Employment-at-Will Does Not Mean What You Think It Means

“I live in an at-will state, so there’s nothing I can do, but…” I see this phrase, or one similar, all the time. But at-will doesn’t mean it’s a free-for-all when companies want to fire someone. Here’s what you need to know (as an employee or an employer).

What is at-will employment?

The simple version is that employees can quit at any time for any reason or no reason, and companies can fire employees at any time for any reason or no reason. There are, however, limits to this that are important. People get caught up in the plain language and forget that there are both legal protections and company policy protections in place.

Limits on employees

Realistically, an at-will employee can walk out the door right now. They can walk away in the middle of the busy season. They can say something rude to a customer, throw their name tag on the floor, and head out the door if they want to. They can ghost an employer. And the employer still has to pay them for all hours worked, and if it’s an exempt employee, for the whole day.

The employer can opt never to hire the person again, give a bad reference, and complain, but there is no legal obligation for the at-will employee to provide any notice.

Companies can set up some consequences, such as you won’t get your unused vacation paid out, or you won’t be eligible for rehire if you don’t give two weeks’ notice. But, there are limits around that. In some states, like California, vacation is considered earned income, and companies have to pay it out.

Employees can quit for whatever reason they want. They can quit because they don’t want to work with a person of a certain race. They can quit because they refuse to work for an older boss. They can quit because there are too many people speaking another language at the office. All of those things we find offensive are perfectly legal reasons to quit. And just as well–you don’t want to force someone to stay at work in those situations.

What employment-at-will means for employers

While it is the same phrase as for employees, how it plays out is entirely different. Employers can fire a person for any reason or no reason as long as that reason isn’t prohibited by law.

So while an employee can say, “I refuse to work with [racial slurs]!” an employer cannot fire someone based on race. Title VII of the civil rights code protects workers at companies with at least 15 employees based on race, color, religion, sex, and national origin. The Supreme Court is currently deciding whether sex includes gender identity and sexuality, but I would advise you to act as if it does.

Later laws protected the disabled (ADA), people over 40 (ADEA), and pregnant women (Pregnancy Discrimination Act). State laws can provide further protections, as Colorado, has done, prohibiting termination for lawful activities undertaken outside of work.

Sometimes people say, “I can’t fire her; she’s in a protected class.” They usually mean that the employee in question is a minority, or disabled, or pregnant. However, straight white males are also in a protected class. You can’t terminate because of race, not just because of minority status.

Employers often put additional restrictions on themselves–and courts are pleased to see this. This is generally a policy of progressive discipline. For instance, first, you give someone a verbal warning, then a written warning, and then terminate the employee if the behavior doesn’t change.

This doesn’t mean you always have to follow this. If an employee punches out a customer, you can fire immediately without going through the entire program of progressive discipline.

The reason courts like to see documentation and consistent procedures is it shows that you didn’t fire the person for an illegal reason. If you just show up on a Tuesday and fire a male worker and keep the female worker performing the same job at the same level, you’ll be hard-pressed to prove that you didn’t fire him because of gender. What other reason could there be?

So, while at-will employment is the law, in practical terms, it doesn’t exist. Employees have some legal protections, and employers often provide additional protections.

Who is not at-will?

Forty-nine states and the District of Columbia have at-will employment, but Montana does not. So, if you’re sitting in Montana, you can ignore this and consult with a local HR expert on how you can terminate an employee.

Employees who have a contract are also not at-will. This is generally limited to people in unions, where the terms for termination are spelled out, and executives. Those golden parachutes are usually part of a contract, which is why executives can get fired and leave with a nice vault of cash.

Most American jobs don’t have contracts. Employers can make changes to employment at any time, and it’s legal as long as they give proper notification and follow all applicable laws.

If there is at-will employment, you still need to check with an employment lawyer

Did you know that obesity is a protected characteristic in Washington State? Did you know that 29 states plus the District of Columbia have protections for smokers? Is your state one of them? What about medical marijuana usage? Can you legally fire someone who uses marijuana?

You probably don’t know all the laws in your state and city. It’s hard enough to keep on top of federal law. And if you operate across state lines, it becomes even more complicated. Consult a local attorney before terminating.

Even terminations that seem cut and dried are best to run before an employment attorney just for double-checking, You’re firing Karen for poor performance–a perfectly legal reason. But, your attorney may point out that Karen filed a sexual harassment complaint six months ago. Is this retaliation?

In other words, it’s a lot cheaper to consult with an attorney before conducting a termination then it is to face a lawsuit when you haven’t dotted your i’s and crossed your t’s properly.

At-will employment isn’t completely dead, but it’s not the firing free for all that employees (and managers!) often think it is.

This originally appeared at Inc.

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9 thoughts on “Employment-at-Will Does Not Mean What You Think It Means

  1. Actually, the Supreme Court already has decided that “sex” includes sexual orientation and gender identity. In the gay marriage case, they declared that discrimination based on sexual orientation is discrimination “on the basis of sex.” Likewise, in a Title VII case brought by a transsexual employee, they found that her being fired on the basis of transsexuality was discrimination based on her sex. The EEOC has, traditionally, taken the position that sex discrimination includes discrimination based on sexual orientation and transsexual status. There’s simply no longer any upside in taking a contrary legal position.

  2. This is one of the best summaries of At Will that I have seen.

    Thanks so much for putting it up.

  3. Speaking of at-will, what are your thoughts on the hospital system in Wisconsin that got an injunction to keep some of its interventional radiology staff from quitting and taking jobs at a different hospital? There is no formal employment contract or noncompete agreement but the staff is literally not allowed to quit and has to continue showing up at work according to a judge.

    1. It’s a little subtler than that, from what I’ve read. The staff in question are the 24/7 on-call staff for the only emergency room certified to deal with strokes, and they all gave notice at the same time, which would a) seriously compromise the service to people who may die without it, and b) disqualify them for certification (until they hire replacements, which will take a while).

      And the ruling wasn’t that “they can’t quit,” it was that one doctor and one nurse have to be available or on call to meet the requirements for the certification, until more staff is hired.

      (The counterpoint is that – according to the staff – there’s no attempt going on to hire those replacements. Neither side can be viewed as without bias. The real issue seems to be that they got better – *much* better – offers from a competitor, and took it.)

    2. My understanding is the hospital loosing the staff filed an emergency injunction to prohibit the second hospital from hiring the staff. This does not solve the staffing problem since the injunction does not require the staff to go back to their old jobs, only that they cant start their new ones. So now both hospitals are understaffed. I also learned the staff approached hospital management to see if they could improve their working conditions and compensation. The requests failed so they took better jobs. Proper notices were given and again management did nothing. They are due back in court today.

  4. Then there are tenured faculty members. Those however do fall under contracts, I believe. With tenured faculty members, you can fire them but it does take a good amount of work and documentation.

    1. It varies from university to university. For the University of California, for instance, it requires a vote among tenured staff, with the majority of the votes favoring termination. And in some cases, that can be a *very* hard sell, no matter how egregious the reason. (Such as Ricardo Hector Asch, of UCI fertility clinic scandal fame, who did lose his tenure – while he was an international fugitive on criminal charges for mail fraud and tax evasion. The vote, in that case, was just *barely* over 50%, despite that.)

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