Definition:
At-will employment refers to an employment relationship in the U.S. where either the employer or the employee can end the relationship at any time, with or without cause or notice, unless an agreement specifies otherwise.
History:
Tracing its roots to Horace C. Wood’s 1877 treatise on master-servant relations, at-will employment evolved as the default rule in most of the United States, marking its prominence in U.S. employment law.
Exceptions:
Despite its flexibility, several exceptions to the at-will doctrine exist:
- Public Policy Exception: Termination is prohibited if it breaches the state’s public policy or a specific statute.
- Implied Contract Exception: Oral or written promises by employers about job security can form an implied employment contract.
- Covenant of Good Faith and Fair Dealing: Recognized by few states, this posits that employers must treat employees fairly, including not terminating to dodge obligations like bonus payments.
Advantages:
For Employers:
- Flexibility in workforce adjustment based on market dynamics.
- Lowered legal risks related to breach of contract.
For Employees:
- Ability to leave at will without contractual restrictions.
- Potential for diverse job roles.
Criticism:
Detractors of at-will employment note:
- The potential for job insecurity.
- The risk of unjust or arbitrary job terminations.
- The potential misuse to bypass fair labor standards.
Comparison to Other Employment Systems:
Many countries favor employment contracts, which typically necessitate a valid reason for termination and might mandate notice or severance pay, contrasting with the U.S. at-will model.
Q&A on At-Will Employment:
- Q: Can an at-will employee be fired without reason?
A: Yes, unless it violates an exception, such as public policy or an implied contract. - Q: Do at-will employees receive benefits like health insurance?
A: It depends on the employer; being at-will doesn’t inherently affect eligibility for benefits. - Q: Can an employer change the terms of employment for an at-will employee without notice?
A: Generally, yes, unless there’s an implied contract or other specific limitation in place. - Q: Are all U.S. employees considered at-will?
A: No, union members, government workers, and those with employment contracts may not be at-will. - Q: Can an at-will employee quit without notice?
A: Yes, although it’s customary to provide two weeks’ notice.
Examples of At-Will Employment Situations:
- Business Downturn: A company facing financial troubles can lay off at-will employees without prior notice.
- Job Mismatch: An employee who feels the job isn’t a good fit can resign immediately without any repercussions.
- Management Changes: New management can choose to replace existing staff with their own team without needing a specific reason.
- Role Redundancy: If a company decides a particular role is no longer necessary, they can terminate the at-will employee occupying that role without cause.
- Immediate Resignation: An employee, upon receiving a better job offer, can quit on the spot without contractual penalties.
Conclusion:
At-will employment, with its advantages and drawbacks, remains integral to the U.S. labor landscape. Its efficacy often rests on its practice and the broader work culture.
This summary offers a snapshot of at-will employment in the U.S. as of 2022. State-specific laws can vary and might evolve over time.
Find this article useful? Fine more like it in our Top 50 HR Terms Every HR Professional Needs to Know series.
Article Written by Jacob Peebles, with research and assistance from chatgpt