Study smarter with Fiveable
Get study guides, practice questions, and cheatsheets for all your subjects. Join 500,000+ students with a 96% pass rate.
At-will employment is the default rule in most American jurisdictions—meaning employers can fire workers for any reason, or no reason at all. But here's what you're really being tested on: the legal boundaries that limit this employer power. Understanding these exceptions requires you to think about where employee protections come from—whether that's statutory law, common law doctrines, or private agreements between parties.
These exceptions aren't random carve-outs; they reflect fundamental legal principles about public policy, contractual obligations, fairness, and statutory rights. On exams, you'll need to identify which exception applies to a given fact pattern and explain why that protection exists. Don't just memorize the names—know what legal theory each exception represents and how courts analyze these claims.
Courts developed these judge-made doctrines to address situations where strict at-will employment produced unjust results. These exceptions vary significantly by state, so jurisdiction matters.
Compare: Implied Contract vs. Covenant of Good Faith—both are common law exceptions, but implied contract focuses on what was promised while good faith examines the employer's motive. If an exam question emphasizes suspicious timing (fired right before a bonus), think good faith; if it mentions handbook language, think implied contract.
These exceptions come from federal and state legislation that explicitly limits employer discretion. Unlike common law exceptions, statutory protections apply uniformly within their jurisdiction.
Compare: Whistleblower Protection vs. Refusal to Perform Illegal Acts—whistleblowers report wrongdoing by others, while refusal cases involve employees asked to personally participate in illegal conduct. Both protect against retaliation, but the employee's role differs significantly.
These exceptions arise from private agreements that modify the default at-will relationship. The key question is whether a binding contract exists and what its terms require.
Compare: Employment Contracts vs. Promissory Estoppel—contracts require mutual assent and consideration, while promissory estoppel fills gaps where no formal contract exists but fairness demands enforcement. Promissory estoppel is a fallback theory when contract claims fail.
This doctrine addresses situations where the employee technically resigns but claims the resignation was coerced by employer conduct.
Compare: Constructive Discharge vs. Wrongful Termination—in wrongful termination, the employer fires the employee; in constructive discharge, the employee quits but argues they had no real choice. Both can trigger the same legal protections, but constructive discharge requires proving the employer's conduct left no reasonable alternative.
| Legal Theory | Best Examples |
|---|---|
| Common Law—Public Policy | Jury duty, workers' comp claims, refusing perjury |
| Common Law—Implied Contract | Employee handbooks, progressive discipline policies |
| Common Law—Good Faith | Firing to avoid paying commissions, benefit vesting |
| Statutory—Discrimination | Title VII, ADA, ADEA violations |
| Statutory—Whistleblower | Sarbanes-Oxley, Dodd-Frank, state whistleblower acts |
| Contractual—Express | Executive agreements, fixed-term contracts |
| Contractual—CBA | Union grievance procedures, just cause requirements |
| Equitable—Promissory Estoppel | Reliance on job offers, detrimental reliance |
An employee handbook states that workers will only be terminated "for cause" after progressive discipline. Which exception applies, and what must the employee prove to enforce it?
Compare and contrast the public policy exception with whistleblower protection statutes. When might an employee have claims under both theories?
A sales representative is fired one week before a large commission payment vests. Which common law exception might apply, and why is this claim difficult to win in most jurisdictions?
What distinguishes promissory estoppel from an implied contract claim? Identify a fact pattern where promissory estoppel would succeed but implied contract would fail.
An employee resigns after months of being assigned demeaning tasks and excluded from meetings following a discrimination complaint. What legal theory applies, and what standard must the employee meet?