Legal Limitations of Termination of At Will Employment

Generally under an employment which is “At Will”, either party (the employer and the employee) can break the relationship with no liability. Suffice to say, the employer is free to terminate at-will employees for good cause, or bad cause, or no cause at all and the employee is equally free to quit, strike, or otherwise cease work. The termination of an “at-will employment” therefore, is merely based upon the desire of either the employer or employee.

Exceptions to At-Will Employment

There how however, exceptions to an at-will employment. There are legal limitations to the termination of an at-will employment and these are:

• First, if there is an express contract governing the employer-employee relationship and the employer does not belong to a collective bargain, the employment relationship is not considered at-will.
• Employees may be terminated en masse in instances such as closure of the business or downsizing, but ability to terminate workers en masse must always have a valid reason.
• Other valid termination reasons include: termination be due to a merger, workforce reduction, change in company direction and business focus, and poor company performance.
• Another limitation to employment at will is “promissory estoppel.” The employer is estopped from terminating an employee at will if the employee can show that:
  1. The employer made a clear and unambiguous promise of further employment.
  2. The employee relied on the promise.
  3. The employee’s reliance was reasonable and foreseeable.
  4. The employee was injured as a result of the promise.
• The employer may also not fire an employee if the ground for termination is unlawful or illegal, such as termination due to discrimination against nationality, race, gender, age, religion, disability and any other protected characteristic.
• Under the doctrine of public policy, employers also cannot fire their employees if it is against the state's public policy or a state or federal statute. Under the theory of public policy, an employee cannot be fired if:
  1. He refuses to do an illegal act punished under the state or federal statute.
  2. For exercising his statutory right such as collection of Worker’s Compensation or availing of the Family and Medical Leave Act.
  3. For being a whistleblower – reporting the illicit or illegal activities of his employer or company to the government.
  4. For engaging in acts encouraged by public policy such a jury duty and the like.

Wrongful Termination Still Happens in "At-Will" Employment

The above-mentioned legal limitations restrict the general rule that employees can be terminated at the will and whim of their employees. While employers still have the power to hire, to control, to pay wages and to fire employees, the power to terminate at will employment is not always absolute.

Employers should take note of the current conditions as well as any other agreement or employment manual available when engaged in the task of terminating their employees. Otherwise, they may be held liable for wrongful termination.