With few exceptions, almost all states, including California and Arizona, adhere to the default rule of at-will employment. The at-will nature of employment; the ability to terminate the employment relationship with or without notice for any reason, so long as it’s not a wrongful reason, is an important legal protection, and can help in challenging allegations of wrongful termination.
Typically, unless an employee can prove a contrary agreement or some other legal limitation on the employer’s right to terminate, an employer may terminate an employee at any time, with or without notice, and for any lawful reason, or no reason. Nonetheless, it is important employers take steps to make sure they do nothing that could be viewed as impacting the default at-will nature of the employee/employer relationship. For example, employee handbooks that don’t have at-will provisions or adequate disclaimer language could form the basis of an argument that the employer did not intend to form an at-will relationship; even probationary periods and progressive disciplinary policies, if not drafted properly, can be seen as suggesting something other than at-will employment.
The existence of express agreements limiting the right of the employer to terminate absent good cause—whether oral or written—can also impact the at-will nature of employment. Agreements with employees for specified terms (e.g., “three months’ notice will be provided prior to termination”) or employer statements suggesting job security, permanent employment, or that the employee will be able to keep their position so long as they continue performing their job, have all been deemed actions that could transform an at-will relationship into a termination “for-cause” relationship.
Tips for Protecting the At-Will Relationship
To avoid taking actions that could impact the at-will employer/employee relationship keep in mind these important tips:
- Include at-will employment provisions in the employee handbook, job applications, offer letters, and standalone policies.
- Review employee handbook language, offer letters, and any employment agreements to make sure existing language cannot be misunderstood as representing or suggesting permanent employment
- Train employees involved in recruiting, interviewing, and hiring on the difference between at-will and for-cause employment
- If your employee handbook includes a progressive discipline policy or probationary periods, speak with legal counsel about the necessity of keeping such policies and/or make sure they both expressly state they are not intended to change the at-will nature of employment.
NOTE: Even a contract for employment can include an at-will employment provision.
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