Despite being the most common American employment relationship, the term “at-will” still generates confusion among many employees and employers. Knowing what employment at-will entails, though, benefits both sides.
Workers and organizations gain clarity about their rights and limitations, making fewer unpleasant surprises.
Let’s take a closer look at at-will employment and what it means for all parties involved:
Identifying the type of employment relationship
Employment arrangements typically take on one of three forms.
The first, an individual employment contract, specifies terms agreed upon by an employee and an employer. The document spells out all particulars, such as work to be done, pay, hours, conditions for termination, notice before quitting, etc. After both sides sign, the contract is binding. Changes require renegotiation and mutual approval.
The second mode, a collective bargaining agreement (CBA), is similar. Sometimes referred to as a CBA, this type of contract exists between an employer and a union acting on behalf of its members. It outlines both sides’ rights and obligations; everyone involved must abide by what it states.
The third type, an at-will employment relationship, is most prevalent. In most U.S. states, an employee is considered in an at-will arrangement unless there is proof otherwise, such as an employment contract or collective bargaining agreement.
When a contract outlining specific employment terms is in place, that document supersedes at-will employment assumptions.
At-will employment prioritizes freedom for both sides over job security. Employers have the right to terminate employees at any time for any reason or no reason at all (except for illegal reasons – more details on this later). Likewise, employees have the right to leave the organization at any time.
(Checking the specifics of one’s state laws is a good idea for employers and employees. Montana, for instance, is not an at-will state and requires a “good cause” for termination after an established probationary period has been completed.)
What at-will employment means for employees and employers
Did you find a great new job and want to quit your current position? At-will employees can leave quickly. (Smart ones still provide the courtesy of two weeks’ notice. While not a legal obligation, such an action keeps from burning bridges and keeps rehireability options open.)
Need to restructure or reduce your workforce? Under at-will arrangements, employers can fire employees as they see fit – within legal boundaries.
At-will is not a justification for discrimination. Per federal law, organizations cannot fire workers based on things such as:
Race
National origin
Religion
Gender
Sexual orientation
Age
Disability
Likewise, someone cannot be let go for fulfilling a military service requirement, taking off time to vote, going to jury duty, taking FMLA (Family and Medical Leave Act) leave, or filing a worker’s compensation claim.
Also, employers cannot legally terminate employees for reasons that violate public policy. Thus, an employer cannot fire someone as retaliation for whistleblowing (including complaining about illegal activity) or pointing out health or safety violations.
The law also protects those who report discrimination or harassment from dismissal.
At-will arrangements give employers many advantages, including the ability to fire employees. The agreement also allows organizations to cut wages, change benefits, provide new job titles, limit work hours, assign different duties, and switch schedules.
Employees happy with such alterations may convince management that these new terms differ from what they signed up for under the original job description. Leaders may consider their discontent.
Ultimately, though, employers can change what they wish. They are within their rights in an at-will arrangement, and employees are within their rights if they choose to head out the door rather than accept.
How and why to explain at-will employment
Workers under contracts or collective bargaining agreements tend to know the setup. They likely possess a document that spells out their obligations and those of the employer.
Despite the prevalence of the arrangement, many people who work at-will need to realize they are doing so. Intelligent employers make efforts to rectify this situation.
Employers state the at-will status up front and often. They include it and use straightforward language to explain it in employment applications, employee handbooks, and onboarding sessions.
New employees may be asked to sign a statement saying they understand it. They occasionally mention it to employees in staff meetings and company newsletters.
What difference does publicizing make? Knowledge lays the framework for better understanding. Employees who understand at-will employment recognize the employer’s right to carry out actions such as downsizing, restructuring, and cutting costs.
They make less fuss if their job title changes or their duties shift. If they protest, employers can point to the explanation of at-will employment.
Informed employees also possess a better grasp of employment law. They learn more about what constitutes wrongful termination vs. what is acceptable within an at-will employment doctrine. They keep from wasting their time and yours pursuing cases without merit.
Maintaining respect
At-will employment gives both sides some power. Employees are not obligated to stay, and employers are not obligated to keep workers.
Employees can head out the door for any reason, from better wages or hours to simply desiring a career change. Knowing how easy it is for workers to leave should lead at-will employers to act in ways that encourage sticking around, especially in times of low unemployment.
Encourage retention
Developing a positive company culture, offering professional development opportunities, maintaining a psychologically safe environment, and showing genuine interest in people’s well-being are ways to encourage retention.
Intelligent employers also know that just because they can fire employees does not mean they should do so willy-nilly. Touting that power or terminating without cause can create a resentful, fearful workforce.
This situation does not inspire loyalty or workers going the extra mile for the company’s success.
While at-will employment allows immediate dismissal if an employer chooses, many companies put measures in place that alert individuals to problems that need to improve to continue working for the organization.
Written warnings bring issues to the struggling employee’s attention for rectification and serve as documentation should questions arise later about what led to the firing.
Such efforts also bolster the company’s image, as organizations generally want to avoid getting a reputation for being unfair to their employees.
Proceed with caution
Refrain from getting branded as an employer who seems to randomly fire people or institute changes in the name of being at-will employment. Employers with an attitude of “If you don’t like it, there’s the door” often see workers take that advice.
And when they do, they talk. Your name becomes mud among their network, on social media, and job review sites.
Lastly, tread carefully with other at-will advantages, too. Say you want to change an at-will employee’s job title. Doing so is legal, but it might lead to hard feelings.
Workers tend to view their job title as a symbolic representation of their worth to the company. Switching it to something else can come off as a demotion. While you may not have intended it as such, the effect on morale can be significant.
The bottom line: Don’t do something just because you can. Commit to communication, transparency, and respect regardless of the type of employment relationship.
More Resources:
Age discrimination examples in the workplace to avoid
Doctors note for work: What employers need & how to get one
Avoid legal issues with compliant job descriptions
The post At-will employment: Understanding its implications for employers and employees appeared first on Business Management Daily.