At-will employment in the US

Did you know that in the US you can be legally fired for any reason (or no reason at all) at any time?

Employment in most US states is typically ‘at-will’, meaning an employer can fire an employee for any reason, without any warning. But, at the same time, an employee may resign from work under the same conditions. However, you can’t be let go for an illegal reason (e.g. reporting a sexual harassment at work).

To help you understand how at-will employment works and your basic rights and limitations under this law, we’ve covered everything you need to know about:

At-will employment contracts,
The different law exemptions to the general at-will employment rule,
The states limiting at-will employment,
The advantages and disadvantages of at-will employment for both employers and employees,
The reasons an employee may be fired for (including wrongful termination), and
The difference between at-will and right-to-work states.

Table of Contents

What is employment at-will?

Employment relations in most US states are considered to be at-will. But what does at-will employment mean?

At-will employment means that an employer has the right to fire an employee:

At their own convenience,
For whatever cause (as long as it does not violate state or federal laws), and
Without providing any prior notice or explanation.

Conversely, an employee can also quit their job at any time without giving prior notice (or any notice at all) or stating their reason for doing so. Since at-will employment goes both ways, both parties won’t face any legal repercussions for the termination of such employment.

At-will employment still offers some flexibility and may include specific contractual terms, allowing employers to adjust the conditions of at-will employment regarding:

Wages,
Employee benefits,
Paid time off, and
Work schedule.

Employers can also include additional clauses stating the circumstances or situations required for termination of employment.

Now that you’ve learned what at-will employment is, let’s find out which US states practice at-will employment.

🎓 Clockify Pro Tip

Interested in learning more about PTO payout laws in the US by state? Here’s a thorough guide on the topic:

PTO payout laws by state — Guide for 2023

Are all states in the US at-will?

All 50 US states, including the District of Columbia, are at-will employment states. However, some states have further limitations on top of federal laws, such as:

The public-policy exemption,
The implied-contract exemption, and
The implied covenant-of-good-faith and fair dealing exemption.

The exceptions to the at-will employment protect both the employer’s and employee’s interests in case there is any violation in place.

Let’s explore each of these law exceptions to find out where at-will employment doesn’t apply.

Public-policy exemption

In 42 US states, including the District of Columbia, the public-policy exception to at-will employment protects employees from getting fired in the following cases:

Whistleblowing (e.g., revealing harmful or illegal wrongdoing),
Practicing a statutory right (e.g., filing a workers’ compensation claim for injuries incurred at work or organizing a union),
Refusing to act against the law (e.g., not complying with an employer’s request to commit perjury at a trial), or
Acting in the public interest (e.g., joining the National Guard, serving on jury duty, or voting).

Since the public-policy is an exception to the general rule of at-will employment, employees cannot lose their job for disobeying their employer (i.e., refusing to do something illegal). If they lose their job, they have the right to sue their employer for wrongful employment termination.

However, in order to be valid, the public-policy should:

Be stated in a law (e.g., a statute or constitutional provision, government regulation or mandatory ethical rule),
Serve the public interest and benefit (e.g., antitrust laws or laws prohibiting perjury or disability discrimination), and
Be long-established at the time of employee’s dismissal (the law must exist and the policy must be explicit).

Be that as it may, both employers and employees need to abide by federal and state laws in order to avoid unlawful at-will employment termination.

Implied-contract exemption

According to the Bureau of Labor Statistics (BLS), the implied-contract exemption is issued in favor of the employee and is recognized in 37 US states, including the District of Columbia.

The implied contract may not be an actual (or explicit) written contract. Instead, the terms under which an employee may be subject to employment termination (or discipline) are usually stated:

Verbally,
Through an indefinite employment contract,
In the employer’s policy,
In the new hire handbook, or
In other written assurances.

When an implied contract exists, the employer may only fire an employee for “just cause”. This means that an employee may be fired for any sufficient reason, such as misconduct. Furthermore, some handbooks may define that an employee has a right to a warning before they can be fired. However, if the procedures and rules of conduct are presented verbally, such an agreement may be difficult to validate due to the lack of documentation.

But, even though it may be challenging to prove that there was a contract in place, an oral implied contract can still be held up in court.

The court will examine additional factors such as:

The relationship between both parties,
Employee’s duties,
The duration of employment,
The regularity of job promotions,
The employer’s promises of permanent employment, and
Whether previous agreements have been made in the company’s policy or handbooks.

Implied covenant-of-good-faith and fair dealing

The implied covenant-of-good-faith and fair dealing exception is the most substantial departure from the norm of at-will employment. The exception was introduced and recognized in the California Supreme Court in 1980, and 10 other states have recognized the importance of it.

