U.S. states have separate and individual employment laws. The term at-will employment is a legal term meaning that an employer can terminate an employee for any reason without warning. However, an employer cannot fire an employee if the reason for doing so is illegal or discriminatory, such as firing someone because of their gender, race, or religion.
Contracts in at-will states between employers and employees prevent the employer from pursuing a claim against the employer due to being fired. In other words, an employee can not sue for lost wages due to dismissal from the job, provided the dismissal was legal, as discussed above.
This law doesn't just apply to employers, though. In at-will employment states, employees can also quit their jobs or go on strike without having to provide an explanation.
All 50 states in the U.S. and Washington, D.C. are at-will employment states. However, some states have exceptions.
One limitation is the public policy exception. This means that an employer can't fire an employee if it violates the state's public policy doctrine or a state or federal statute. An example of this would be retaliation against an employee who performs an action that complies with public policy or an employee who refuses to perform an act that would violate public policy.
Forty-two states plus Washington, D.C., have the public policy exception in place. The states that do not are:
- New York
- Rhode Island
There is also an implied contract exception. This means that an employee can't be fired when an implied contract is formed between the employee and the employer. This exception is typically difficult to prove, and the burden lies on the fired employee. A total of thirty-six states plus Washington, D.C., have implied contract exceptions. The states that do not are:
- North Carolina
- Rhode Island
There are also "implied-in-law" contracts. There is no set definition for this, and courts have interpreted this exception in different ways. For example, one interpretation would prevent an employer from firing a tenured employee to avoid paying retirement benefits.
There are 11 states with implied-in-law exceptions. Those states are:
There are also statutory exceptions that vary throughout states. This could trigger termination for refusing to engage in illegal activity or taking medical leave.