What States are At-Will Employment States?


Cassandra Nguy

All states are at-will employment states except Montana, due to their Wrongful Discharge from Employment Act. At-will employment states define the relationship between the company and its employees. However, quite a few of these states have limitations for at-will employment to avoid illegal and discriminatory behavior.

Even though every state practices at-will employment, there are exceptions preventing employers from firing anyone for the following reasons:

  • The Public Policy Exception
  • Covenant of Good Faith Exception
  • Implied Contract Exception

If you were fired and your company violated these exceptions to at-will employment, you may qualify for an employment legal claim. If your company retaliated against you for exercising your at-will employment rights, speak with an employment attorney as soon as possible.

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What is At-Will Employment?

At-will employment states allow employers to fire workers for any legal cause without warning, baring some exceptions. This also allows workers to quit for any cause without facing retaliation from their employers.

Employers and employees enjoy multiple benefits from at-will employment if they act in good faith. For employers:

  • They may reduce labor costs during economic downturns by laying off employees
  • The employment contract is more subject to change (wages, hours, job duties, etc.)
  • Workers may be hired, fired, or laid off at the company’s convenience, without violating the exceptions to at-will employment

At-will employment states allow several advantages to employees as well, such as:

  • Greater job freedom
  • Rewards based on job performance rather than seniority
  • Certain job protections ensured by federal and state law (discrimination, hostile work environment)

Nevertheless, at-will employment spells some disadvantages due to the freedom it grants workers and employers. Some critics note that at-will employment reduces job security and increases employee turnover due to the ease of hiring and firing workers. The lack of job security makes it hard to attract new hires as well.

Exceptions to At-Will Employment Law

Although at-will employment grants freedom for both parties, there are exceptions employers and workers must know. If you feel your rights were violated, consult an employment attorney to arrange a free consultation for your case.

Public Policy Exception

A public policy exception is protection over being fired for violating public policy. For instance, taking time off for jury duty or reporting illegal activities within the company. Employers cannot fire employees for acting on the greater good of the public.

Each state’s policies differ, so interpretations under this exception may vary. Look into your state’s laws and see if this exception applies within your state.

Covenant of Good Faith Exception

The covenant of good faith exception means an employer may not terminate someone based on bad faith or with a motive of malicious intent.

For example, an employer gives positive feedback on an employee’s performance — later to be fired without just cause. Another example would be firing an employee to avoid paying them a promised bonus.

A specific case highlighting the covenant of good faith exception is Kmart Corporation v. Ponsock case in Nevada.

The Supreme Court found that Kmart Corporation had terminated Ponsock’s job agreement to avoid paying him retirement benefits. The court ruled Kmart Corp was motivated under malicious intent and that Ponsock would be entitled to recover for bad faith agreement.

Implied Contract Exception

An implied contract exception is a less formal agreement between employer and employee not explicitly stated in the employment contract. Implied contracts create mutual trust between both parties and may prevent employers from firing workers without just cause.

Implied contract has no formal verbal or written contract, and exists when both parties have established terms through their actions. An example is allowing a contractor into your home to work on your garden. The fact that you allowed the contractor into your home is an implied contract.

Another example is if the employer promises the employee job security in exchange for meeting standard performance; this is potentially an implied contract. If the employer fires the employee without valid reasons, the employee states the implied contract is breached and may have a case for a wrongful termination lawsuit.

Compared to implied contracts, express contracts are the opposite as it’s a formal written or verbal agreement between both parties. When a contract is written, these contracts are easy to interpret if disagreements arise and can serve as a tangible record during an employment lawsuit.

At-Will Employment States in the U.S.

All the listed states below are at-will employment states in the United States. The table will also show at-will state employment law exceptions due to public policy, covenant of good faith, and implied contract.

StatePublic Policy ExceptionCovenant of Good Faith and Fair DealingImplied Contract Exception
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Rhode Island
South Carolina
South Dakota
West Virginia

Why At-Will Employment Matters

At-will employment matters by providing employers and employees the right to end their employment at their discretion without legal consequences. Even though employees are at a high risk of getting fired on a whim, understanding at-will employment laws can help employees know their rights.

Can You Be Wrongfully Terminated in an At-Will State?

It’s possible to get wrongfully terminated if they violate the exceptions to their at-will employment state. Wrongful termination can be reasons such as:

Companies also cannot terminate you solely for filing a workers’ compensation claim since it falls within the course and scope of your employment. Some states may have varied rules and regulations for wrongful termination. Make sure your attorney knows these details, like whether contractors qualify for the same benefits.

Additional Exceptions For At-Will Employment

More exceptions for at-will employment in which employers may not be allowed to terminate under at-will employment are:

  • Contract workers—Employees with a listed start and end date may have conditions on circumstances when terminating the contract.
  • Discrimination—Civil rights legislation protects employees’ termination due to discriminatory behavior of gender, age, ethnicity, background, etc.
  • Protected Employment—Employers cannot terminate employees’ employment when they are on job-protected leave, like the Family and Medical Leave Act (FMLA).
  • Whistleblowing—Employees reveal information to the authorities about an authorized figure or employer who has done illegal, immoral, unsafe, or fraudulent acts.
  • Unionized jobs—Employees working under unions and are protected by collective bargaining agreements may be terminated due to just cause. Understand the difference between right-to-work and at-will employment.

The exceptions to at-will employment vary from state-to-state. To learn more, find an attorney experienced with employment law in your area.

Protect Your At-Will Employment Rights With an Attorney

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Cassandra Nguy

Cassandra Tran Nguy is a legal writer living in Los Angeles, California. She graduated cum laude from California State University, Northridge with a B.A. in English Creative Writing and a minor in Marketing. Visit her online profile at linkedin.com