Which States Have At-Will Employment?

Answer: Almost all of them.

In fact, the United States is the only developed country where at-will employment is the standard. While many other countries have more employee-centered laws, the U.S. tends to be more business-friendly.

As of 2024, 49 out of 50 states (plus the District of Columbia) follow at-will employment laws by default — with Montana being the sole exception.

At-will employment means that, in most states, employers have the right to terminate an employee “at will” for any legal reason. Even if it’s only because their services are no longer required, employers can let employees go anytime.

But as straightforward as this may seem, the rules around at-will employment are not always so clear. As an HR leader, it’s critical to stay informed about the specific termination laws in your state to make sure you remain in compliance.

Here’s your guide to understanding at-will employment and which states follow it.

Legal Disclaimer

This content should not be considered legal advice. Criterion HCM provides this information to help improve your understanding. However, for the most accurate details regarding at-will employment or related laws, consult your local legislation or a lawyer with expertise in employment law.

What Is At-Will Employment?

At-will employment means that an employer can fire an employee at any time, for any legal reason (or sometimes without a reason) without facing legal consequences. This flexibility works both ways: employees are also free to leave their jobs at any time without needing to give notice or a reason. In both cases, neither party will face legal repercussions.

At-will employment also allows employers to change the terms of employment at their discretion. They can modify an employee’s hours, responsibilities, pay, benefits, or any other aspect of the job, whenever they choose, and without prior notice.

Federal Laws Still Apply

While at-will employment offers broad flexibility, it doesn’t override federal protections.

For instance, discrimination remains illegal across all states. Employers cannot fire or discriminate against someone based on protected characteristics such as race, religion, gender, or disability.

Whistleblower protections also exist, meaning employees can’t be fired for reporting illegal activities like safety violations, harassment, or financial fraud.

Benefits of At-Will Employment

Flexibility for Businesses - At-will employment offers significant flexibility for organizations. It allows businesses to adapt quickly to changing economic conditions or operational needs without being bogged down by lengthy legal processes.
Lower Hiring Risks - This also streamlines the hiring process. Since it's easier to terminate an employee if they aren’t the right fit, businesses don’t have to be overly cautious or hesitant when taking a chance on a new hire. This of course helps new candidates get more opportunities.
Freedom for Employees - With at-will employment, employees can leave their jobs whenever they choose, without worrying about contractual obligations or long notice periods.

Why At-Will Employment is Controversial

Job Insecurity - Critics argue that at-will employment can leave employees vulnerable to unpredictable job conditions and job insecurity. That lack of job protection may lead to increased anxiety, since employees are constantly aware that they could be let go at any time, without warning.
Fighting Wrongful Termination Is Hard - While federal laws prohibit firing someone based on protected characteristics, not every employee has the resources to hire a lawyer and pursue legal action if they believe they were wrongfully dismissed.
Instability of Job Roles - The freedom given to employers to change job terms (such as pay, hours, or responsibilities) without notice can cause uncertainty for employees. For some, this makes it harder to plan long-term or feel secure in their current role.

For better or for worse, at-will employment is the default legal framework for most U.S. states. But each state has its own unique laws (in addition to federal protections). As HR leaders it’s important to understand the legal landscape and ensure your organization’s policies are in full compliance.

Which States Are At-Will States in 2024?

As mentioned earlier, almost all U.S. states (and the District of Columbia) follow at-will employment laws, except Montana. But that doesn’t mean employers can always terminate workers without cause.

There are four main exceptions that complicate at-will employment in certain scenarios. Within the common law exceptions, there are many nuances, which vary between one state and the next. Always do your research on state laws before creating any employment policies.

NOTE: At-will employment primarily applies to traditional W-2 employees, not independent contractors. Contractors operate more like businesses and aren’t afforded the same job security or employment rights as regular employees. That’s one reason it’s important to make sure your workers are classified correctly.

Public Policy Exception

One of the most common exceptions to at-will employment is the public policy exception, which prohibits employers from firing employees for reasons that violate public policy or legal rights. Essentially, an employee cannot be fired for refusing to break the law or for exercising certain legal rights. For instance, employees cannot be dismissed for:

Refusing to comply with illegal requests, (e.g., committing perjury or fraud).
Performing public duties (e.g., serving on jury duty, voting, or joining the National Guard).
Whistleblowing (reporting illegal activities like safety violations or financial malpractice).
Filing a workers' compensation claim after being injured on the job.
Organizing or joining a union to collectively bargain for better working conditions.