So nowadays, implied covenant-of-good-faith applies to every employment relationship in the 11 US states listed below:

This exception to at-will employment states that the employee’s actions and employer’s decisions are also subject to “just cause.” Dismissing an employee for just cause (or just cause termination) means that an employee may only get fired for a reasonable, lawful, and sufficient reason, such as:

Serious misconduct,
Habitual negligence,
Incompetence,
Willful disobedience,
Rude or disrespectful behavior, or
Violation of company’s policies and rules.

Still, to end the employment relationship, the employer must prove that the employee’s actions were serious and did more harm than good.

The exemption further bans an employer from terminating an employee due to bad faith or malice (i.e., when the employer’s conduct in terms of employee’s dismissal is insensitive and malicious) such as:

Making false statements that would damage an employee’s reputation,
Not disclosing the exact reason for employee’s dismissal,
Dismissing an employee to avoid paying for healthcare and retirement benefits,
Firing an employee to avoid paying a commission (e.g., right before the sale is closed), and others.

All things considered, the implied covenant-of-good-faith and fair dealing implies that an employer should only terminate an employee in a fair and just manner. If the employer does not comply with the law principle (i.e., if they don’t act in good faith upon dismissal), they might have to give away compensation or additional damages to make up for the emotional distress resulting from the mistreatment.

Employment at-will states table

In the table below, you can:

Find a list of at-will employment states, and
See which at-will employment states have the public-policy, implied covenant-of-good-faith and fair dealing, and implied-contract exceptions.

State	Public-policy exemption	Implied covenant-of-good-faith and fair dealing exemption	Implied-contract exemption
Alabama	❌	✅	✅
Alaska	✅	✅	✅
Arizona	✅	✅	✅
Arkansas	✅	❌	✅
California	✅	✅	✅
Colorado	✅	❌	✅
Connecticut	✅	❌	✅
Delaware	✅	✅	❌
District of Columbia	✅	❌	✅
Florida	❌	❌	❌
Georgia	❌	❌	❌
Hawaii	✅	❌	✅
Idaho	✅	✅	✅
Illinois	✅	❌	✅
Indiana	✅	❌	❌
Iowa	✅	❌	✅
Kansas	✅	❌	✅
Kentucky	✅	❌	✅
Louisiana	❌	❌	❌
Maine	❌	❌	✅
Maryland	✅	❌	✅
Massachusetts	✅	✅	❌
Michigan	✅	❌	✅
Minnesota	✅	❌	✅
Mississippi	✅	❌	✅
Missouri	✅	❌	❌
Montana	✅	✅	❌
Nebraska	❌	❌	✅
Nevada	✅	✅	✅
New Hampshire	✅	❌	✅
New Jersey	✅	❌	✅
New Mexico	✅	❌	✅
New York	❌	❌	✅
North Carolina	✅	❌	❌
North Dakota	✅	❌	✅
Ohio	✅	❌	✅
Oklahoma	✅	❌	✅
Oregon	✅	❌	✅
Pennsylvania	✅	❌	❌
Rhode Island	❌	❌	❌
South Carolina	✅	❌	✅
South Dakota	✅	❌	✅
Tennessee	✅	❌	✅
Texas	✅	❌	❌
Utah	✅	✅	✅
Vermont	✅	❌	✅
Virginia	✅	❌	❌
Washington	✅	❌	✅
West Virginia	✅	❌	✅
Wisconsin	✅	❌	✅
Wyoming	✅	✅	✅

All US states (apart from Florida, Georgia, Louisiana, and Rhode Island) have some form of at-will employment exemption.

The state of Montana is the only state where at-will employment laws apply only during the standard 12-month probationary period of employment (unless otherwise stated at the time of employment). In other words, during this period, both the employer and the employee may terminate the employment:

Without cause,
At any time, and
Without prior notice.

After the end of the probationary period, the employee gets permanent employment status. Therefore, it’s illegal for their employer to fire them, except for “just cause” (misconduct, or any other sufficient reason stated above).

🎓 Clockify Pro Tip

Being well-informed is beneficial for both employers and employees. Check out what else is regulated by the rule of law in your state:

State Labor Laws Guides

FAQs about at-will employment

The section below contains a list of the most commonly asked questions and answers regarding at-will employment in the US.

Does at-will employment apply in all US states?

Since this is a crucial piece of information, it doesn’t hurt to repeat — all 50 US states, including the District of Columbia, apply the at-will presumption in the workplace.

Bear in mind that certain states do place specific limitations on at-will employment, as stated earlier in the guide. Additionally, there’s the case of Montana, which is the only US state where at-will employment is valid only during the first 12 months of employment (which is considered to be the probationary period).

