What Does At-Will Employment Really Mean? - Human Resources Hero

What Does At-Will Employment Really Mean?

At-will employment is a term that is often heard in conjunction with hiring or firing an employee, but most business owners don’t really have a firm understanding of exactly what at-will employment means for their relationship with employees. In this post, we’ll explore some of the misconceptions surrounding At-will employment and what it means for your business.

When can you terminate employment?

At-will employment means a non-contractual employment relationship between an employer and employee where either party can terminate the relationship without notice at any time for any reason not prohibited by law.

In simpler terms, we’re looking at an employment relationship between the employer and the employee that’s not evidenced by a contract.  If you’re not sure whether or not you have a contract with your employees, you probably don’t have one. But there are some important things to keep in mind before making a final determination.

If the employer and employee agree to definite start and end dates for employment, that might indicate an implied contract.  If there are certain specific terms for employment – and this isn’t to be confused with general job duties or a job description – that might also characterize a contractual relationship. If you feel like you might have a contractual relationship with an employee, check with an HR professional before proceeding with an employee termination. 

Assuming that you do indeed have an at-will employment relationship with your employees, does that truly mean that you can terminate employment for any reason at any time? Not really.

At-will employment is not a blank check.

The way employment laws are written, the burden of proof will always be on the employer to prove that they did nothing wrong in terminating an employee. In other words, if the termination were challenged you would automatically be on the defensive to show that your actions were not discriminatory. 

Contrary to popular belief, at-will is not a blank check. It doesn’t protect against discriminatory terminations. So if an employee is a member of a protected class such as a certain race, sexual orientation, gender, disability etc., the employee may not be terminated based on their membership in any of these classes. In addition, employees may not be terminated as retaliation for claims of harassment, so if an employee reports any form of hostile work environment or sexual harassment then they may not be terminated just for reporting that. 

Finally, employers may not terminate whistleblowers.  Whistleblowers are people who expose any kind of information or activity that is illegal or unethical. If they go ahead and report to some state agency or regulatory authority what they feel is misconduct and they are terminated in response, that termination would be not permissible under the at-will relationship. 

With this long list of reasons why an employer may not terminate an employee, you can see how careful you must be when terminating an employee. Remember, under at-will employment, it is the employers responsibility to prove that the termination was not for one of the above mentioned reasons and proving a negative can be difficult. To properly protect your business from a wrongful termination complaint or lawsuit, It’s important to follow Best Practices and carefully gather the needed documentation you will need to demonstrate that any termination was not discriminatory in nature.

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Do's and don'ts of at-will employment

Documentation really is key to accomplishing this, so let’s take a moment review the do’s and don’ts of documentation.

Do document all conversations in meetings. this includes  any conversation that relates to an employee’s performance or any issue that may need to be written down and stored the employee personnel file. If you have a meeting to discuss employee grievances then you’re going to want to document what was said  in the meeting and the reasons the meeting took place. That way,  if an employee ever comes back later and says that there was a wrongful reason for termination, you can reference your documentation and prove what did and did not take place in the meeting.

Do document performance issues. If an employee is having performance issues, even if they are still new to the job,  If it warrants a note in their personnel file go ahead make that note. Performance issues need to be documented at the first sign of actual issue. That way, you can have an accurate paper trail to prove why a termination did take place.

Don’t document disparaging remarks, feelings, opinions, or assumptions. Always keep documentation  professional. If you’re going to  document anything, it needs to be related to the performance issue or the conversation you had. Remember, documentation is discoverable. If a wrongful termination suit  is ever taken to trial, whatever you wrote down is going to be made available to the employee and their attorney, so keep it professional and based only on the facts and only on the issues of the employee’s  performance. 

If you want to learn more about at-will employment, documentation and terminating employees, check out our extensive on-demand webinar library. It’s free and has dozens of trainings on this and a variety of other HR topics.

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