At-will employment is often misunderstood by both employers and employees. The idea of “at-will” is that employment can be terminated at any time (with or without reason) by either the employer or the employee. If not explained correctly, an At-Will policy can make employees feel like they are not valued; that the organization does not want to commit to them. But At-Will also gives the employee the freedom to change jobs on-a-whim.
Advantage for Employer: At-Will allows an organization to remove a bad employee or an unneeded employee quickly. Everyone has heard the horror stories of bad teachers that could not be removed due to tenure. At-Will saves an employer from getting stuck in a similar situation. The employee still might win unemployment benefits, but suing you for breech of employment contract is far less likely. If an employee gives notice, you do not have to let them work until that date- especially if they start goofing off on-the-job.
The employer also has more freedom to move employees to different positions as the employer’s needs shift.
Advantage for Employees: For most employees, At-Will is seen as a cold, heartless, and selfish act by the employer. However, At-Will also helps the employee in certain ways. With At-Will, the employee can quit your organization whenever he or she wants. There is no need to give “two weeks notice” or stay to fulfill an employment contract.
Also At-Will frees the employer up to find the best employees, which means better co-workers for that employee. In a good organization, an At-Will employment policy helps in creating the best team possible.
Work Contracts: The other big option is an employment contract, which is more complex to create so that it is fair for both sides. Typical people on employment contracts include unionized staff, professors, sports players, and key top officers (CEOs, CFOs, etc.) A contract means the employee cannot be demoted, moved, or fired without extreme problems, but it also means that the employee cannot easily quit either. The classic example comes up in sports, when a player wants to go to a new team but his current team refuses to release his contract. A business might want certain, hard-to-replace personnel, under work contracts but it should be used only for those vital positions (like a general manager, research scientist, or chief financial officer).
If your organization has employees under contract it could find itself in a
difficulty should it want to shift staff to new responsiblities (due to new opportunities, changing demographics, etc.) or need to reduce staffing due to a drop in revenue. The organization may still have to pay that salary no matter what. That can be seen in a sports team that is forced to still pay a player that is on the disabled list due to an injury or when a company fires its CEO yet still is contractually required to pay millions as a payout.
Some experts recommend taking a third approach: having a “good cause” or “just cause” employment policy. This is an attempt to soften that harshness of At-Will, but it is difficult for the employer to enact correctly. Such a policy must be carefully designed to prevent any implied work contract or guarantee of continued employment. We would recommend having a labor law attorney draft such a policy to make sure it is well crafted.
Locations that do not allow at-will employment: Currently, only the state of Montana does not recognize at-will employment. Companies in Montana must show just-cause for any terminations.
Put your At-Will employment policy in writing. Consider having a professional design an Employee Handbook for your organization, including a strong at-will employment policy. We recommend New Wind Business Solutions: