At-will employment states: Everything employers need to know

At-will is an employment practice allowing an employer to terminate an employee and an employee to quit for whatever (but legal) reason at any time. It is widely applied across the US. Employers in at-will states enjoy more flexibility in managing business expenses and creating workplace conditions that align with their business needs. 

In the following text, we'll explore at-will employment rules, fire at-will states, the regulative framework of at-will employment across the US, and more.

What is at-will employment?

At-will employment refers to an employer-employee relationship in which both parties have the right to terminate employment without providing the reasons for termination. 

This means an employer can fire an employee without notice and for any reason (or no reason) if it doesn't violate state or federal law (such as anti-discrimination or retaliation protections). Employees have the right to do the same, meaning they can quit without notice or explanation and whenever they want. 

What states are at-will employment states? 

In the US, at-will employment principles are used to varying extents nationwide. We have chosen ten states to illustrate how at-will functions in practice. 

California

Under the California Labor Code, employment without a specific term is "at will," meaning either employer or employee can terminate it without notice or reason at any time unless there's a contract stating otherwise. 

If a verbal or written contract limits termination to "just cause," the at-will provision doesn't apply. Even in at-law agreements, an employer cannot terminate an employee for illegal reasons, such as retaliation or discrimination.

New York

In New York, both employers and employees can terminate employment at their convenience for any reason (or no reason at all). However, New York has strong labor laws prohibiting employers from firing an employee for discriminatory reasons or in retaliation for filing claims related to safety or wage issues. 

Texas

In Texas, at-will has been in effect for over a century. If an employer decides to fire an employee or an employee wants to resign, both parties can do so whenever they want for any reason unless there is a contract specifying otherwise. However, even in at-will employment, terminations can't be for unlawful reasons, such as discrimination or retaliation.  

Florida

In Florida, an employment relationship can be terminated by either the employer or employee without a particular reason as long as it is not discriminatory. However, the difference between at-will in Florida and the majority of states is that in Florida, employers are not limited with exceptions to at-will when deciding whether to terminate an employee. 

Illinois

An employee can quit their job for any reason, and an employer can terminate an employee for any cause unless it is based on discrimination or retaliation. For instance, a wrongful discharge would be when employees get fired because they refuse to participate in illegal activities or are fired for taking actions protected by public policy. 

Georgia 

In Georgia, employees can be terminated at any time, with or without a cause, as long as the cause is not legally prohibited. For instance, the Georgia Fair Dismissal Act sets guidelines and procedures for terminating employees in public education. In Georgia, much like in Florida, exceptions to at-will don't apply. 

Pennsylvania

In Pennsylvania, workers are considered at-will employees, meaning they can be fired for any reason unless their employment contract specifies otherwise. However, employees cannot be discharged for unlawful reasons, such as discrimination, or in retaliation for taking protected medical leave under the Family and Medical Leave Act (FMLA).

Ohio

Suppose there is no written contract or collective bargaining agreement. In that case, it is legal for an employee or employer in Ohio to terminate the employment for any reason not contrary to the law. That's because, as in many other states, Ohia follows the at-will doctrine. 

North Carolina

Employers in North Carolina can fire employees at their convenience without warning unless a contract or state law prohibits such action. Employees have the right to file a claim for wrongful discharge based on discrimination or retaliation for filing workers' compensation claims or reporting criminal activity. 

Massachusetts

Non-union employees in Massachusetts who have not signed a contract with their employer can be terminated at any time for any reason (or no reason). However, like in most at-will states, employers in Massachusetts cannot fire an employee for participating in protected activities, as that would violate public policy or state and federal anti-discrimination laws. 

As you may have noticed, at-will is pretty much the same in all states. A slightly different situation exists in Florida and Georgia, where employers are not required to consider exceptions to at-will when terminating employees. 

Most US countries have some exceptions to at-will (which we'll discuss in more detail later). Florida, Georgia, Rhode Island, and Louisiana are the only states where exceptions to at-will don't apply.

What states are not at-will employment states?

All states in the US are at-will states. Montana is an exception because an at-will employment relationship is only possible during the probationary period. Employers can either define the length of the probation or apply a statutory six month probationary period. After the probation ends, the employee in Montana can only be discharged for just cause.

At-will employment laws by state

Again, all 50 states follow at-will employment principles, with the exception of Montana, where at-will applies only during the probation period. Each state has specific regulations regarding public policy, implied covenant of good faith and fair dealing, and implied contract exceptions within its labor law. Understanding at-will laws is critical for employers and employees to protect employment rights and prevent wrongful terminations.

What are the main exceptions to employment at will?

As listed in the table above, the common exceptions to employment-at-will refer to public policy, implied contracts, and good faith and fair dealing.

Public policy

The majority of the US states recognize public policy exceptions to at-will employment. Interpretations of this exception can vary from state to state. However, the general rule is that an employee can't lose their job for reasons that violate public policy. In practice, that means an employer cannot fire someone for refusing to participate in illegal activities, for reporting a violation of the law, or for participating in civic duties like serving on a jury. 

Implied contracts

An implied contract can arise from the employee handbook or through a written or verbal agreement in which both employee and employer agree on terms of employment that may not be explicitly stated in the formal contract.

For instance, if an employer assures an employee of job security in exchange for loyalty and devotion to the company and then decides to fire an employee without a cause, that could violate the implied contract, as it undermines the promise of job security.

Good faith and fair dealing

Good faith and fair dealing exceptions to at-will law refer to situations in which an employer is required to act in good faith when terminating an employee. 

Suppose an employer decides to fire an employee shortly after informing them of a raise. In such cases, the employer's decision can be perceived as acting in bad faith. A similar violation occurs when an employer tries to "mask" bad faith by promoting an employee and then terminating their employment shortly after. 

And so, these exceptions serve to prevent unjustifiable dismissals. Employers must have a legitimate reason to fire an employee. That reason must be job-related and result from misconduct, poor performance, or violation of company policies. If the employer's reasons for ending the employment relationship are the employee's gender, religion, or nationality, such a discharge violates anti-discriminatory laws.

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At-will employment states FAQs

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

At-will employment enables an employer or employee to terminate employment at any time for whatever reason, as long as it is legitimate. 

Right to work guarantees employees that their employment will not depend on union membership. In other words, joining the union must not be a condition of employment or job security. 

Florida is both an at-will and right-to-work state.

Can an employer terminate an employee without notice?

Yes, in many US states, an employer can terminate an employee without notice, as long as the reason is not illegal, such as discrimination or retaliation. However, some contracts, union agreements, and state-specific laws require just cause or notice for termination. 

Can at-will employees claim wrongful termination?

Yes. Even in at-will arrangements, employers cannot fire employees for discriminatory reasons, retaliation, or violation of public policies. Such reasons can be valid for filing a claim. 

What are the main reasons for wrongful termination?

The main reasons for wrongful termination are:

• Discrimination: When termination is based on protective characteristics of an employee such as gender, race, nationality, and disability.
• Retaliation: When an employer fires an employee for reporting workplace violations such as discrimination and harassment.
• Violation of public policy: Employer fires an employee because they refuse to participate in illegal activities, report an illegal activity, or exercise legal rights, such as taking a family leave.
• Breach of contract: When an employer violates terms outlined in the formal contract, including implied contract.
• Defamation: If an employer spreads false information about an employee upon termination, causing reputation damage.

This blog is based on information available to Rippling as of October 23, 2024.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.