On December 27, 2023, Starbucks fired Karmen Rich. She had been a barista for years. The company claimed she violated a policy. The New York City Department of Consumer and Worker Protection investigated and found that Rich had followed every relevant policy. There was no just cause for her termination. In March 2025, the DCWP filed a lawsuit against Starbucks at the Office of Administrative Trials and Hearings, seeking civil penalties, restitution, and back pay for Rich. It was the third wrongful termination lawsuit the city had filed against the company.
“All workers deserve to be treated with dignity, respect, and fairness,” Rich said in the DCWP press release. “It’s disappointing to see a company of this size fall short in taking care of the very people who make its profits possible.”
In New York City, fast food workers cannot be fired without just cause. Rich had that protection. In 49 out of 50 states, she would not have. The termination would have been perfectly legal, unreviewable, and final, not because what Starbucks did was right, but because at-will employment means an employer does not need to be right. They just need to not be illegal.
The 150-Year-Old Doctrine Nobody Voted For
At-will employment is the default rule governing the American workplace. It means an employer can fire a worker for any reason, at any time, without warning, without explanation, and without recourse, as long as the reason is not specifically prohibited by law. The prohibited categories are narrow: race, sex, religion, disability, and retaliation for whistleblowing. Everything else is permitted. A manager can fire someone for wearing the wrong color shirt. For not laughing at a joke. For no reason at all.
The National Employment Law Project traced the doctrine’s origin to the decades following the Civil War, when conservative judges sided with railroad companies and industrialists to impose at-will employment through judicial rulings. It was never voted on. It was never passed by a legislature. It was cemented into the legal system as a product of employer power during a period in which formerly enslaved workers were entering the labor market for the first time, and employers wanted to maintain the ability to dismiss them at will. NELP’s research describes at-will employment as growing “out of the soil of slavery and servitude.”
The doctrine stuck. It became the default in all 50 states. And for the next century, it went mostly unchallenged, not because workers agreed with it, but because most of them did not know it existed. One in two American workers, 47 percent, have been unfairly or arbitrarily fired at some point in their lives. The figure rises to 50 percent for Black workers and 52 percent for Latinx workers. Most of those firings were legal. All of them were permitted by a rule that no elected body ever approved.
What Every Other Country Does Instead
The United States is the only developed economy in the world that does not require employers to provide a reason for firing a worker. Germany requires just cause after six months of employment, a notice period of up to seven months depending on tenure, and mandatory consultation with a works council. France requires both a valid reason and a formal process. Japan’s Labor Contract Act prohibits dismissals that “lack objectively reasonable grounds.” The United Kingdom, Canada, Australia, and every member of the European Union impose some version of the same principle. If you fire someone, you need a reason, and the reason has to be legitimate.
The International Labour Organization’s Convention 158, adopted in 1982, establishes the global standard that employment should not be terminated unless there is a valid reason. Over 40 countries have ratified it. The United States has not.
This is not a progressive policy experiment. It is the global baseline. The American workplace operates below it, not by accident, but by design. The same structural forces that have kept tipped workers earning $2.13 an hour since 1991 protect at-will employment for the same reason: the doctrine shifts power toward employers and keeps it there.
Montana Said No
In 1987, Montana passed the Wrongful Discharge from Employment Act. It remains, 38 years later, the only state in the country that limits at-will employment by statute for private employers. After a probationary period, typically six months, a Montana employer cannot fire a worker without good cause. Good cause is defined as “reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer’s operation, or other legitimate business reason.”
The law did not emerge from a workers’ uprising. It emerged from a compromise. The Niskanen Center’s 2022 analysis of the law’s forgotten origins found that it was employers, not labor groups, who pushed for the legislation. Montana courts had begun issuing large wrongful discharge verdicts against companies, and employers wanted tort reform that would cap damages. Workers sacrificed the right to sue for large awards. Employers sacrificed the right to fire at will. Both sides gave something up. The result was a system that provided baseline protections while limiting legal uncertainty.
The predicted collapse did not happen. Montana’s unemployment rate has been at or below 3.4 percent for more than four consecutive years, consistently ranking in the top ten lowest in the nation. In January 2023, it hit an all-time low of 2.5 percent. As of November 2025, Montana’s rate was 3.3 percent, 1.3 percentage points below the national average of 4.6 percent. The labor force participation rate has grown. Total employment has set multiple records.
