One of the questions I often help employers work through is can they terminate an employee. And too often I hear “But we’re in an at-will state” or “we’re an at-will employer”.

At-will employment is often misinterpreted to mean that an employer can terminate an employee whenever they please, and while at-will employment policies do state that the employee or employer can terminate employment at any time, with or without cause, and with or without notice, there are limitations to that on the part of the employer. 

First, all states are at-will employment states. Some states have added legislation that further limits the bounds of at-will employment, but the overall objective is the same. 

So what does at-will employment really mean? 

Yes, employees can resign their positions at any time, with or without notice, and with or without reason. And yes, employers can impose penalties if employees do not give notice within the limits of federal, state, and local laws, such as setting a vacation policy that requires 2-weeks’ notice to receive a payout of accrued, unused vacation time upon termination. And yes, if an employee gives a 2-week notice, the employer can opt to take that notice effective immediately, and it’s still considered a voluntary resignation. 

But what at-will employment does not mean is that an employer can terminate employment with or without notice, and with or without cause, if doing so violates other employment laws. 

When reviewing an employer’s request to terminate an employee, there are a few things that I take into consideration:

1. Is the employee in a protected class? For example, are they female, are they over the age of 40, are they a minority, are they disabled?
2. What is the employer’s reason for wanting to terminate employment? Are there performance issues and if so, have they been addressed with the employee, and has the employee been given the opportunity to improve performance? And have those performance issues and conversations been documented? Is it an attendance issue? Is there documentation of poor attendance and disciplinary action for violation of the attendance policy? Is there a written attendance policy? 
3. Is the termination a layoff? If so, is it truly a layoff or is the employer using that reason as means to get rid of an employee they just don’t want? While there are no legal limitations on how long a position must be vacant in order to constitute a layoff, the adhered to standard is six months unless there is a significant change in business. If an employer lays off an employee and refills the position in 2-3 weeks, chances are it wasn’t really a layoff but an excuse to terminate an employee they didn’t want. 
4. Is there an employment contract that impacts Employment-At-Will? Employment contracts are a legally binding document that outlines the terms of employment, and often includes the length of employment under the contract and penalties for terminating the contract early, both for the employee and the employer. Such contracts may create limitations to employment-at-will.  
5. Would a judge find this termination justified? If an employee were to file a lawsuit for wrongful termination, how would a judge see it? Have I as an employer covered all my bases to make sure the termination was within the law? Documentation is critical to this decision. If an employer wishes to terminate an employee, they must be able to show justification for that decision. 

Employment-at-will is not a free pass to terminate employees “just because.” The employer is still responsible for ensuring that the termination is justified and within the limits of federal, state, and local laws.