At-Will Employment - It Doesn't Mean What You Think It Means

By: Erick Becker, LA Labor Relations Examiner

August 19, 2009

The term “at-will” is sprinkled through almost any employment document in use today, but there is a great deal of confusion over what it really means. Employees worry they’ll walk into work one morning and the boss will say “you’re fired,” without warning or reason, and there's nothing they can do about it. Employers believe that at-will employment gives them protection from any legal challenge by a terminated employee. Neither is accurate.

In reality, at-will is a very limited doctrine involving only one issue, contracts of employment. The garden variety “wrongful termination” lawsuit is a breach of contract suit. In order to prevail, the employee has to overcome the general presumption set forth in California Labor Code 2922 that employment for an unspecified length can be terminated at any time – in other words, that there is no employment contract. Most other states have similar statutory provisions. When enterprising lawyers started attempting to overcome this presumption by arguing that employee handbooks, performance appraisals and verbal kudos for a job well done were actually employment contracts, employers began including at-will language in every employment document.

While at-will language establishes a defense against a basic wrongful termination lawsuit, it doesn’t provide a defense when an employee challenges a termination on other grounds, such as discrimination. In those cases, the employer must establish that there was some legitimate, non-discriminatory reason for termination – in other words, the employer is guilty until proven innocent.

As a practical matter, “at-will” does not give employers the right to fire employees with impunity. In the absence of a legitimate, documented reason for terminating an employee, “at-will” employers still face potential liability in employment litigation.