You’ve received a fantastic job offer, and everything seems to be running smoothly until your future employer asks you to sign a contract that includes the term “at-will employment.” What does that mean? What are you giving up? What are you gaining? Is there anything that will prevent you from being terminated out of the blue?
Find out the answers to these questions and everything else you need to know about at-will employment.
Many employees in the United States are at-will employees; when you accept a job offer, your contract will generally state if the offer is for employment at will. In most states, it is assumed that your employment falls under this category unless otherwise specified. Montana is the only state that requires employers to have just cause to terminate employees.
Essentially, it means that your employer can terminate you for any reason at all. Since at-will employment is assumed in most states, you have little recourse if you are terminated without cause, unless you can prove that your employment explicitly required justification for termination.
An at-will employee, likewise, can resign without offering a formal reason at any time as well. While both parties enjoy flexibility under this plan, it can be unsettling to know that your employment could be terminated at any point and that it is perfectly legal for your employer to do so. Furthermore, employment at will also means that employers can alter the employment terms, including benefits, vacation time, salary, and more, at any point as well.
If your job is terminated, you do have rights, even as an at-will employee. For example, you may not be fired for reasons such as:
• Complaints about harassment
• Exercising your legal rights (such as taking parental leave under FMLA)
• Sexual orientation
These reasons include anything else that is illegal according to state and federal law. Other exceptions are contracts stating that your employer may only terminate you for cause, implied contracts such as a handbook outlining procedures that must take place before termination, or cases concerning “good faith and fair dealing,” meaning the employer cannot terminate you to avoid performing duties such as giving you healthcare.
Another exception is public policy, meaning that an employer cannot violate a state’s public policy by terminating an employee. An example of this is terminating an employee who seeks workers’ compensation for a workplace injury. The public policy exception is recognized in most states, excluding:
• New York
• Rhode Island
When you are offered employment, the employer will generally ask you to sign one or more contracts outlining the terms. It will include the rights and responsibilities of both you and the employer, covering areas such as:
• Duration of employment if applicable
• To whom you will report
• Non-competition (preventing you from “competing” with the company upon your termination)
While most employment is considered “at will,” many employers will explicitly state that this is the case or outline procedures for termination.
Even if you are an at-will employee, there are some circumstances under which you can sue an employer who terminates you. You may sue if you are fired for one of the reasons outlined in “What are my rights as an at-will employee?” as well as instances including:
• Employment discrimination as outlined in the Title VII protected classes of the Civil Rights Act of 1964
• Invasion of privacy
• Any other illegal act
If you are considering suing your employer for wrongful termination, speak to an attorney about your next steps.
If you are an at-will employee, you may quit without giving our employer notice at any point. However, you should review your employment contract to ensure that you haven’t agreed to give a certain amount of notice or follow specific procedures before you do so.
Furthermore, even if you are unhappy with your current position or at odds with your manager, it’s always best practice to give your employer at least two-weeks notice and write a formal resignation letter. This will allow you to leave on good terms (or at least better terms than the alternative) and leave the door open for the possibility of future employment.
Unemployment laws vary according to state, but most states allow at-will employees whose employment ended through no fault of their own to collect unemployment benefits.
If you were fired for cause such as misconduct or left your job voluntarily without cause, chances are you will not qualify for unemployment—but again, you should read your state’s laws outlining the definitions of good-cause termination and non-fault termination.
Looking to file for unemployment? Read the steps involved.
While you may be anxious about signing an at-will contract, oftentimes, you won’t be able to work for the employer in question unless you do so. Whether or not you sign the contract is entirely up to you, of course, but you should carefully consider what you’ll be giving up or gaining as a result of signing or not signing.
You should not sign an at-will contract if:
• You are uncomfortable with any of the terms outlined.
• It contradicts or omits any earlier verbal or written agreements with the employer.
Instead, discuss the terms, mentioning your earlier discussions if they are relevant, with the prospective employer, and ask for revisions if they are necessary.
It is also perfectly reasonable to negotiate the terms of the contract, although the bulk of these discussions will most likely come just after the initial offer and before the employer gives you the paperwork to sign.
Also, remember that you can and should ask questions about the contract or anything else you deem important. This is the best time to clarify issues because once you’ve signed a contract, it will be harder (and sometimes illegal) to backtrack.
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