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At-Will Company : Meaning & Definition

What is an At-Will Company?

A company, which practices at-will employment arrangement with its employee while recruiting them, is called as an "At-Will Company".

What is an At-Will Employment?

Under the at-will-employment doctrine, the employment relationship between the employer and employee is at-will, which simply means both the employer and employee are free to terminate their arrangement at any point of time with or without furnishing any reason of termination of employment. 

These kind of at-will employment contract / arrangement practice is popular in the United States of America (USA), the rest of the countries mostly have strict conditions for termination of employment and do not generally entertain the at-will employment. Generally, the employment relationship in other countries, is terminated either in case of breach of employment contract or on the basis of sufficient cause given along with serving of notice period or by paying consideration for the notice period.


With the passing of time, years after years, there have been introduced some of the exceptions to the at-will employment doctrine. There are mainly 3 exceptions, which are:

1. Public Policy Exemption
2. Implied Contract Exemption
3. Implied Covenant of Good Faith and Fair Dealing

Public Policy Exemption : Termination of employment in breach of any of the public policy of the respective state is not to be entertained and will be bad in the eye of law. E.g. a workman fired after getting injured during service.

Implied Contract Exemption : If the handbook for employee contains the condition that the termination of employment can only be done after showcasing justified cause for it, then it is to be obeyed even if the employment contract is on at-will basis.

Implied Covenant of Good Faith and Fair Dealing : In case the handbook for employee does not contain the condition that the termination of employment can be done after showcasing justified cause for it, still the employer has to give justified cause for termination of employment (even if the employment contract is on at-will basis).
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