Employment At Will
What does it mean to be “employed at-will”?
It means that you are free to terminate an employee at any time, for any reason or for no reason at all. Accordingly, an employee cannot sue you for firing him unless he can articulate a limitation on your right to discharge. In most states, the limitations are narrowly tailored. For example, employers are generally prohibited from discharging employees when the discharge violates some broad public policy. That is, an employee may be allowed to sue his employer if the employee is terminated for refusing to commit a crime or prevented from complying with a statutory duty.
Of course, an employer may enter into a contract with an employee and therein voluntarily agree to limit its right to discharge an at-will employee. In those instances, the employee may sue the employer for breach of contract if the employer fails or refuses to abide by the terms of the contract. The nature of the employee’s claim will depend on the nature of the contract in question. In some instances the contract will be express (e.g., a written agreement between the parties) and in others it will be implied (e.g., an obligation that arises from an employee manual or other acts or statements made by the employer).
At will employees may also sue their employers if a statute specifically provides for a right of action. Thus, for example, an employee may sue his employer if his termination violates an applicable antidiscrimination statute, like Title VII of the Civil Rights Act of 1964.
The importance of an at-will disclaimer that employee manual
As mentioned above, an employer may inadvertently limit its right to discharge at will employees by making promises to employees in an employee manual. For example, in some states, courts have recognized the right of an employee to sue an employer when the employer fails or refuses to abide by the terms of a progressive discipline policy. These types of claims can generally be overcome if the employee handbook contains a clear statement that all employment is “at will” and that the employer is free to discharge, with or without cause.