How to Hire "at Will" Employees

Hiring “At Will” Employees

Check your state law. In the United States, 49 out of 50 states presume that an employee is an “at will” employee. The one exception is Montana. If you work in any state but Montana, then you can assume that a court would consider all employees “at will” unless you modify the “at will” status with a contract. Typically, employment contracts are express, written contracts. But you can also create what is called an “implied contract” through your words and actions. Accordingly, hiring an “at will” employee will require that you don’t do anything that a reasonable person would believe creates an implied contract.

Advertise the job as “at will.” In your job advertisement, you can state that the job is “at will.” If you think applicants won’t understand what that means, you can say that there is “no guarantee of continued employment.” You could also state that the job is “month to month” or “week to week.” Use whatever language you think conveys that applicants will not be guaranteed employment.

Avoid making promises during interviews. Any statement you make during the hiring process could be interpreted as creating a promise of guaranteed employment. Accordingly, you shouldn’t say anything in the interview that sounds like a promise of guaranteed employment: Don’t tell the applicant that he has a full year to learn the job and won’t be fired during that period. That’s a promise of continued employment. Avoid saying that employees get pay raises every year. This also can create an implied contract. Also remind the applicant that you are hiring an “at will” employee. You can rely on this statement later on if the worker tries to claim that he or she had an employment contract.

Review your offer of employment letter. It is common practice to send a new hire an offer of employment. The letter typically includes information about the start date and the starting pay rate. You should look at your offer of employment letter closely so that you don’t create an implied contract: Make sure that the letter says employment is “at will.” Include only the job’s starting date, not any end date. If you include an end date, then the employee might think that he or she is guaranteed employment during the term. Don’t list an annual salary. Instead, state pay in payroll increments. For example, you can state how much the person will be paid in a week. Don’t ask the employee to sign the letter.

Get new hires to sign an “at will” agreement. You should draft an “at will” agreement and make sure that new employees sign it. The agreement should contain the following: Title the document “‘At Will’ Employment Agreement.” In the opening paragraph, repeat that you are creating an “at will” agreement. Sample language could be, “This is an ‘At Will’ employment agreement between [name the employer] and [name the employee]. In consideration of the mutual promises set forth in this agreement, the parties agree as follows….” Repeat that employment is “at will.” You could write, “This is an ‘At Will’ employment agreement. Nothing in the Employer’s actions, policies, or in this document shall alter the ‘At Will’ nature of Employee’s status. Employee further understands that Employer may terminate employment at any time for any reason (or no reason), provided that the termination does not violate federal or state law.”

Maintaining the “At Will” Relationship

Remind employees that they are “at will.” You should periodically remind employees that they are not guaranteed employment but are “at will” employees. You don’t need to go around reminding your employees every week that they are an “at will” employee. That could be awkward. However, you can remind the employees in other ways. For example, if you perform annual reviews, then you can put the employee’s name on the top of the review form. Include a notation beside the name: “Employment type: ‘at will.’” This is a reminder that the employee is an “at will” employee.

Train managers in what not to say. You can create an implied contract by making oral promises. For example, if a manager says, “You’re such a great employee, we’ll never fire you!” then the manager could be creating an implied contract. You need to train managers in what not to say: Don’t make promises of pay raises. You can’t say, “Wages always go up here, about 3% a year.” A statement like that could create a reasonable expectation of a pay raise. Don’t say, “Taking time off is no problem around here. You unofficially get three weeks of vacation.” That sounds like a promise that the employee will get vacation time. Avoid saying, “We never fire someone unless they get a chance to improve their work effort.” That sounds like a promise that an employee can’t be let go for any reason. With a statement like this, a manager is altering the “at will” relationship.

Review your employee manuals. Your employee manuals and handbooks can create an implied contract. Accordingly, you should go through the manuals and remove anything that looks like a promise. Instead, you should replace that language with the following: A reminder that employees can be fired at any time. A statement that you don’t need “good cause” to fire someone. Be sure to state this explicitly. Also avoid including a list of actions which warrant firing. If you include a list, then it looks like you are defining “good cause” for firing someone. Another reminder that the employee is “at will.” Use this particular language and mention that the employee is “at will” in several places throughout the manual or handbook.

Firing “At Will” Employees

Notify the employee of performance problems. You should begin creating a paper trail to support your firing of the employee. Technically, the law allows you to fire an “at will” employee for any reason. However, an angry employee could still turn around and sue you for discrimination or claim that you had an implied contract. For this reason, you should follow your normal discipline and termination procedures. Generally, you should do the following: Tell the employee the specific problems you have with his or her performance. Then establish goals and a reasonable timetable for meeting those performance goals. For example, if an employee is always late, then state that you want the employee to arrive to work on time for the next 20 business days. Monitor the employee’s progress. If the employee fails to meet performance goals, then document it.

Document your reasons for the firing. Before laying off an “at will” employee, you should have sufficient documentation of the employee’s poor work performance. You should gather all of the following that apply: written reprimands employee evaluations which note the poor performance customer complaints email communications with the employee attendance records

Tell the employee the reason for the termination. Although you are not legally required to give a reason, you should do so nonetheless. Make sure your reason is precise and accurate. Don’t give a meandering explanation of the problem. Also don’t apologize. To help craft a precise reason, sit down and write in two sentences why you are firing the employee. Work on your written explanation until it is as concise as possible. When terminating the employee, you should have the employee’s direct supervisor present. Also have a member of management. The presence of two people suggests that firing the employee was a joint decision.

Offer severance. You can reduce the risks of a lawsuit if you offer the employee severance. In exchange for the severance, have the employee sign a waiver and release form. By signing the release, the employee agrees to waive any future wrongful termination lawsuit.

Hire a lawyer. You will probably need a lawyer’s assistance at many times in the life of your business. For example, the lawyer can review your employee manuals and handbooks and draft a waiver and release. To find a qualified employment lawyer, ask other businesses in your industry. See if they would recommend their lawyer. You can then schedule a consultation with the lawyer to discuss your problem. Also see Find an Employment Lawyer for additional tips.