What is employment-at-will?

The phrase “employment at-will” describes a relationship between an employer and employee that can be terminated at any time and for any reasons. In Texas, the relationship between an employer and employee is presumed to be at-will. Therefore, in the absence of an agreement or contract stating otherwise, the relationship can be terminated by either party without cause or notice, before or after work has begun. For example, an at-will employee can be fired for any reason or at any time despite how long he has worked or how well he has performed—an employer can fire an at-will employee simply because he does not like the employee. The employer has no duty to treat the employee fairly or justly, and an unfair or unjust termination does not mean that the employer has done something illegal. On the other hand, an at-will employee can also quit whenever he wants to—he cannot be forced to work for an employer.

To overcome the presumption against at-will employment, an employee has to show that the employer clearly intended to agree to only fire the employee under specific circumstances or conditions, such as employee misconduct or unsatisfactory performance. Parties can also modify their employment relationship by contract, by expressly agreeing to show cause before firing or having their conduct indicate such an agreement.

Further, the employment at-will doctrine is not without limits. Certain statutes impose limitations on when and how an employer can fire an employee. For example, under Title VII of the Civil Rights Act of 1964 an employer cannot fire an employee on the basis of race, color, national, origin, religion, or sex. Similarly, the Age Discrimination in Employment Act protects employees forty years of age and older from being fired because of their age. An employer also cannot fire an employee: for filing a workers’ compensation claim, for having a disability, based on genetic, for taking leave granted by the Family and Medical Leave Act of 1993, for joining or participating in a union or filing an unfair labor practice charge, in order to interfere with that employee’s retirement benefits, for filing a complaint or testifying as to violations of occupational health and safety standards, for filing a complaint about a wage and hour violation, for providing information to the Securities and Exchange Commission relating to fraud against shareholders, based on the employee’s bankruptcy or indebtedness, based on employee’s service on a jury or absence for the purpose of voting, or for being called to active duty in the military.

In Texas, there is a narrow exception to the employment at-will doctrine. An employee can bring a claim for wrongful discharge against his employer if the employee proves that the sole reason he was fired was that he refused to do an illegal act. To fall under this exception, the employee must have refused to the do some act, the act must have been illegal under criminal law, and the act must have been requested by the employer. Also, this refusal must have been the only reason for firing the employee. For example, an employer couldn’t fire an employee for refusing to falsify records, such as insurance forms or federal administrative forms. Further, an employer couldn’t fire an employee for refusing to misrepresent the trade-in value of a car, which would have been a criminal act.

However, this exception does not apply to employees who are fired for reporting an illegal act. While the Texas Whistleblower Act protects public employees from being fired for reporting illegal acts, a private employer does have the right to fire an at-will employee for whistleblowing. The exception also would not apply if the employee agreed to do the illegal act in question, or the act only violated a civil, not criminal statute.