At-will Employment

At-will employment is a doctrine of American law that defines an employment relationship in which either party can break the relationship with no liability, provided there was no express contract for a definite term governing the employment relationship and that the employer does not belong to a collective bargaining group (i.e., has not recognized a union). Under this legal doctrine:

Several statutory and judge-made exceptions to the doctrine exist, especially if unlawful discrimination is involved regarding the termination of an employee. These restrictions have been controversial; an empirical study in 1992 by the RAND Corporation showed that imposing exceptions to at-will employment resulted in a long-term drop in aggregate employment of two to five percent.

The doctrine of at-will employment has been criticized as predicated upon flawed assumptions about the inherent distribution of power and information in the employee-employer relationship and for its brutal harshness upon employees. However, scholars in the field of law and economics such as Professors Richard A. Epstein and Richard Posner credit employment at will as a major factor underlying the strength of the U.S. economy. At-will employment has also been stressed as a significant reason for the success of Silicon Valley as an entrepreneur-friendly environment.

At-will employment disclaimers are a staple of employee handbooks in the United States. It is common for employers to define what at-will employment means, explain that an employee’s at-will status cannot be changed except in a writing signed by the company president (or chief executive), and require that an employee sign an acknowledgment of his or her at-will status.