Q: What is at-will employment?
A: In every U.S. state except Montana, employment is presumed to be at-will, meaning either the employer or the employee can legally terminate the employment relationship at any time, with or without notice, and with or without cause. The employer has not guaranteed employment for a period of time, and the employee has not promised to stay; therefore, either party can end the relationship without financial penalty. There are, however, exceptions and limitations to the at-will relationship, so employers should still be careful when terminating an employee.
A collective bargaining agreement or employment contract, for example, could change the relationship so that it’s no longer at-will. And it’s important to keep in mind that at-will employment does not permit an employer to terminate employment based on the employee exercising a legal right or belonging to a protected class (e.g., race, sex, religion, national origin). Doing so could lead to a discrimination claim.
Consequently, the safest way to terminate an employee is to have documentation that justifies the legitimate business reasons behind the termination. This documentation would include infractions of policy, instances of poor performance, and any disciplinary or corrective action taken. The more an employer can do to show that they gave a terminated employee the chance to improve, the better.
The bottom line is that while at-will employment makes it sound like you can terminate employees at any time, with or without notice, and with or without cause—and to a degree you can—legitimate and documented business reasons are always your best bet.