The Niskanen analysis noted that Montana’s law actually reduced litigation costs for employers by replacing unpredictable jury awards with a structured system. When employers know the rules, they follow them. When workers know the rules, they spend less time in court and more time working.
The Cities That Are Not Waiting
New York City’s Fair Workweek Law, the statute that protected Karmen Rich, is one of a growing number of local just cause ordinances passed in the absence of state or federal action. The law applies to fast food workers at chains with 30 or more locations nationally, requiring employers to provide a legitimate reason for termination after a probationary period.
Philadelphia extended just cause protections to parking lot attendants. The city found that workers in the industry were being fired and replaced with lower-wage workers on a rotating basis, a practice that is perfectly legal under at-will employment and functionally indistinguishable from wage theft. The just cause ordinance stopped it.
The New York City Comptroller’s Office published a report examining the impact of the city’s just cause law since its implementation and found that the fast food sector added jobs, not lost them. Restaurants did not close. Employers adapted. The feared hiring freeze that opponents predicted did not materialize.
These local efforts matter, but they cover narrow industries in individual cities. The same workplace surveillance architecture that monitors whether an employee spent eight minutes in the bathroom operates under the legal cover of at-will employment because an employer who can fire you for any reason does not need the algorithm’s report to justify the decision. The algorithm simply automates a power the employer already had.
Why Employers Defend At-Will
The strongest argument for at-will employment is flexibility.
In a fast-moving economy, employers need the ability to scale workforces quickly. A startup that hires aggressively and discovers it overhired needs to course-correct without navigating a legal process for every termination. A seasonal business that staffs up in summer and scales down in fall needs a labor model that accommodates fluctuation. Just cause protections, the argument goes, introduce friction into the labor market, making employers slower to hire because they are afraid of being unable to fire.
Early academic research supported parts of this. A study cited in the Niskanen analysis found that states whose courts adopted implied contract exceptions to at-will employment in the 1980s and 1990s saw a decline of 0.8 to 1.7 percent in aggregate state employment. Employers, uncertain about the legal landscape, became cautious about both hiring and firing.
That argument has a real foundation. It also has a boundary. The boundary is Montana, where a clear, statutory framework replaced the uncertainty of judicial rulings, and employment did not decline. The problem was never just the cause itself. The problem was unpredictability. Montana’s law solved that by defining the rules in advance, and the labor market responded by growing.
The flexibility argument also does not address what at-will employment is actually used for in practice. NELP’s data shows that 47 percent of workers have been fired unfairly. That is not flexibility. That is power exercised without accountability, and the people absorbing the consequences are disproportionately those who can least afford it.
What At-Will Employment Actually Costs
A worker who can be fired for any reason is a worker who cannot safely report unsafe conditions, cannot push back against wage theft, cannot organize, and cannot complain. The threat of termination does not need to be stated. It is structural. It exists in the background of every workplace interaction, and it shapes behavior in ways that never show up in employment statistics.
The same economic fragility that is building across American household budgets is reinforced by a system in which the loss of a job can come without warning, without explanation, and without recourse. A worker who loses a job in a just cause state knows why. A worker who loses a job in an at-will state may never find out, and has no legal standing to ask.
The cost is not only personal. Companies that fire workers arbitrarily pay in turnover, retraining, institutional knowledge loss, and morale erosion among remaining staff. The system that was designed to give employers maximum flexibility often gives them maximum instability instead. A workforce that does not trust the institution it works for, does not invest in long-term performance, and does not stay.
What Karmen Rich Was Owed
Starbucks said Karmen Rich did not follow a policy. The city of New York investigated and found that she did. In 49 states, that investigation would never have happened. The firing would have stood unchallenged, not because Starbucks was right, but because no law required them to be.
At-will employment is not a market principle. It is a legal doctrine, imposed by courts in the decades after the Civil War, never ratified by any legislature, and maintained for 150 years because it serves the interests of the people with the power to change it. Every other developed economy on earth has moved past it. Montana moved past it in 1987, and the economy kept growing.
Karmen Rich got a lawsuit. Forty-seven percent of American workers who have been fired unfairly got nothing because the law that governs their employment was not built to protect them. It was built to make firing them easy. And in 49 states, it still does.
