The default rule under United States labor laws is that employment is “at will,” both at the will of the employer and at the will of the employee. At-will employment means that an employee can quit their job at any time for any reason or no reason. Likewise, an employer can fire an employee at any time for any reason (so long as the reason is not illegal) or no reason, unless there is a specific, federal or state legal or contractual protection against termination. In the United States, Montana is the only state that has not adopted at-will employment. To illustrate the difference, an employer in Montana may only terminate an employee who has completed an initial probationary period for “good cause,” which means that there has to be a reasonable, work-related reason for termination, such as the employee’s poor performance, the employee’s disruption of the business, or another legitimate business reason.
As a practical matter, employers should consult with their corporate attorney or employment counsel if a termination is potentially contentious, even in the vast majority of at-will employment states. To minimize the risk of employment litigation, employers need to proactively ensure compliance with employment laws and rules covering employees over the age of 40, wages and hours, classification of workers, workplace conditions, harassment, discrimination, retaliation, pregnancy, and family and disability leaves, among others.