At-will employment refers to an employment agreement stating that employment is for an indefinite period of time and may be terminated either by employer or employee. If an employment is at-will, such an agreement would typically be expressly included in the relevant employment contract.
Even if an employment agreement contains an at-will provision, there are certain reasons as to why termination could still be wrongful. These exceptions will typically vary by state.
Public Policy Exception
The public policy exception bars an employer from terminating employees in violation of well-established public policy of the state. As an example, in many states an employee may not be terminated for filing a workers' compensation claim after an on-the-job injury.
Many states do not allow employers to terminate employees for refusal to violate the law at the employer's request. Criteria for what violates public policy in a particular state varies from state to state.
Implied Contract Exception
The implied contract exception means that an employee may have an expectation of a fixed term or even indefinite employment based on something the supervisor has done. This can take the form of employer's statements, an employer’s practice of only firing employees for cause, or an assertion in the employee handbook that specific termination procedures will be followed.
Implied Covenant of Good Faith and Fair Dealing
Some states recognize an implied covenant of good faith and fair dealing in employment relationships. Under this exception, an employer typically may not terminate an employee in bad faith or terminate an employee when the termination is motivated by malice.