Employment-At-Will

What Does It Mean When People Say North Carolina Is An Employment-At-Will State?

North Carolina is an employment-at-will state. This means that in the absence of a contractual agreement between an employer and an employee establishing a definite term of employment, the relationship is presumed to be terminable at the will of either party without regard to the quality of performance of either party. Another way to say this is that the employer and the employee can choose to end the employment without breaking the law even if the other party is doing everything right. It is often said that an at-will employee can be fired for a good reason, a bad reason, or no reason at all. However, an employer who fires an employee for an unlawful reason may be held to account in court for monetary damages and injunctive relief.

There are limited exceptions to at-will employment in North Carolina. First, parties can remove the at-will presumption by specifying a definite period of employment contractually. Written employment contracts specifying a definite period of employment are relatively rare in North Carolina. Where there is a written employment contract for a definite period, the employer and employee have a contractual right to the continuation of the employment for the specified period under the terms specified in the written agreement. If the employer or employee violate the terms of the agreement, the party harmed by the violation can sue in court to seek enforcement of the agreement or contract damages.

Second, federal and state statutes have created exceptions prohibiting employers from discharging employees based on impermissible considerations such as the employee’s age, race, sex, religion, national origin, or disability, or in retaliation for filing certain claims against the employer. For example, it is unlawful in North Carolina to retaliate against an employee for exercising rights under the NC Workers’ Compensation Act. Finally, the NC Supreme Court has recognized a public-policy exception to the employment-at-will rule. The public policy exception is narrow, and generally requires the policy to be stated in a North Carolina statute. When the actions of an employer violate state or federal law or the public policy of North Carolina, the general rule of at-will employment will not protect the employer from potential legal liability.

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