At-Will Employment States: What You Need to Know in 2023

What is At-Will Employment?

At-will employment is a doctrine in labor law that allows employers and employees to terminate their working relationship at any time, for any reason, with or without cause or notice. This doctrine stands in contrast to employment contracts, which are based on an agreement between employer and employee and require the employer to provide specific notice or cause for termination.

At-Will Employment States in 2023

At-will employment is the law in most states in the United States. Currently, 48 states recognize at-will employment as the default rule for employment relationships. The two exceptions are Montana and Louisiana, which have statutes that limit an employer’s ability to terminate employment without cause. In Montana, employers must provide cause for termination. In Louisiana, employers must provide just cause or good faith reasons for termination.

Exceptions to At-Will Employment

There are several exceptions to the at-will employment doctrine. First, an employee cannot be terminated in violation of a statute, such as Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on certain protected characteristics. Second, an employee cannot be terminated in violation of an employment contract, such as a contract of employment or collective bargaining agreement. Third, an employee cannot be terminated in violation of public policy, such as for refusing to perform illegal acts. Finally, an employee cannot be terminated in violation of an implied contract, such as an implied promise of job security.

Implied Contracts and At-Will Employment

Although at-will employment is the default rule in most states, employers may create an implied contract with an employee. An implied contract can arise when an employer makes statements or provides benefits that lead an employee to reasonably believe that his or her job is secure. For example, an employer’s statements that an employee’s job is secure or that the employee will be employed for a certain period of time may be sufficient to create an implied contract.

Implied Covenants of Good Faith and Fair Dealing

Many states recognize the implied covenant of good faith and fair dealing in at-will employment relationships. Under this doctrine, an employer cannot terminate an employee in bad faith or for an arbitrary or capricious reason. This means that an employer must have a legitimate business reason for terminating an employee and must not terminate an employee for a reason that is contrary to public policy. For example, an employer cannot terminate an employee for refusing to perform an illegal act.

Wrongful Termination Claims

If an employer terminates an employee in violation of an employment contract, statute, public policy, or implied contract, the employee may bring a claim for wrongful termination. A successful wrongful termination claim may entitle the employee to damages such as back pay and other compensation. Employees should consult an attorney to determine whether they may have a valid wrongful termination claim.

Conclusion

At-will employment is the law in most states in the United States. Employers may create an implied contract with an employee, and many states recognize the implied covenant of good faith and fair dealing. If an employer terminates an employee in violation of an employment contract, statute, public policy, or implied contract, the employee may bring a claim for wrongful termination.