At Will Employment Doctrine: How It Works & 4 Big Exceptions

Cody Cromwell
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How At Will Employment Works

Starting with the Federal Court of Appeals for the Third Circuit in Twombly v. I.G.S. (2005) to the United States Supreme Court in Stolt-Nielsen S.A. v. AnimalFeeds International Corp. (2011) most courts have held that a party invoking the at-will employment doctrine does so with the burden of establishing certain elements. Specifically, an employer claiming that it is not an at-will employer must demonstrate:

  • That it has legally terminated the employment;
  • That the employee has violated a term or condition of employment;
  • That the act for which the termination was made was a significant (not just a trivial, de minimus, inconsequential) cause of the termination; and

That the employer should not be considered an at-will employer because of the nature of the terms and the economic value to the employer of the employee’s services.

And four other factors in addition to the four components, which must be present:

  • The duration of the relationship between the parties;
  • The employee’s or employer’s age or any other unfettered identity;
  • The employee’s health; and

Any other terms or acts of the parties (such as any promises, covenants, or understandings).

Note for Employees about At Will Employment

In the majority of states, in an At Will employment relationship, both parties have a right to end their employment relationship at any time. No contractual obligation exists.

State employee’s union leaders in Oregon are looking to get more control over how government employees are hired/fired and how wages are determined.

4 Exceptions to Employment at Will

Knowledge is power! With this power comes the ability to stay on top of all of the changes taking place out in the workforce. As those power shifts occur, the traditional rules that allowed employers to operate freely are transformed into exceptions to the at-will rule. This post will cover the four most common exceptions to the at-will rule.

The exception to the at-will rule that all employees are familiar with is employment during a labor dispute. It just seems fair that if employees are required to go to work and do their best to provide great service during a dispute, then those employees should receive appropriate compensation.

Two additional exceptions that all employees should know also have to do with labor relations and are within the NLRA:

Union Membership or Strike Privilege

Employees who are members of a union enjoy the advantages of union membership. Employees who are not members of a union may be covered by union protection during a labor dispute, but they are not required to be members of a union.

Union Negotiations

Employees must accept union representation during union negotiations even if they do not belong to the union. This applies to union negotiations with both the company and the union. However, employees may bring a grievance against the union if they feel the union employee acted in bad faith during negotiations. Union representatives may not threaten to file a grievance during the negotiation process, but they may threaten to file a grievance after the negotiations.

Exception 1: Public Policy Exception

(AKA Anti-Preemption Clause)

Some states have anti-preemption clauses in state law which would prohibit cities and counties from regulating certain aspects of labor laws.

However, most states do not have anti-preemption clauses due to public policy.

The public policy exception essentially says that this is something the government cannot prohibit cities and counties from doing due to the fact that the United States and all states of the Union are representative democracies and that this structure is clearly outlined in our Constitution.

For instance, state laws can prohibit cities and counties from regulating rent rates. However, if California has a law that prohibits rent rates from being controlled by cities and counties, the public policy exception is in place to protect the ability of cities and counties to regulate rent rates.

Even so, some cities have ordinances in place that ban employment policies which discriminate on the basis of race, color, religion, gender, or sexual preferences. These cities generally use the public policy exception to protect themselves, but the courts have also cited the exceptions to protect some businesses specifically.

As an example, the NYPD discriminated against Muslim police officers, but they should still have been protected if they were abiding by their anti-preemption clause.

For the exception to apply in these instances, the courts had to find that the city had a public policy statement which prohibited the employer from discriminating on the basis of religion.

Exception 2: Covenant of Good Faith

And Fair Dealing is a promising approach for resolving disputes about employment-at-will doctrine in the employment-at-will context under Ohio law. (The covenant is a well-known counterpart to the contractual elements of a covenant of good faith and fair dealing.)

Although the doctrine that makes an employee’s employment involuntary (i.e., an at-will employee, that is, an employee without a contract for the type of employment for which he or she works) generally prevails in the state of Ohio, certain exceptions can apply. One of these exceptions is the covenant of good faith and fair dealing, a counterpart to the common bar to contractual estoppel in the employment context.

The purpose of the covenant of good faith and fair dealing is to protect against contractual estoppel. It provides an exception to the rule that precludes an at-will employee from arguing that the employer has repudiated the terms of the contract established between the parties to any particular employment relationship. In other words, this doctrine prevents an at-will employee from arguing that his or her employer has repudiated the contract and that he or she is therefore "out of a job."

The doctrine of contractual estoppel generally precludes an employee from relying upon the contract terms established with the employer, even if the terms are otherwise unfair.

State Interpretation of At Will Employment

Some states have taken extraordinary steps to protect employees from discrimination and termination. These states have codified various forms of the at will employment doctrine. Here is a look at how the at will employment doctrine works in these states:


Updates The At Will Employment Doctrine: How It Works & 4 Big Exceptions

The parties should understand that employment at will means that an employer may terminate the employment of an employee, at any time, for any reason, with or without cause, and without any.

Notice or warning. A person is employed at will unless the contract of employment or law provides otherwise.

Most employers prefer to have an employment contract, but even when one is not required, it may be advantageous – or want by the employer, to have an employment contract.

The reason for this is that an employment contract gives more protections to an employer and employee, and protects the employee more than the at will employment doctrine.

Exception 3: Written or Implied Employment Contracts

This exception to the at-will employment doctrine applies when the employee signs a written employment contract, or the employer suggests through conduct that an employment relationship is in place.

The at-will employment doctrine says that employees are free to quit at any time for any reason. However, written or implied employment contracts or understandings can alter the employee’s ability to quit with impunity. For example, it may be illegal to fire an employee for exercising his or her right to organize a labor union, even if the employee signed a written employment contract that said he or she would not organize a labor union. The employee may be able to sue the company in this scenario for wrongful termination.

Also, if you’re an at-will employee and have a huge contract with your employer but they want to fire you for a regular job… you have the right to quit on the spot because this is not an at-will situation.

Exception 4: Trade Unions & Collective Bargaining Units

The at will employment doctrine is an exception that is commonly found in the employment contract. Created as an exception, it provides that an employer and an employee may terminate the employment relationship at any time when both parties are ready to part ways. This allows employers and employees to send clear signals about a termination.

Although the at will employment doctrine applies in all forms of employment relationships, the exception that actually protects the job termination right is found in the trade unions and collective bargaining units. This is due to the fact that job termination is generally one of the most important bargaining points of a trade union or a collective bargaining unit.

Therefore, the at will employment doctrine may be toughened up in accordance with trade union and collective bargaining units. Being that at will employment doctrine allows any party to resign, it is easy to see how an individual who enjoys a job without union protection may be in a better position to terminate employment. In contrast, the person who enjoys a union protection could be in a worse position to terminate.

Bottom Line

There are four exceptions to the at-will employment doctrine that you should know about when negotiating a new contract or negotiating your first salary.

Any employment contract can be revoked by the employer if they are willing to do so.

The at-will employment doctrine states that an employee has no right to continue work if there is a lack of mutual trust and good faith between the employer and the employee.

In certain situations, the at-will doctrine does not apply to the company.

These exceptions are important to know so you have a better understanding of how the at-will doctrine works.