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Employment Contract and At-Will Employment

At-will employment is a practice that states an employer can terminate an employee without good cause and at any time during their employment. At-will policies are available for employers in all states except for Montana, which protects employees after they have completed a probationary period from being fired without cause. In all other states, unless there is documentation that details otherwise, the law presumes that all employment is at-will and employees can be legally terminated without cause.

This is one of the reasons that many individuals who are in high demand in their prospective fields choose to negotiate their prospective employment with a company utilizing an employment contract.

Most Employment Contracts Are At-Will

Unless it is specifically stated in a document or orally stated as company policy, nearly all employment is considered at-will. Many employers will actually take measures to point out in their employee manuals and policies that they are an at-will employer, and regardless of circumstances, they retain the ability to terminate any employee whenever they wish.

At-Will Policies Offer Flexibility

While this does not foster a particularly inviting employment atmosphere, these policies are mostly adopted to give companies the flexibility to change their workforce whenever market forces dictate without legal repercussions from terminated employees.

It also means that companies can terminate problem employees without having to go through a lengthy series of warnings and write-ups, which does serve to streamline the process and reduce costs.

When a Less Flexible Relationship Is Required

Employees who are recruited by a company because they have talents or skills that are in high demand cannot simply subject their new employment to the whims of a company that might want to terminate them in the future because it is expedient for the company to do so. This is where the employment contract becomes an invaluable tool in the new employment negotiation process.

An employment contract is a legal document that details all of the stipulations of a person's employment. Among other things, an employment contract will:

  • document the obligations each party is expected to uphold during the relationship;
  • specifically declare the terms of the employment;
  • state how termination will be addressed; and
  • contain all the other provisions relating to the employment, such as salary and wage information and any benefits included in the arrangement.

The Employment Contract Protects the Employee from Arbitrary Termination

Since nearly all aspects of the employment agreement are flexible and can be negotiated, many individuals take the opportunity to have language in the agreement that protects their employment from termination without cause. This can be a simply worded phrase that states good cause must exist for termination up to a contracted length of employment that can only be terminated by criminal conduct on the part of the employee.

There are no set rules for what can appear in an employment contract, so it is up to the employer and prospective employee to negotiate the exact terms of the agreement. Having wording expressly forbidding termination without cause in the contract is the best way for an employee to protect themselves at-will employment laws.