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American employment law

The employment relationship in the United States is subject to markedly less regulation than in other countries. With the exception of some protections on wages and hours and a prohibition on discrimination, the parties to an employment relationship in the United States are generally free to negotiate and set the terms and conditions of their relationship. Moreover, the default position is that private-sector employment relationships are at-will: either the employer or the employee may terminate the employment relationship at any time, for any (non-discriminatory or non-retaliatory) reason with or without notice.


Key Points

  • The laws governing employment relationships in the U.S. come from federal, state and local statutes, agency regulations, and case law.
  • Under United States law, there are no minimum requirements for an employment contract.
  • Except in certain mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. and state law do not impose a formal “notice period” to terminate an individual employment relationship.
  • Employees employed on an “at-will” basis may be terminated, with or without cause or grounds, provided it is not for an illegal reason, notably discrimination on grounds of a category protected by law, retaliation for assertion of employee rights, or protected “whistleblowing” activity (reporting certain employer activity where the employee reasonably believes that the information he or she provided relates to potential violations of specific laws).
  • Under U.S. labour law, if a majority of the employees in the bargaining unit who cast their vote decide in favor of union representation, the union obtains the right of “exclusive” representation of all the employees in the bargaining unit (not only the employees who voted in favor of the union).

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