Unless a contract of employment exists or an employee is a member of a union, an employee's term of employment is usually considered to be "at will." Generally, at-will employees may be fired without just cause. In fact, the termination of an at-will employee's job does not have to be supported by a good reason or by any reason at all. At-will employees are also free to resign their positions at any time. Several exceptions, however, exist to this general rule.
Although most workers do not have an employment contract or are not members of a union, implied contracts may arise to provide otherwise at-will employees with certain protections. In some cases, statements made in Employee Handbooks or manuals may create implied contractual obligations in favor of an employee.
If a handbook includes a clear disclaimer stating that employees have been hired as at-will employees and that the handbook is not a contract between the employer and its employees, courts will generally not find an implied contract. If the language of a handbook, however, makes promises regarding the employment, an implied contract may be found as to those promises, even if the handbook includes a clear disclaimer. An employee will likely be required to show that he or she read the handbook in order to assert a claim for the breach of an implied contract.
State and federal statutes also limit the rights of an employer to fire or take other adverse action against an at-will employee. All states and the federal government, for example, have passed discrimination laws making it illegal to take adverse employment actions against an employee on the basis of race, sex, religion, age, or disability.
Some states have also banned discriminating against employees on the basis of marital status or sexual preference. Most states have passed laws to prohibit employers from firing employees because they filed workers' compensation claims. A federal statute and a number of state statutes, called "whistleblower" laws, also make it illegal for employers to take adverse actions against employees who report wrongdoing in the workplace.
Violations of Public Policy
Even in the absence of a statute, employers are generally forbidden from taking adverse actions against at-will employees where those actions violate established public policies. In many states, for example, it is a public policy violation to fire an employee for refusing to violate the law. Therefore, an employee fired for refusing to testify falsely on behalf of his employer can bring a lawsuit against his employer for wrongful discharge.
If an employee is an at-will employee, the employer can legally terminate the employee's job in most situations, including when:
- The employer downsizes or reorganizes the business
- The employee irritates the employer
- The employee violates company policy
- There is a natural disaster and the employee has to spend his or her time recovering from the disaster
- The employee has successfully completed a probationary period (unless the employer promised the employee a job upon successful completion)
Although an employer can fire an at-will employee without just cause, most employers have a valid reason for firing the employee in order to avoid a lawsuit over the matter.
Questions for Your Attorney
- If my employee handbook has a disclaimer at the beginning of the handbook stating that the employee has been hired as an at-will employee and that the handbook does not constitute a contract with the employee, can I still sue my employer for violating the discharge policy as stated in the handbook?
- Do the anti-discrimination laws create a contract with my employer?
- Can my employer require me to lie on the witness stand or lose my job?