By Alan Blanco-– Oct 21, 2024
What is at-will employment:
An at-will employment relationship continues for so long as both the employer and the employee want it to continue and ends as soon as either party wants it to end. Under an at-will relationship, either party is free to terminate the relationship at any time without violating the other party’s contractual rights. The at-will nature of an employment relationship is either an implied or an express term of the contract of employment between an employer and an employee.
All employment relationships, even informal ones, have contractual elements. For example, if A and B agree that A will cut B’s lawn for $50.00 per mowing job, an informal contract exists between A and B. When A cuts B’s lawn, B owes A $50.00. In this example, neither A nor B specified that A would be employed to cut B’s lawn for a fixed term of time such as a full summer. Because the parties did not agree on a specific term of time for their lawn-cutting arrangement, both A and B are free to end their arrangement at any time and neither needs a reason to do so. At-will employment is implied as a term of the contract between A and B. Most states, including Pennsylvania, presume that employment is intended to be on an at-will basis unless the parties clearly indicate otherwise.
Often, the at-will nature of the employment relationship is an express term of employment. Many employees receive hire letters or offer letters that specify a start date, a position, compensation details, and other terms. Frequently, these letters specify that the employment relationship is at-will. Similar phrasing can be found sometimes in other documents such as an employee handbook acknowledgement signed by an employee. When this happens, the employer may try to argue that the parties have agreed on an at-will relationship as an express term of their employment contract.
Why does it matter whether an employment relationship is an at-will relationship:
Employers have a lot of flexibility to terminate at-will relationships. When a relationship is at-will, the contract between the employer and the employee is not violated if the employer or the employee end the relationship. However, that is not the end of the story.
Not every employment relationship is an at-will relationship. Parties are not required to contract for at-will employment, and sometimes they agree otherwise. For example, the parties might agree at the outset that they want their employment arrangement to last for a specific term of time such as for the duration of a one-year project. Or parties can agree that the relationship can only end in certain circumstances such as when the employee engages in misconduct or after one party gives the other party a certain amount of prior notice. Under limited circumstances, Pennsylvania law will infer that the parties did not intend to have an at-will relationship. When a firing violates an employee’s express or implied contract rights, the employee may be able to redress the violation.
In addition to express or implied contract limitations to at-will employment, employers are prohibited from ending an employment relationship for illegal reasons. There are many reasons why an employee’s firing might be found to be illegal. For example, the employer might have decided to fire the employee because of his or her race, religion, age, gender, disability, or because of another category specified for protection in a discrimination law, ordinance, or regulation. An employer might illegally fire an employee in retaliation for protected whistleblowing or for taking some other action protected from retaliation by law.
While at-will employment provides significant flexibility for employers, that flexibility is not absolute. Employers must still comply with all the other legal requirements that surround the contractual employment relationship such as laws prohibiting discrimination, laws governing minimum pay or overtime pay, laws requiring reasonable accommodation, and laws protecting certain employee activities.
When an employee is fired, the circumstances surrounding the termination should be examined carefully to see if it appears that the employer has acted illegally. If the employer has acted illegally, remedies may be available.