Most states follow the employment-at-will doctrine, and employment for an indefinite term may be terminated at will and without cause. Absent a specific contract term to the contrary, this doctrine allows an employee to quit or be terminated without liability on the part of the employer or the employee, with or without cause.

A discharged employee who asserts that the parties have contractually agreed to limit the employer’s right to terminate the employee at will has the burden of proving an express agreement or written representation to that effect. To rebut the presumption of employment at will, an employment contract must directly limit—in a meaningful and special way—the employer’s right to terminate the employee without cause.

In an employment-at-will situation, an employee policy handbook or manual does not, by itself, constitute a binding contract for the benefits and policies stated unless the manual uses language clearly indicating an intent to do so. In those cases holding that personnel manuals may create contractual rights, there is either language in the manuals expressing contractual intent, or the manuals were complemented by oral agreements making the policy provisions binding.

Thus, to prove a claim for wrongful discharge in breach of an employment agreement, a plaintiff must prove (1) the plaintiff had an enforceable employment agreement that directly limited—in a meaningful and special way—the employer’s right to terminate the employee without cause; (2) the plaintiff performed, tendered performance, or was excused from performing the contractual obligations; (3) the defendant breached the contract by wrongfully discharging the plaintiff from employment; and (4) the defendant’s breach of the employment contract caused the plaintiff damage.

The employment at will doctrine does not permit an employer to discriminate against an employee in violation of state or federal law, including Title VII of the Civil Rights Act of 1964 (42 U.S.C. §2000e); the Age Discrimination in Employment Act of 1967 (ADEA) (29 U.S.C. §621); and the Americans with Disabilities Act of 1990 (ADA) (42 U.S.C. §12101).

In Arizona, as in most states, the employment-at-will doctrine is the default rule, meaning that either the employer or the employee can terminate the employment relationship at any time, with or without cause, unless there is a specific contract that states otherwise. For an employee to challenge a termination as wrongful under Arizona law, they must demonstrate that there was an enforceable employment agreement that significantly restricted the employer's right to terminate without cause. This agreement could be an express contract or a written representation, such as certain language in an employee handbook, coupled with oral agreements, that creates a contractual obligation. To establish a wrongful discharge claim, the employee must prove the existence of a limiting employment agreement, their adherence to the contract's terms, the employer's breach of contract by wrongful termination, and that this breach caused damages. However, the at-will employment doctrine does not override legal protections against discrimination. Employers cannot terminate employees for reasons that would violate state or federal anti-discrimination laws, such as Title VII of the Civil Rights Act, the ADEA, or the ADA.