Employment Under Contract vs Employment At-Will

When a person is hired at a new company, they enter into one of two types of employment. Most workers are under what is known as at-will employment, which means they can be terminated at any time, for any reason. Employees under contract, however, have more protections against arbitrary termination. It can, however, be difficult sometimes to tell which type of employee you are. Understanding your rights may make all the difference if your employer tries to let you go. Here’s what you need to know about employment under contract vs employment at-will.

Employment Contracts

Employment contracts are only used in the minority of positions, usually when an employee is specifically head-hunted for their skills. The important fact to keep in mind about binding employment contracts is that neither party can abruptly terminate employment. The employee cannot leave, and the employer cannot fire the employee without appropriate cause. It is also important to understand exactly what constitutes an employment contract, as it varies between states.

One of the most common examples is the employee handbook. In other states, the handbook can constitute an implicit contract, which gives some protection to an employee even if it is not explicitly discussed. South Carolina, however, has a law which allows an employer to “conspicuously disclaim” any explicit or implied employment contract that might otherwise have been created by the handbook. The balance of power in the state is different than it might be in, say, Georgia. 

At-Will Employment

While contracts can provide some protection against abrupt termination, a majority of employees in the United States work at-will, which means that, generally, an employer can terminate a worker without cause. However, ‘without cause’ does not mean ‘without reason.’ There are certain situations in which a termination might be seen as discriminatory or otherwise unethical, because even in business law, there are certain tenets that the courts believe are beneficial to uphold.

There are a handful of situations that courts have characterized as specific exceptions to the at-will doctrine. In other words, there are times when an at-will termination may be overturned because it is seen as fundamentally unfair or inappropriate. Perhaps the most commonly seen exception is known as the ‘public-policy’ exception, which holds that firing the employee in a specific situation would shock the conscience of the average person. For example, if an employee is fired because they refused to comply with an illegal order from their employer, most courts would find that against public policy and possibly reinstate the worker.

Get Legal Help Today

While at-will employment is the norm throughout the country, it is crucial for an employee or a prospective employee to know their rights regardless of which status they have with their employer. If you have questions or concerns about at-will or contract employment, attorney A. Christopher Potts has many years’ experience with these matters. The firm of Hitchcock & Potts is happy to assist you. Call us today to schedule a consultation.