At-Will Employment Contract

Legal Protections & Exceptions

While at-will employment is legal in all 50 U.S. states, significant federal and state-level exceptions protect employees from wrongful termination.

Federal Exceptions

Employers may not terminate an employee for reasons including:

• Discrimination (e.g., race, gender, age, religion, or national origin)
• Refusal to take a polygraph test
• Immigration status, if the employee is legally authorized to work
• Reporting workplace hazards to OSHA

State Exceptions

1. Public Policy: Employees cannot be fired for fulfilling legal duties or refusing to break the law. Not recognized in: AL, FL, GA, LA, ME, NE, NY, RI.
2. Implied Contract: Statements in employee handbooks or verbal assurances may create binding promises of job security. Not recognized in: DE, FL, GA, IN, LA, MA, MO, MT, NC, PA, RI, TX, VA.
3. Covenant of Good Faith: Protects employees from terminations made in bad faith (e.g., being fired right before receiving benefits). Recognized in only 11 states, including CA, MA, and MT.

View the At-Will Exceptions By State Table.

 

What’s in an At-Will Contract?

Here’s what the At-Will Employment Contract usually covers:

• Job Title & Duties – What the employee is responsible for
• Pay & Schedule – Hourly or salary, payment frequency, bonuses
• Benefits – Health insurance, PTO, retirement contributions
• Termination Terms – How either party can end the contract
• Confidentiality – Protecting company info
• Non-Compete (Optional) – Preventing the employee from joining a competitor

 

How to Complete an At-Will Employment Agreement (Step-by-Step)

Step 1: Identify the Parties

• Enter the effective date of the agreement.
• List the employer’s legal name and address.
• Specify whether the employer is an individual or a business entity.
• Provide the employee’s full name and address.
• State the employee’s job title or position.

 

Step 2: Define Employment Terms

Responsibilities

• Detail the employee’s role and primary duties.
• Indicate whether the position is full-time or part-time.

At-Will Clause

• Specify how many days’ notice is required if the employee resigns.
• If applicable, include severance terms.
• Repeat the same for employer-initiated termination.

Compensation

• State the employee’s wage (hourly or salaried).
• Choose the pay frequency (e.g., weekly, monthly).
• Outline any commission structures or bonus eligibility.

Benefits

• List any employer-provided benefits such as health insurance, retirement contributions, etc.

Reimbursements

• Check applicable reimbursable expenses (e.g., travel, lodging).
• Specify additional eligible items if needed.

 

Step 3: Additional Employment Conditions

Ownership Interest

• State whether the employee will receive any equity in the company.

Trial Period

• Specify a probationary period (if any) before full benefits take effect.

Time Off

• Vacation days per year and what happens to unused time (e.g., rollover, payout).
• Personal/medical leave: paid or unpaid, and how unused days are handled.
• Number of recognized federal holidays.

 

Step 4: Confidentiality & Non-Compete

Confidentiality

• Set how long confidentiality obligations remain in effect after termination (in months or years).

Non-Compete (optional)

• Identify restricted industries or competitors.
• Define the geographic scope and duration.
• List any additional limitations relevant to the role.

 

Step 5: Workplace Policies

Representation

• Clarify if the employee is permitted to act on behalf of the employer.

Attendance

• Set expectations for missed days (unexcused absences) within 12 months.

Disability Clause

• Define how many days of advance notice the employer must give to terminate the agreement due to long-term disability.

 

Step 6: Legal and Contact Details

Notices

• Include mailing addresses for official notices for both the employer and employee.

Governing Law

• Specify the state whose laws will govern the agreement.

 

Step 7: Signatures

Both parties must review and sign:

• The employer (or authorized representative) signs, dates, and includes name/title.
• The employee signs, dates, and lists their name and title (if applicable).

 

At-Will Exceptions – By State (Table)

State	Public Policy Exception	Implied-Contract Exception	Good-Faith Exception
Alabama	No	Yes	Yes
Alaska	Yes	Yes	Yes
Arizona	Yes	Yes	Yes
Arkansas	Yes	Yes	No
California	Yes	Yes	Yes
Colorado	Yes	Yes	No
Connecticut	Yes	Yes	No
Delaware	Yes	No	Yes
Florida	No	No	No
Georgia	No	No	No
Hawaii	Yes	Yes	No
Idaho	Yes	Yes	Yes
Illinois	Yes	Yes	No
Indiana	Yes	No	No
Iowa	Yes	Yes	No
Kansas	Yes	Yes	No
Kentucky	Yes	Yes	No
Louisiana	No	No	No
Maine	No	Yes	No
Maryland	Yes	Yes	No
Massachusetts	Yes	No	Yes
Michigan	Yes	Yes	No
Minnesota	Yes	Yes	No
Mississippi	Yes	Yes	No
Missouri	Yes	No	No
Montana	Yes	No	Yes
Nebraska	No	Yes	No
Nevada	Yes	Yes	Yes
New Hampshire	Yes	Yes	No
New Jersey	Yes	Yes	No
New Mexico	Yes	Yes	No
New York	No	Yes	No
North Carolina	Yes	No	No
North Dakota	Yes	Yes	No
Ohio	Yes	Yes	No
Oklahoma	Yes	Yes	No
Oregon	Yes	Yes	No
Pennsylvania	Yes	No	No
Rhode Island	No	No	No
South Carolina	Yes	Yes	No
South Dakota	Yes	Yes	No
Tennessee	Yes	Yes	No
Texas	Yes	No	No
Utah	Yes	Yes	Yes
Vermont	Yes	Yes	No
Virginia	Yes	No	No
Washington	Yes	Yes	No
West Virginia	Yes	Yes	No
Wisconsin	Yes	Yes	No
Wyoming	Yes	Yes	Yes

Source: “Employment at Will”