At-will employment and Section 7

Where at-will employment has limits

In most states, employees can resign at any time, and employers can generally end employment for a lawful reason. Federal and state protections, employment contracts, and state-law exceptions can affect whether a termination is lawful. Workplace policies must also account for employees' rights to discuss pay and working conditions.

State law governs at-will employment and determines which exceptions apply. Federal labor law separately protects covered employees who act together about workplace concerns.

1. Statutory protections. Title VII, the ADA, the ADEA, the FMLA, and the NLRA can protect employees against discrimination, retaliation, and interference with protected rights.
2. State-law exceptions. Depending on the state, court-recognized exceptions may involve public policy, implied contracts, or good faith.
3. Employment agreements and handbook language. Contracts, handbook statements, and manager assurances can affect what an employer has promised.
4. Montana. After probation, Montana's Wrongful Discharge from Employment Act generally requires good cause for discharge.

Three state-law exceptions to at-will employment

At-will employment is the baseline in 49 states. Courts recognize three main exceptions to it: public policy, implied contract, and good faith and fair dealing. Which exceptions apply depends on the state.

Public policy Most states

These exceptions can protect employees who report violations, refuse unlawful instructions, file workers' compensation claims, serve on juries, or exercise other legal rights. Protections vary by state.

Implied contract Most states

Handbook language, discipline practices, and manager promises can sometimes create an implied employment contract. Use consistent language in handbooks, employment agreements, and manager communications.

Good faith and fair dealing A minority of states

A smaller group of states recognizes a good-faith exception. One example is terminating an employee to avoid paying compensation that is about to vest. Each state applies its own legal test.

A 2001 Bureau of Labor Statistics review counted public-policy exceptions in 43 states, implied-contract exceptions in 38, and the good-faith covenant in 11. These are historical counts. Public-policy and implied-contract exceptions remain widespread, while fewer states recognize the good-faith covenant. Before a termination decision, review the applicable state law, the reason for termination, and the supporting records. Even in an at-will state, a recognized exception may affect whether the decision is lawful.

Montana's good-cause requirement

Under Montana's Wrongful Discharge from Employment Act, employers generally need good cause to discharge an employee who has completed probation. Good cause can include performance issues, disruption of operations, material or repeated policy violations, and other legitimate business reasons. Montana repealed its former at-will statute in 2001.

Montana's 12-month default probation

Montana's 2021 amendment changed the default probationary period from six months to twelve months. An employer may establish its own probationary period through written policy and may extend it, up to a total of 18 months. During probation, employment generally follows at-will rules, subject to other legal protections. The good-cause requirement generally applies after probation.

Montana's requirements can also apply when an employee works in Montana for an employer based in another state. Review the requirements for employees who primarily work in Montana, including employment agreements that name another state's law. Employees in Montana generally remain free to resign at any time.

Section 7 rights at union and nonunion workplaces

The National Labor Relations Act protects covered private-sector employees who act together about pay, hours, and working conditions. Section 7 protects these activities. Section 8(a)(1) prohibits employers from interfering with those rights.

Pay discussions are a common example of protected activity. Covered employees generally may discuss wages with coworkers. Confidentiality, social media, and conduct policies should preserve those rights.

1. Discussing pay and working conditions. Covered employees may compare wages, hours, and workplace experiences.
2. Raising shared concerns. Employees may act together on workplace issues. An individual may also act on behalf of coworkers in certain circumstances.
3. Discussing work online. Some online conversations about shared working conditions qualify as protected activity.
4. Deciding whether to participate. Employees also have rights concerning participation in concerted or union activity.

The NLRA excludes certain groups, including statutory supervisors, independent contractors, agricultural and domestic workers, and public-sector employees. Railroad and airline employees are covered by a different federal labor statute. Check which employees are covered when reviewing policies or employment decisions.

How the NLRB evaluates workplace rules

The NLRB used the Boeing framework beginning in 2017. In 2023, Stericycle replaced it with a different standard for evaluating workplace rules.

The Stericycle standard Stericycle, 2023

Under Stericycle, a workplace rule that appears neutral can be presumed unlawful if it reasonably tends to discourage employees from exercising Section 7 rights. The Board considers how an employee who depends on the employer for work would reasonably read the rule. An employer can rebut that presumption by showing a legitimate and substantial business need that a narrower rule would not adequately address. Stericycle replaced the Boeing framework.

What could change at the NLRB Possible reconsideration

The Board lacked a quorum for most of 2025 and regained it in January 2026 with a new majority. That majority may revisit Stericycle. As of this review, Stericycle has not been overruled and remains the operative test.

Reconsidering Stericycle requires an appropriate case before the Board. The General Counsel has signaled a change in how work-rule charges will be handled and decides which cases to pursue. That guidance can affect enforcement priorities, while Board decisions establish precedent. Until the Board acts, regional offices and administrative law judges continue to apply Stericycle.

Section 7 continues to protect covered employees who act together about pay and working conditions, regardless of changes in Board precedent. Write workplace rules narrowly around specific business needs, such as protecting trade secrets or preventing harassment. Each rule should describe the conduct it covers and the business reason behind it. Include a short savings statement clarifying that the policies preserve employees' rights under the National Labor Relations Act. Under Stericycle, that statement can help clarify those rights, but it does not cure an otherwise overbroad rule.

Four areas to review before a decision

• Pay discussions. Write confidentiality policies that preserve covered employees' rights to discuss wages and working conditions. State pay-transparency protections may also apply.
• Handbook language about job security. Review at-will statements, discipline procedures, acknowledgments, and promises about continued employment.
• Conduct, confidentiality, and social media. Focus policies on specific concerns, including harassment and trade-secret disclosure, while preserving protected workplace discussions.
• Termination timing and documentation. Document the business reason, review any protected activity, and compare how similar situations were handled.