42 states (and the District of Columbia) recognize this public policy exception in some way, including:

Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nevada
New Hampshire
New Jersey
New Mexico
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming

The states that don’t (entirely) recognize public policy exception include:

Alabama
Florida
Georgia
Louisiana
Maine
Nebraska
New York
Rhode Island

These states have more limited protections when it comes to public policy, allowing employers greater freedom to terminate employees without legal constraints.

Implied Contract Exception

The implied contract exception is another deviation from at-will employment. This means that even without a formal written contract, an employer’s verbal promises or written statements (in handbooks or policies) can create a reasonable expectation of job security.

For example, if an employer consistently assures an employee of long-term employment or offers informal guarantees, this could form an implied contract. If an employee claims wrongful termination, that implied contract could be used in court, even if nothing was put in writing or in the employment contract.

This exception is recognized in 36 states (and the District of Columbia), including:

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
District of Columbia
Hawaii
Illinois
Iowa
Kansas
Kentucky
Maine
Maryland
Michigan
Minnesota
Mississippi
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Dakota
Ohio
Oklahoma
Oregon
South Carolina
South Dakota
Tennessee
Utah
Vermont
Washington
West Virginia
Wisconsin
Wyoming

In these states, employers need to be cautious about what they communicate to employees regarding job security — even verbally or in employee handbooks.

Implied Covenant of Good Faith and Fair Dealing

The implied covenant of good faith and fair dealing is designed to prevent employers from acting in bad faith when terminating employees. Essentially, it helps prevent employers from using at-will employment as an excuse to fire someone for malicious reasons or to dodge responsibility.

Under this rule, employers can’t fire an employee to:

Avoid paying healthcare or retirement benefits.
Dodge commission payments for work already performed.
Misrepresent the reasons for termination (e.g. fabricating performance issues).

Introduced by the California supreme court in the 1980s, the implied covenant of good faith and fair dealing is perhaps the least common. Today, only 11 states observe this rule, including:

Alabama
Alaska
Arizona
California
Delaware
Idaho
Massachusetts
Montana
Nebraska
Utah
Wyoming

Employment Contracts and CBAs

In all 50 states (and D.C.), employment contracts and collective bargaining agreements (CBAs) can supersede at-will employment. If an employee is under a contract with specific conditions for termination, that agreement must be honored regardless of state law. This includes both individual contracts and collective agreements negotiated by unions on behalf of workers.

These agreements often define “just cause” for termination, meaning an employee can only be dismissed for legitimate reasons such as poor performance, misconduct, or breach of company policy.

What Makes Montana Employment Law Different?

Montana is unique in that it doesn’t fully adhere to the traditional at-will employment doctrine. However, it doesn’t completely abandon it, either.

The key difference lies in the state's Wrongful Discharge from Employment Act (WDEA), which protects employees from being fired without just cause — but only after a certain period.

The Wrongful Discharge from Employment Act (WDEA)

Established in 1987, the WDEA in Montana says that after an initial probationary period, an employee can only be terminated for "good cause." This law stands in contrast to the other 49 states, where at-will employment remains the default throughout an employee's tenure.

During the standard 12-month probationary period (unless otherwise specified at the time of hire), at-will employment still applies, meaning employees can be dismissed for any reason, much like in the rest of the country.

However, once that probationary period ends, Montana’s rules change. Employers can no longer fire an employee for just any reason — it must be for a legitimate, performance-related reason (or “just cause”).

Just Cause or Good Cause

In Montana, "just cause" or “good cause” refers to a termination that’s based on an employee’s performance or behavior. This can include things such as:

Not meeting key performance indicators (KPIs).
Violating company policies.
Breaching the terms of an employment contract.

The definition of good cause is similar to the implied covenant of good faith found in some other states, but Montana’s law is more clearly defined. As a result, it is easier to enforce.

