What Is At-Will Employment?
At-will employment means that both the employer and the employee can end the working relationship at any time, with or without notice, for almost any reason-but that doesn’t mean terminations can be unfair or illegal.
Common Misconceptions About At-Will Employment:
- “I can fire anyone for any reason.” Not true. While at-will employment does allow broad flexibility, there are legal limitations that protect employees.
- “If I fire an employee, they won’t qualify for unemployment.” Not necessarily. In Illinois, unless an employee commits gross misconduct, they may still qualify for unemployment benefits.
- “At-will means employees have no job security.” Partially true. Employees aren’t under a contract, but employers should still follow fair and ethical employment practices.
When Can’t an Employer Fire Someone? Despite at-will employment, employers cannot terminate employees for legally protected reasons, such as:
- Discrimination (race, gender, religion, disability, age, etc.)
- Retaliation (for reporting harassment, safety concerns, or illegal activity)
- Taking protected leave (such as FMLA or sick leave)
How Businesses Should Communicate At-Will Policies:
- Clarify during onboarding – Explain that at-will applies to both the employer and the employee but doesn’t override workplace protections.
- Include it in the employee handbook – Clearly outline what at-will employment means and what it doesn’t mean.
- Handle terminations professionally – Even with at-will employment, best practice is to document performance issues and provide clear communication when letting someone go.
Legal Limitations of At-Will Employment
At-will employment does not override state and federal protections-employers must still follow labor laws when terminating employees.
Federal and State Laws That Limit At-Will Terminations:
- Title VII of the Civil Rights Act – Prohibits termination based on race, sex, religion, national origin, or other protected classes.
- Americans with Disabilities Act (ADA) – Prevents firing employees due to a disability without providing reasonable accommodations.
- Family and Medical Leave Act (FMLA) – Protects employees taking qualified medical leave from being fired.
- State-Specific Laws – Some states have additional protections, such as requiring “just cause” for termination after a certain period of employment.
The Importance of Documentation in At-Will Terminations:
- Even though at-will employment allows businesses to terminate employees without cause, it is still best practice to document all disciplinary actions. Proper documentation helps:
- Protect the business from legal action.
- Provide a clear record of why an employee was terminated.
- Reduce unemployment claims by demonstrating a justified firing.
Best Practices for Handling At-Will Terminations
Even in an at-will employment setting, terminations should be handled professionally, legally, and ethically.
Steps a Business Should Take Before Terminating an At-Will Employee:
- Set Clear Expectations – From the start, clearly communicate job expectations, performance standards, and workplace policies.
- Document Behavior & Performance Issues – Keep detailed records of any warnings, performance discussions, and disciplinary actions.
- Provide Warnings & Opportunities for Improvement – If appropriate, give employees a chance to correct their behavior before termination.
- Ensure the Termination is Justified & Legal – Review whether the reason for termination is legally compliant and consistent with company policy.
How to Handle a Termination Conversation Professionally:
- Hold the conversation privately – If possible, retrieve the employee’s belongings discreetly before the meeting to avoid unnecessary workplace attention.
- Be calm, direct, and respectful – Keep the discussion short, factual, and professional.
- Avoid public terminations – Announcing or discussing a termination with other employees can damage workplace morale and trust.
How to Communicate At-Will Employment to Employees
Employees should clearly understand that at-will employment applies to both them and the employer-meaning they can leave at any time, just as the employer can terminate them when necessary. However, discussing at-will employment should be balanced with reassurance to prevent unnecessary fear or uncertainty.
How to Explain At-Will Employment During Onboarding:
- Clarify that employees are free to leave at any time. While a two-week notice is appreciated, it is not legally required.
- Explain that employers also have the right to terminate employment, as long as it is legal and properly handled.
- Emphasize fairness – Employees should understand that termination does not happen without reason, and that they will generally be given notice and opportunities to correct performance issues.
The Role of an Employee Handbook in Reinforcing At-Will Policies:
- Outlines how the company operates – It clarifies what is expected of employees and what they can expect in return.
- Details voluntary resignation guidelines – Encourages proper notice but confirms that employees can leave whenever they choose.
- Defines termination policies – Reinforces that termination must follow legal guidelines and that unemployment eligibility depends on the circumstances.
The Biggest Mistakes Employers Make with At-Will Employment
At-will employment provides flexibility for businesses and employees, but misusing it can lead to legal trouble, high turnover, and a toxic work environment.
Common Employer Mistakes with At-Will Terminations:
- Firing an employee simply because of a personality conflict – While an employer technically can terminate someone for poor behavior that isn’t illegal, firing an employee just because they are disliked can appear arbitrary and unfair, potentially leading to claims of wrongful termination.
- Failing to give employees a chance to correct issues – Terminating someone without first communicating the problem and providing an opportunity for improvement is poor management and can damage workplace morale.
- Not properly documenting issues – If an employee is let go without written records of performance discussions, the termination can appear sudden, unfair, or even retaliatory.
How to Use At-Will Employment Ethically and Effectively:
- Communicate clear expectations – Let employees know what is expected of them and what behaviors are unacceptable.
- Allow opportunities for improvement – Instead of firing immediately, give employees a chance to correct their mistakes when appropriate.
- Document everything – Keep written records of performance discussions, policy violations, and any necessary disciplinary actions.
- Conduct terminations professionally – Ensure that firings are handled with respect and transparency to maintain trust within the company.