What are the reasons an employee may be fired for?

In the US, employers have the legal right to fire at-will employees without cause. Firing without cause means that there wasn’t any type of employee misconduct preceding the employment termination.

In fact, employers can terminate an at-will employee for no reason at all without facing any disciplinary penalties (unless in case of wrongful discharge).

There are numerous legally acceptable situations when an at-will employee may be discharged from their position, including:

Economic downturn,
Cost-reduction,
Poor work performance,
Company restructuring,
Misuse of company property and resources,
Violating company policy,
Drug or alcohol possession at work, and more.

What are the main reasons for wrongful termination?

Many US states have adopted a few exceptions to the at-will employment principle. This means that firing becomes an illegal act when an employer acts against the law.

For example, employment termination is considered wrongful if the employee performs any of the following actions:

Reports a violation of safety protocol in the workplace,
Reports illegal workplace activities (such as an accounting fraud),
Refuses to act against a federal or state law,
Takes time off from work to testify in court or jury duty,
Files a workers’ compensation claim,
Discloses an employer’s practice of refusing to pay an employee’s sales commission, and more.

So, if you have evidence that you’ve been unlawfully fired (for any of the above mentioned illegal reasons), you may file a complaint with the Equal Employment Opportunity Commission (EEOC) within the next 180 days of employment termination.

What are the advantages of at-will employment?

At-will employment offers several advantages both for employers and employees.

Below, we’ve listed some of the advantages that positively affect the employer:

The employer has more flexibility in the employment contract (e.g., they may fire the employee at their own convenience — unless in the above-mentioned illegal cases),
The employer can change the employment terms to meet the company’s needs (e.g., changing the employee’s job duties, salary, and benefits), and
The employer can reduce workforce costs in difficult economic times (e.g., cutting staff costs when there is lower demand for the company’s goods or services).

At-will employment also comes with several advantages for employees, such as:

The employee has higher career freedom (i.e., they may leave the company whenever a better job offer comes up),
The employee can be rewarded based on their work performance despite the duration of employment (unlike a CBA which allows employee’s promotion based on seniority), and
The employee is still guaranteed job security in certain situations (e.g., they can’t get fired for reporting any illegal activities conducted by the company).

What are the disadvantages of at-will employment?

Here are some disadvantages of at-will employment for employers:

Higher employee turnover (employees suddenly quitting without prior warning makes it more challenging to find a replacement),
Difficulty in attracting new hires (due to the lack of job security and long-term benefits), and
More workplace conflict (employees may fear losing their job at any time just because the company encourages competition among coworkers).

Taking a job as an at-will employee is also associated with several disadvantages, including:

Less job security (employees feel stressed about losing their job all the times),
Less employee protection (employee’s actions may only be protected by a public-policy or other exemption), and
Less teamwork (team collaboration may be challenging because everyone would work for their own benefit, instead of the group’s).

What is the difference between at-will and right-to-work states?

The “right-to-work” doctrine is not the same as the “at-will employment” doctrine.

As stated above, in employment at-will states, both the employer and employee can terminate the employment:

At any time,
For any/no reason, and
Without any consequences.

On the other hand, a right-to-work state is a state where employees cannot be obliged to engage in labor organizing and union membership as a condition of employment. To put it simply, they’re allowed to work for an employer without joining the union or a collective bargaining unit. Their decision to be or not to be a union member cannot in any way affect their employment conditions.

The union can still negotiate the contract’s terms on his/her and other employee’s behalf. This means that even non-union employees can still get the same salary and benefits the union negotiates for its members.

Some states are not “right-to-work states”, such as California, and therefore may require job applicants to join the union as a condition of employment.

However, some states, such as Florida, can be both right-to-work and at-will. This means that your employer can still fire you for any legal reason, unless you decide to become part of the union. The right-to-work law does not change the at-will employment relationship.

At-will employment states — conclusion and disclaimer

We did our best to include all the important information regarding at-will employment in the US in our comprehensive guide.

However, if you’re in need of additional information, you can take advantage of the official links we’ve provided right at the end of this guide.

Please note that this guide was written in Q2 of 2023, so any forthcoming adjustments may be omitted from this guide.

The information included in this guide is provided for informational purposes only and should not be interpreted as legal advice on any subject matter. We strongly advise you to reach out to the relevant institutions and/or certified representatives before bringing a case to court.

Clockify is not responsible for any losses or risks incurred, should this guide be used without further legal guidance.

SOURCES FOR THE TABLE:

At-will employment by state — Guide for 2023