Amy Ghosh is a Los Angeles-based Attorney at Law, specializing in Immigration Law, Family Law, and Employment Law, among others. She can be reached at: amygesq@gmail.com

At-will employment is a fundamental principle of U.S. labor law, meaning that an employer can terminate an employee at any time, for any reason—or for no reason at all—without incurring legal liability. Similarly, an employee can quit at any time for any or no reason. This doctrine is the default rule in all U.S. states except Montana.
The at-will doctrine can be altered by a contract, such as an individual employment agreement or a collective bargaining agreement for union members. These contracts often specify a term of employment or state that an employee can only be fired for “just cause.”
Exceptions to At-Will Employment
While at-will employment provides a great deal of flexibility for employers, there are significant exceptions that protect employees from wrongful termination. These exceptions are often the basis for wrongful termination lawsuits and can vary by state. The three main common-law exceptions are:
* Public Policy Exception: This is the most widely recognized exception. It prohibits an employer from firing an employee for reasons that violate a state’s public policy. Examples of this include:
* Terminating an employee for refusing to commit an illegal act.
* Firing an employee for fulfilling a civic duty, such as serving on a jury.
* Retaliating against an employee for “whistleblowing,” or reporting an employer’s illegal activities.
* Dismissing an employee for filing a workers’ compensation claim after an on-the-job injury.
* Implied Contract Exception: An implied contract can be created through an employer’s actions, statements, or policies, even without a formal written agreement. If an employee has a reasonable expectation of job security based on these factors, the at-will status may be negated. This can happen when:
* An employee handbook or company policy manual outlines specific procedures for termination, suggesting that employees will only be fired for cause.
* A supervisor makes verbal assurances of long-term employment, such as “You’ll have a job here as long as your performance is good.”
* The employer has a consistent practice of only firing employees for cause.
* Covenant of Good Faith and Fair Dealing: Recognized in a limited number of states, this exception implies that employers and employees must act in good faith and deal fairly with each other. Under this exception, an employer may not terminate an employee for reasons that are malicious, deceptive, or in bad faith. For example, an employer could not fire a salesperson right before a large commission check is due to avoid paying them.
In addition to these common-law exceptions, many federal and state laws also provide crucial protections against unlawful termination, regardless of at-will status. These include laws that prohibit discrimination or retaliation based on:
* Race, color, religion, sex, or national origin (Title VII of the Civil Rights Act)
* Age (Age Discrimination in Employment Act)
* Disability (Americans with Disabilities Act)

* Taking protected leave (e.g., Family and Medical Leave Act)

• Areas of employment covered:

  This includes hiring, firing, promotion, pay, benefits, training, and other aspects of employment.

   
• Harassment:

  Title VII also prohibits harassment based on the protected characteristics.