Other states may require proof that a termination was simply not made in bad faith. Montana’s law provides clear guidelines that employers must follow There is a firm requirement that the reason for termination must be well-documented and based on actual performance or conduct issues. In other words, Montana employers must only fire an employee for a “good” reason, not just “a reason.”

NOTE: While employers have stricter guidelines for termination, employees retain their right to leave the job at any time, for any reason, without penalty — even after the probationary period.

What Is Montana’s Probationary Period?

Montana’s default probationary period lasts 12 months (unless otherwise specified in the employment contract) and cannot exceed 18 months. During this time, employees can still be terminated without cause, making it the one timeframe where at-will employment laws fully apply in the state.

Once the probationary period ends, the employee gains the protections outlined by the WDEA. Sometimes, the end of the 12-month period also includes a formal probationary review, at which point both the employer and employee assess the progress made during the first year.

At-Will Employment Compliance Tips

While at-will employment provides flexibility, it’s essential for HR leaders to ensure compliance with state and federal laws. Here are a few tips to help you navigate the complexities of at-will employment while fostering a fair and productive work environment.

Be Consistent in Disciplinary Practices

No one likes to focus on disciplinary actions. But they are an essential part of managing employees who may not be the right fit or who cause disruptions in your organization. The key is to remain consistent and fair in how you administer discipline. Establish clear disciplinary procedures and related policies to make sure any termination decision is justified and unbiased.

Consistency also protects your organization from claims of wrongful termination or discrimination. By following a standardized process, you ensure that employees are treated equally and that decisions aren’t influenced by favoritism or subjective judgment.

NOTE: Even if your state abides by at-will employment, and you terminate someone completely within the law, that employee may still claim wrongful termination anyway. You may still face difficult lawsuits, even if you are in full compliance. This is all the more reason to document as much as possible in this regard, and even implement performance improvement plans where necessary.

Know Your State and Local Laws

Employment laws vary widely by state, and they’re constantly evolving. Keeping up with these changes is critical to maintaining compliance and avoiding legal pitfalls. Since not all common law exceptions apply to every state, it’s important to understand the specifics of the laws where your company operates. When in doubt, consult a lawyer who specializes in employment law to make sure you’re navigating these laws correctly.

Document Everything

One of the best ways to protect your organization from wrongful termination claims is with thorough documentation. This includes documenting performance evaluations, disciplinary actions, and even casual conversations that could imply employment security. Proper documentation is key to proving that any employment decisions were based on legitimate business reasons rather than personal bias or misunderstanding.

Using hiring and recruiting software that allows you to track decisions, comments, and employee performance can be invaluable here.

Focus on Retention Strategies

Just as at-will employment lets you terminate employees freely, it also gives employees the freedom to leave whenever they choose — and in recent years, many have done so. The Great Resignation underscored the importance of employee retention in longevity as an organization.

Investing in employee retention strategies can significantly reduce turnover and the costs associated with recruiting and training new hires. When employees feel valued and see opportunities for growth, they’re more likely to stay. High retention benefits everyone by fostering a stable workforce that understands your processes and contributes to long-term success. It’s HR’s responsibility to balance employee goals and satisfaction with the needs of the organization.

Final Thoughts

As an HR leader, it’s crucial to stay on top of employment law in every state. Wrongful termination lawsuits can be costly and damaging to your organization, especially in states where "just cause" laws are in place. But more than that, it’s always important to carefully consider each decision regarding employee termination to ensure compliance and fairness.

That said, the ultimate goal is to avoid these situations altogether. By building a team of employees who are a great fit from the start, you can reap the benefits of their long-term dedication to your mission. However, achieving this requires strong hiring practices and solid retention strategies.

To make these strategies work, you need HCM software that can streamline and enhance your decision-making processes. Criterion offers a unified solution that covers recruiting, talent engagement, HR, and payroll, allowing you to put people at the center of your operations. With Criterion, HR leaders can solve complex challenges by making data-driven decisions that improve both hiring and retention at scale.

Streamline hiring workflows, document key decisions, implement custom training programs, integrate with any third-party software — and much more. Criterion helps you enhance the employee experience at every stage.

Discover a configurable HCM solution designed with real HR leaders and employees in mind. Book a Criterion demo today.