Human Resources and Employment Law Topics

At Will Employment

A term used in the US stating that employers have the right to hire, dismiss, demote or promote any employee they choose. Unless…

  • There is a Federal Exceptions to At-Will Employment
  • There is a State Public Policy Exception to At – Will Employment
  • There is an implied contract
  • There is a written contract of employment
  • Or you own a business in Montana

In other words at-will employment is generally described as follows: “any hiring is presumed to be ‘at will’; that is, the employer is free to discharge individuals ‘for good cause, or bad cause, or no cause at all,’ and the employee is equally free to quit, strike, or otherwise cease work.


In order to keep the employment relationship at will you need to be cautious of the five bullet points above.

Federal Exceptions to At-Will Employment

Federal exceptions to the employment-at-will doctrine are employment decisions based on an employee’s race, color, religion, sex, national origin, age, disability, or veteran status. It is important to recognize that federal discrimination statutes shield members of protected classes only from adverse employment actions made because of their membership in a protected class. In other words, an employer may fire Bob because he failed to perform the required functions of his job, but not because he is Asian.

Other reasons an employer may not use to fire an at-will employee are:

  • Refusing to commit illegal acts – An employer is not permitted to fire an employee because the employee refuses to commit an act that is illegal.
  • Family or medical leave – federal law permits employers that must comply with Family Medical Leave Act from firing employee who take family or medical leave.
  • In retaliation for taking a “protected action” – for example filing a worker’s compensation claim.

Examples of federal statutes include:

    • Equal Pay Act (aimed at abolishing wage disparity based on sex );
    • Title VII of the Civil Rights Act (outlawed discrimination on the basis of race, color, religion, sex, or national origin);
    • Age Discrimination in Employment (forbids discrimination on the basis of age with respect to persons of at least 40 years of age);
    • Rehabilitation Act (prohibits discrimination on the basis of disability in programs run by federal agencies; programs that receive federal financial assistance; in federal employment; and in the employment practices of federal contractors.);
    • Americans with Disabilities Act (wide-ranging law that is intended to protect against discrimination based on disability)
    • The National Labor Relations Act (guarantees basic rights of private sector employees to organize into trade unions, engage in collective bargaining for better terms and conditions at work, and take collective action including strike if necessary)

  • Specific state statutes may also protect employees from discrimination based on other factors, such as sexual orientation

State Public Policy Exception

The state public policy exception prevents an employee from being terminated if it would be against a state public policy. Some common examples are terminations based on the employee filing a worker’s compensation claim or an employee’s refusal to engage in illegal conduct for the employer. State public policy is typically determined by the state’s constitutions, statutes, or administrative rules.

It’s one of the more widely applied exceptions, and these states are the only ones that do not follow it:

    • Alabama
    • Florida
    • Georgia
    • Louisiana
    • Nebraska
    • New York

  • Rhode Island

Implied Contract

An implied contract is an exception to at-will employment relationship. Under the implied contract exception, an employer may not fire an employee “when an implied contract is formed between an employer and employee, even though no express, written instrument regarding the employment relationship exists.”

An example of where an implied contract can be found –

  • Employee Handbook
  • Offer Letter
  • Performance Review
  • Additionally they can be found in statements made in the interviewing and hiring process.

If the employer fires the employee in violation of an implied employment contract, the employer may be found liable for breach of contract.

The fourteen states having no such exception are:

  • Arizona
  • Delaware
  • Florida
  • Georgia
  • Indiana
  • Louisiana
  • Massachusetts
  • Missouri
  • Montana
  • North Carolina
  • Pennsylvania
  • Rhode Island
  • Texas
  • Virginia

Generally if charges are filed against an employer for breaking of an implied contract it is because of statements by the employer, or employer representative – I.E. your manager, during hiring.

For example an implied contract can be found in a performance review. If a long time employee who has consistently received good performance evaluations could claim that his or her length of service and positive performance reviews were a sign that their job would be secure as long as their performance reviews remained satisfactory.

Some implied contracts have been found in repeated promotions and pay increases. An employee has and could state that they had good cause to believe that his or her job was secure because of them.

An overzealous manager could create an implied contract of employment in the hiring process. For example statements like-

  • “We need good people around here; you’ve got a job for life!”
  • “We don’t dismiss employees without giving them a chance to correct their behavior.”

These statements could be used to proof an implied contract of employment.

An implied employment contact can be found in areas of the Employee Handbook such as –

  • Statements in the handbook that employees will only be fired for cause.
  • Assertions in the Employee Handbook that specific termination procedures will be followed.

That is why EmployeESource.com repeats it in offer letters, handbooks, performance review, and every area available that only Owners of the company are allowed to make promises of employment.

Written Contract of Employment

When you have a written employment contract you should have provisions as to what circumstances that you can terminate the employee. For example a union contract has provision for terminating employees.

EmployerESource.com highly recommends not having employment contracts. If you chose to have an employment contract (a highly paid employee, union contract) then you should have it reviewed by a Human Resource Specialist or employment law lawyer.

Montana Employers

Montana is the only state that does not have At-Will Employment. Instead the wild west has Montana Wrongful Discharge From Employment Act.
Basically this act has the following provisions –

As an employer you can have a probationary period at which time the employee is considered an At-Will employee. If the employer does not designate a probationary period then a six month probationary period is recognized.

The law does not address extensions of the probationary period. For this reason all EmployerESources.com employee handbooks give the company the option of extending the probationary period. EmployerESource.com recommends that all extensions be done in writing. All notices given to employees can be reviewed by EmployerESource.com.

During the probationary period the employee can be terminated as a At-Will employee. After that the employer must provide Just Cause for termination. Just cause is a legitimate reason (i.e. job or business reason) for firing an employee.

Sample business legitimate reasons are –

  • Tardiness
  • Harassing/Violence toward other employees or customers
  • Stealing
  • Insubordination

EmployerESource.com makes sure our clients have policies in their Employee Handbook to cover all necessary legitimate business reasons. EmployerESource.com also can conduct investigations on all work place complaints and provide you with a report on recommended actions.

The employee many challenge the termination in court or in front of an arbitrator. The law provides for limited damage the employee may collect. They may collect up to four year back wages and benefits minus anything they diligently tired to get a job for.