In most common law jurisdictions of the United States, contracts of employment without a definite term of service (for example, those employment contracts that are not in writing or part of a collective bargaining agreement) are held to be "at will" which means that the employer may dismiss the employee at any time for any reason. This is in contrast to most other common law jurisdictions (for example, Canada and England) where employment for an indefinite term can only be terminated on "reasonable notice " or for "cause". As such, in many cases, an American employee can be fired immediately at any time for any reason.

However, since this doctrine was developed in the late 18th century, several developments have occurred in American law, both at the state and federal level, which restricted the rights of employers to terminate at will. For example, courts have generally limited the rights of employers to terminate for bad faith reasons, such as employees reporting their employer's misconduct to appropriate authorities. Anti-discrimination laws also have restricted the rights of employers to fire persons from identifiable groups, such as women or African-Americans, or persons who are disabled, or pregnant women.

Moreover, although the doctrine of at-will employment has a lengthy history of precedent, recent research has shown that the original cases that held that at-will employment was allowable were based on an article that misstated previous cases on the subject. Although prior to the late 19th century case law on the subject is scarce, it appears what cases were decided followed the English practice of requiring reasonable notice.

Public policy issues

The doctrine is frequently supported by reference to anti-regulatory policy favoring the preference of business to be free from countermanding, particularly by judges or other legal bodies, when it terminates an employee. Exceptions to the doctrine have arisen because of the perception that society benefits from broad job security that comes only from requiring a bona fide reason for termination such as poor performance, misconduct, lack of work or lack of funds. Courts have cited the perception that termination of a long term employee for no reason is "harsh." Most union contracts, for example, require "for cause" termination, reflecting the value union members place on job security and to prevent intimidation against workers who choose to bargain collectively with their employers.