What Are the Disadvantages of At-Will Employment for an Employee?

At-will employment can lead to employee terminations with or without cause.
i Jupiterimages/BananaStock/Getty Images

Employers that adopt an at-will employment policy are legally allowed to terminate an employee for any reason that is not discriminatory or illegal. The disadvantages of at-will employment for an employee include lack of job security, increased stress over finances, and workplace conflict with co-workers. Employees are subject to at-will employment in all states but Montana, where employers must show good cause for terminating an employee. Thus, at-will employment is a concept that all employees should understand.

Job Security

    Job security can be defined as the feeling of an employee that he or she belongs in the company, and that she or he plays an important role in the success of the organization. According to the U.S. Bureau of Labor Statistics, layoff measures in 2012 were down from 2011, which shows more stability in the economy. However, employees under at-will employment are still cautious about feeling a sense of job security, because their employment can be terminated at any time with or without cause. No job security is one disadvantage of at-will employment, because no employee is safe from layoffs or termination, thus creating a culture of fear at times within a company that is struggling financially.

Increased Financial Stress

    For employees who have financial obligations at home, employment at-will is a frightening prospect. Having no guarantee of continued employment from day to day, employees can become tense, worried, and less productive. According to the National Conference of State Legislatures, "In its unadulterated form, the U.S. at-will rule leaves employees vulnerable to arbitrary and sudden dismissal, a limited or on-call work schedule depending on the employer's needs, and unannounced cuts in pay and benefits." These unannounced cuts in pay and benefits can increase the financial stress for employees still working for the company, or for former employees with no recourse against the employer's decision to terminate.

Conflict with Co-Workers

    As is true with increased tension in any environment, stress that is brought on the employee by the threat of termination from the company, can also affect the relationship and cooperation between co-workers. This is especially true in a work environment that encourages competition, such as a sales company. Here, employees are pitted against each other, and each individual's success gives them more feelings of security in the company because they feel validated in their importance within the organization. Competition and conflict between co-workers can increase due to the tensions fostered by at-will employment.

Termination of Employment

    Under the at-will employment clause, employers can terminate an employee for any reason with or without cause. The exception is against illegal activities or discrimination. An organization cannot terminate an employee under at-will employment based on an employee's refusal to commit an illegal act such as testifying false information at a trial. Employers also cannot terminate based on discriminatory reasons, such as any decision based on race, color, creed, national origin, sex, age, or disability. Other than these exceptions, employees are at a huge disadvantage in an at-will employment environment, because they are not guaranteed any job security, financial guarantees, or a cooperative work environment.

the nest