Most employees in the U.S. are “at-will” employees. “At-will” employment gives employers a great deal of flexibility when firing an employee. An employer may fire for almost any reason, and need not disclose the reason to the employee in many circumstances.
If you think at-will employment frees you to fire for any reason, however, think again. Even an at-will employee may not be fired for a reason prohibited by law. In this article, we’ll look at the rules for firing at-will employees and what your company can do to protect itself from charges of firing discrimination.
What is “At-Will” Employment?
Every U.S. state gives employers the opportunity to hire “at-will.” At-will employment is typically defined as an employment agreement in which the employer may fire the employee for any reason or no reason.
Specific protections like a notice policy, an evaluation procedure, or a means of appeal are not typically required under at-will employment laws. Conversely, the employee may quit the job for any reason or no reason, and may often do so without providing notice.
Why You Can Fire — and Why You Can’t
At-will employment provides a great deal of flexibility for employers. You may fire an employee because his or her work is substandard, because he or she does not get along with co-workers, or for reasons that have nothing to do with performance, like downsizing.
But while employers in every state may hire “at-will,” they are not entirely free to fire at whim. Illegal reasons to fire an at-will employee typically fall into one of three categories:
- whistleblowing, and
- exercising legal rights.
Employers may not fire at-will employees for reasons that violate federal, state, or local discrimination laws. Federal laws prohibit firing on the basis of age, race, gender, religion, national origin, or disability.
Many states have laws that prohibit firing for these reasons and others, including sexual orientation, gender identity, or body size. Likewise, many U.S. cities and other localities have expanded the category of illegally discriminatory reasons to fire. Federal discrimination laws are overseen by the Equal Employment Opportunity Commission (EEOC) and other agencies; states and localities have their own laws and oversight agencies.
Whistleblowers (employees refusing to participate in, or for refusing to remain silent about, illegal activities) are protected under a number of federal, state, and local laws. The specific laws that apply to a particular employee may depend on the industry in which the company operates. Many federal whistleblowing laws are enforced by the Occupational Safety and Health Administration (OSHA). State and local laws are enforced at the state and local levels, often in state court.
Exercising Legal Rights
A number of laws protect employees who are taking family or medical leave, performing military duties, voting, or serving on a jury. Generally, even at-will employees cannot be fired for exercising these rights within the requirements of the laws that govern them.
When Documentation is Your Best Friend
Most company handbooks:
- define what at-will employment means;
- define the specific instances under which the at-will relationship can be changed to a contractual or other employment relationship; and
- require that the employee acknowledge the at-will status, usually by signing a written acknowledgment.
But a handbook alone is not enough to protect your organization. Why? Many challenges to the firing of an “at-will” employee come down to “he said, she said.” To strengthen your position when firing an at-will employee, maintain proper documentation.
Items to document in every employee’s file include:
- Poor performance. Poor performance is nearly always a legitimate reason to fire an employee. Keep written records of annual performance reviews, certification and testing results, and customer kudos or complaints about each employee.
- Tardiness and absences. While you cannot fire for legal absences like taking time off to vote, you can keep track of every employee absence and late arrival. Too many “unexcused” absences provide grounds for firing an employee even if the employee has also had a few “excused” absences.
- Disciplinary interventions. Keep written records of every situation in which a manager or supervisor has had to discipline an employee. A history of corrections, “write-ups,” and warnings provides stronger grounds for dismissal.
Instruct managers responsible for terminations to create a “cheat sheet” of poor performance, absences, and disciplinary events, and to refer to it during the termination meeting. No mention should be made of any illegal basis for firing, even if it did not factor into the company’s decision.
For instance, if an employee recently took leave under the Family and Medical Leave Act (FMLA), do not mention the leave during the termination meeting. Instead, focus on the legal reasons for firing, such as the employee’s poor performance or customer complaints.
How to Hire Without Hiring — and Fire Without Firing
Navigating the employment waters can be tough, and it becomes harder when workflow is erratic or your company is tackling a specialized project for which particular capabilities are only required for a few months. How can you avoid the risk of a firing-related lawsuit while still finding the people you need to get the job done?
Consider working with a staffing agency. When you hire temporary employees through your staffing firm, you get the capabilities you need when you need them. Because your staffing firm is the employer of record for temporary staff, your company also avoids a potential quagmire if it becomes necessary to fire a temporary worker. Talk to your staffing partner today to learn more.
Note: Information in this article is not intended as legal advice and should not be taken as such. For advice on particular legal issues surrounding your company’s employment practices, speak to an attorney who is licensed to practice law in your area.