Tech companies have been making headlines lately for laying off hundreds and even thousands of employees. Twitter was the first, cutting hundreds of staff members overnight on November 3, and Meta followed suit, announcing it would cut more than 11,000. At the end of November, DoorDash announced it would lay off 1,250.
While some workers impacted by these latest cuts could be protected by the federal WARN Act, under which those considered to be part of a mass layoff are owed a 60-day written notice and their regular pay and benefits through that time, some may not.
In fact, under the U.S.'s at-will employment system, workers have very few protections in place to both help them keep their jobs and to cushion the blow ― financially, emotionally ― should they lose them. The U.S. is one of the few countries in the world with such a system.
Here's how at-will employment works, why it's the de-facto system in America, and how other countries handle their workforce.
Loosely defined, at-will employment "means that you can be fired for any reason or no reason at all," says Najah Farley, senior staff attorney at the National Employment Law Project.
You can get fired "because the boss is having a bad day," says Arick Fudali, partner and managing attorney of civil rights firm the Bloom Firm, as an example. "Because he's in a bad mood. Because you didn't laugh at his joke." None of these would necessarily qualify as unlawful termination, unfair as they may seem.
"Likewise, you can quit for any reason," he says.
Montana is the only state in the U.S. which is not technically at-will, and employers there need to have a "good cause" for termination, according to its department of labor. In 2021, however, changes were made to Montana's Wrongful Discharge from Employment Act, giving employers more leeway in this area.
There are several exceptions under which employees can't be fired. Here are four of the critical ones:
- Discrimination: Your employer cannot terminate you for being part of a protected class. They cannot terminate you based on "race, color, religion, sex (including pregnancy, sexual orientation, or gender identity), national origin, age (40 or older), disability and genetic information (including family medical history)," according to the U.S. Equal Employment Opportunity Commission. Importantly, they also can't fire you or let you go for complaining about discrimination that wasn't directed at you.
- Sexual harassment: Your employer can't fire you or let you go for rebuffing or complaining about sexual harassment, whether it happened to you or someone else, even if that complaint turns out to be unfounded. "A boss can't give you a quid pro quo offer of sex in exchange for your job and then fire you because you refused. Your boss can't fire you because you're being standoffish about the sexual harassment. Your boss can't be flirting with you and then fire you because you didn't respond," says Fudali.
- Whistleblowing: "You can't be retaliated against for whistleblowing," says Fudali, such as reporting violations of safety protocols in the workplace.
- Union membership: Many workers who are part of a union are also an exception to the at-will employment system. "They bargain the contract and that puts them into just-cause employment," says Farley. This means an employer has to have an explicit reason for firing or letting them go.
Another component of the U.S.'s at-will employment system is that under its auspices, once an employee is terminated, their former employer does not owe them severance or any other like provisions.
"If you get to work at 9 and they fire you at 10, they're supposed to pay you for your hour," plus any additional hours worked that you put in before that, says Farley. But, for the most part, that's all they legally owe you, no matter how long you've been there or what kind of contributions you've made.
Here are several instances in which a company would owe a former employee severance:
- Under the WARN Act, those who are part of what's categorized as either a mass layoff or a plant closing would be owed a written notice of termination 60 days ahead of it and a continuation of their pay and benefits package through that time, even if they no longer have to come into their workplace.
- Members of some unions may also be entitled to a severance package, depending on what that union has negotiated with the employer.
- Some individual contracts may also stipulate severance. "If your contract says, 'if you're fired within the first six months, you get this amount of money,' you get that amount of money," says Fudali. Often higher level executives have such contracts.
Most countries in the world do not have an at-will employment system. When it comes to a lot of the countries in the OECD, for example, "there's a lot more steps that an employer would need to go through to let a worker go," say Annelies Goger, a fellow at The Brookings Institution.
In Japan, for example, the ability to terminate an employee is highly restricted, and in some cases considered to be a last resort after reducing higher ups' salaries, putting a stop to company hiring, and encouraging early retirement, according to international employment law firm L&E Global.
In New Zealand, unless in the case of serious misconduct, an employer must give an employee notice of their forthcoming termination, according to the government, which stipulates that 2-to-4 weeks' notice "is often seen as fair." The employer must pay the employee until the end of their notice period.
Why, then, is this the de-facto doctrine in the U.S.?
In part, the system is a result of "the very strong influence that businesses historically had on politics and legislation," says Ludmila Praslova, professor of psychology at Vanguard University of Southern California. It gives businesses a great deal of freedom, and they've lobbied successfully to keep it.
"I believe that a lot of the reason why we have such an emphasis on at-will employment here is because of the history of racial discrimination and slavery," says Farley. It's a centuries-long tradition of devaluing labor and laborers that impacts employer attitudes even today, she says.
Finally, the U.S.'s strong individualistic culture comes into play. "You have to take care of yourself and if you succeed, you succeed, if you don't, you don't," says Praslova of how this individualism plays out. "There isn't very much protection for people within that philosophy."