A legal treatise writer invented a rule, cited cases that did not support it, and courts adopted it anyway.
In 1877, Horace C. Wood published A Treatise on the Law of Master and Servant, declaring that American law recognized an "inflexible" rule: any hiring of indefinite duration was presumed to be terminable at will by either party.1 Wood cited four cases as authority. Legal scholars have since established that none of them actually supported his claim.2
Before Wood's treatise, American employment law followed the English common law tradition. An indefinite hiring was generally presumed to be for one year, and dismissal required notice.3 Wood replaced this with the opposite presumption, and courts began adopting his version within a decade.
The New York Court of Appeals gave the rule its most influential endorsement in Martin v. New York Life Insurance Company in 1895, holding that an employee paid an annual salary of $10,000 could be dismissed immediately without cause.4 By 1930, the doctrine was embedded in American law across nearly every state.
The United States remains the only major industrialized nation where at-will employment is the default.5 Most Western democracies require employers to demonstrate just cause for termination. Montana is the only U.S. state that has legislatively departed from the rule, requiring just cause after a probationary period.
Statutory exceptions have narrowed the doctrine since the 1960s. The Civil Rights Act of 1964 prohibited dismissal based on race, religion, sex, or national origin. The Age Discrimination in Employment Act of 1967 extended protections to workers over forty. The Americans with Disabilities Act of 1990 added disability to the list of prohibited grounds.6 Anti-Discrimination Law created categories of workers who could not legally be fired at will.
The three largest classes of American workers exempt from at-will employment are federal employees, state employees, and union members covered by collective bargaining agreements.7