Navigating at-will contracts: Expert insights on employee rights

May 16, 2023 - updated Sep 28, 2023

3 mins

Navigating at-will contracts: Expert insights on employee rights
Vivian Nunez

Vivian Nunez is a writer, content creator, and mental health podcast host.

The legalese behind becoming an employee feels (and reads) as confusing as the Terms and Conditions we “Accept” when making an in-app purchase. We know they’re important, but it’s hard to truly understand what they’re asking of us or what we fully agree to. While we can get away with simply clicking “Accept” in most of those situations, having a deeper understanding of the at-will contracts you commit to as a current or future employee can be beneficial. This is especially true because, according to the National Conference of State Legislatures, every US state (except for Montana) operates under at-will employment, so there’s no escaping having to sign one of these contracts at one point or another.

To help you feel more equipped, we spoke with Jessica Gomez, a licensed California attorney. Gomez specializes in employment law and answers some key questions about at-will contracts, what bargaining powers employees may have, and what rights employers definitely have.

What is at-will employment?

In the United States, 49 states operate under “at-will employment.” Under at-will employment, both the employer and the employee are free to terminate the contract at any time and for any reason. “However, even if the employment is at-will, an employee can still have contractual rights relating to their employment, such as compensation, commission, bonuses, and stock,” explains Gomez.

When in doubt, Gomez suggests employees look at their offer letters, emails, or any other form of communication between them and their employer, to understand their employment conditions better.

Gomez adds, “If an employee is resigning or is terminated, they should look at written correspondence and speak to an attorney to see if the termination is wrongful and whether there is a potential breach of contract. This is especially important if the employee receives other compensation besides their salary or an hourly wage.”

What rights does an employee have under an at-will contract?

“Sometimes an employee can negotiate terms of an employment agreement including their pay and commission structure,” explains Gomez. “However, it has now become increasingly difficult for employees to negotiate or waive arbitration agreements. An employee may also negotiate severance should they be presented with one.”

Gomez explains that arbitration is an employer-paid proceeding where one to three people, usually Judges (retired) or lawyers, decide the employee’s employment case: playing both jury and judge, should an employment agreement be taken to court.

Regardless of the state or the agreement, an employee is also always protected from an employer’s discrimination, retaliation, or harassment. Depending on the state, employees also have the right to dispute agreements limiting their ability to work for a competitor should they leave their current employer for any reason.

Gomez, who practices in California, offered context on how this would work in her state. “Employers will attempt to contract around many other issues, including non-disclosure agreements, trade secret confidentiality, and other protections for the company and to limit or stall employment competition with a competitor,” explains Gomez. “However, in California, those provisions generally are not enforceable, especially those that limit an employee’s ability to work for a competitor.”

What happens if you want to break an at-will agreement?

Your due diligence doesn’t end with only knowing what you’re getting into by signing an at-will agreement. You’ll also want to know how to most effectively get out of one before the need even presents itself.

Gomez suggests specifically making a note of your agreement’s stance on the basis of termination, remedy for breach of the agreement, and how much notice an employer will provide an employee before termination. “An at-will employee may depart from a company for any reason with or without notice,” explains Gomez. “An employer will generally cite the at-will presumption as the basis for terminating an employee.”

Gomez, who regularly represents employees against their employers for various claims, suggests checking in with your gut and a legal expert whenever termination is involved. Having a second pair of eyes on such a sensitive matter is always helpful. While the legal nature of a contract may seem intimidating, understanding it will make your time at your next job even more fruitful. You’ll feel confident from the minute you sign on the dotted line and understand fully what you are getting yourself into.

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