This is the second part of a two-part series.  Read To Hire Or Fire, Part 1 here.


Unless there is an agreement which sets the term or length of employment, all employees are subject to at-will employment.   At-will employment gives the employer the right to hire and fire employees at-will; however, it is not an absolute right.  You must act responsibly and within the limits of the law.   When you hire, discipline, or terminate an employee, you must make your decision in a nondiscriminatory and fair manner.

There are three objective reasons for terminating an employee:  reduction in force; violation of company rules; and inability or failure to perform.  

In theory, the concept of at-will employment gives you the right to terminate an employee without reason; however, in practice, you must carefully consider and document your reasons for terminating an employee.   For example, if you are terminating an employee for poor job performance, you must be able to show that: the employee knew what was expected of him/her; you notified the employee of your concerns in a timely manner; you explained what the employee needed to do to correct the problem; and you explained to the employee that failure to correct the problem would result in disciplinary action up to and including termination.

Even in a clear case of downsizing, you must not discriminate when deciding who among your employees to let go.  You should be able to provide objective and reasonable reasons for each person that you layoff. 

Preparing a written set of office rules that each employee signs can be a big help in setting the ground rules of their employment and will dispel any misunderstandings if a dispute develops.  The office rules should clearly state that it is an at-will employment.

It is wise to consult with an attorney to fully understand your legal rights and obligations as an employer in today’s complicated workplace.