantages.

Here are some things your business should know about at will employment:

  1. Hiring an employee as "permanent" does not mean the employee cannot leave.  It usually just means that the position is not seasonal or temporary.
  2. Determining whether employment is at will is determined by state contract law.  Most states feature at will employment.
  3. Employers do not have to give fired employees notice or any kind of hearing in at will employment states.
  4. Employees do not need to give companies two-weeks notice before leaving.  Though giving some notice is generally customary.
  5. Neither the employee or employer terminating the work relationship must give a reason for the termination.

The broad rules could be unfair or create hardship, so the government has established exceptions to at-will employment.  

Small businesses cannot fire employees:

  • If the reason for firing violates public policy.  An example of this is firing an employee for reporting questionable or illegal activity.  Such reporting is protected by various "whistleblower" statutes.
  • If the employee is fired on the basis of discrimination or retaliation.  Race, color, religion, sex, national origin, age, and disability are federally-protected classes, and discrimination on the basis of someone being in one of those classes is illegal.  Retaliating against an employee for reporting a discrimination complaint or sexual harassment complaint is also against the law.
  • If a contract, implied or agreed-upon, has established another understand or set of procedures.

The doctrine of at will employment guides a business or employee on what their rights are in terminating an employment relationship.  However, it is also good to supplement any firing decisions with common sense and courtesy.  Small businesses often rely on the expertise and dedication of their employees and likewise can suffer when employees work against the company.

So use at will employment to bring on and retain quality employees, and let go of employees that are detracting from the business.  And be sure to abide by state and federal regulations to avoid future employment claims and to build a reputation of fairness.

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