Where there's a will (to work), there's a way (for employers to protect themselves)
Employment at will is a term of employment in which the employee agrees to work "at will." With this type of employment relationship, the employer or the employee may terminate the relationship without notice, at any time and for any reason not prohibited by law.
Employment at will is commonplace in the United States, affecting workers in nearly every state. The same at-will principles apply whether the employer is a nonprofit or for-profit organization, large or small.
Make at-will status clear
Federal law generally presumes that employees are at will by default, unless otherwise stated. In fact, Montana is the only state without an at-will employment assumption. The burden rests with employers to make at-will status clear, however.
Similarly, it's your responsibility as an employer to maintain at-will status. The most direct way to do this is through an employee handbook that clarifies which employees have at-will status and which don't (if any) — including during probationary periods. Train managers in your organization to know the difference and to clearly communicate it to employees.
Know the rules
Legally, at-will employers need no cause or grounds to terminate an employee. However, employers still can't fire employees on grounds of discrimination. If you fire an employee, you may have to demonstrate that the employee isn't being fired for a factor such as race, sex or sexual orientation.
Employers must also consistently and clearly inform employees through documents and protocols that the probationary period doesn't nullify the at-will relationship. Reasons for the probationary period must be documented with proper steps to evaluate employees suitability for the job.
In Montana — again, the only state that doesn't presume at-will status by default — workers are technically at will only during an initial probationary period. Afterward, employees can't be dismissed without cause.
Know the exceptions
There are three general exceptions to employment at will:
- Public policies. A major exception to employment at will observed in some states is the "public policy" exception, which protects employees from retaliation should they do something to which the employer objects — such as filing a workers' compensation claim or refusing to do something illegal or unethical.
- Implied contract. In some states, employers may unwittingly undermine their at-will status by suggesting that employees aren't working at will. This is known as the "implied contract" exception. An implied contract means that the employer has said or done something to suggest that an employee isn't employed at will, but rather has been given some assurance of guaranteed employment.
- Covenants of good faith. States that recognize the "covenant of good faith" exception prohibit terminations made in bad faith or motivated by malice. In these states, termination requires a documented just cause (such as gross misconduct).
States that don't observe the public policy exemption also, for the most part, don't recognize the implied contract exception. In Missouri and Massachusetts, however, employees receive public policy protection but not implied contract protection.
To verify the at-will employment laws in your state, check with your state Department of Labor.
This article draws on the expertise of Grace Davies, a Minneapolis-based attorney with special interest in product liability, medical malpractice and employment discrimination.
Nolo: Employment at will: What does it mean? by Lisa Guerin
Nonprofit Risk Management Center: Employment practices: What is "employment at will?"
The Chronicle of Philanthropy: How to legally — and humanely — dismiss nonprofit employees by Alicia Abell (2003)
National Conference of State Legislatures: The at-will presumption and exceptions to the rule
Monthly Labor Review: The employment-at-will doctrine: three major exceptions by Charles J. Muhl (2001)