Signing a job application form that your employment is "at will" and "the Company may terminate my employment at any time for any reason" is not exactly binding.
The notion that American workers are employed "at will"--meaning you can be fired if your manager doesn't like ______---took root in the laissez-faire atmosphere of the late 19th century, and as an offical matter is still the law of the land in every state, save Montana.
For most American workers, their status as at-will employees has been transformed by a succession of laws growing out of the civil rights movement in the 1960s that bar employers from making decisions based on such things as race, religion, sex, age, and national origin. That doesn't mean such people are immune from firing. But it does mean a company will have to show a legitimate, nondiscriminatory business reason for the termination, should the matter ever land in court.
The fear of firing is particularly acute in the Human Resource (HR) and legal departments. They don't directly suffer when an underperformer lingers in the corporate hierarchy, but they may endure unpleasant indirect consequences if that person files a lawsuit. But it's often the supervisors themselves who bear much of the blame when HR says someone can't be shown the door. That's because most fail to give the kind of regular and candid evaluations that will allow a company to prove poor performance if a fired employee hauls them into court.
It has never been easier for U.S. workers to go to court and allege that they've been sacked unfairly. Over the past 40 years federal, state, and local lawmakers have steadily expanded the categories of workers who enjoy special legal protection--a sprawling group that now includes women, minorities, gays, whistleblowers, the disabled, people over 40, employees who have filed workers' compensation claims, and workers who have called away for jury duty or military service, among others. Factor in white men who believe that they are bias victims--so-called reverse-discrimination lawsuits--and "it's difficult to find someone who doesn't have some capacity to claim protected status," observes Lisa H. Cassilly, an employment defense attorney at Alston & Bird in Atlanta, GA.
These workers wield a potent weapon: They can force companies to prove in court that there was a legitimate business reason for their termination. And once a case is in court, it's expensive. A company can easily spend $100,000 to get a meritless lawsuit tossed out before trial. And if a case goes to a jury, the fees skyrocket to $300,000 and often much higher.
The result: Many companies today are gripped by a fear of firing.
Source: BusinessWeek, April 23, 2007