A client recently asked me this question: “I have read that North Carolina is a ‘right to work state,’ and that North Carolina is an ‘employment at will state.’ – what do those terms mean for employees and employers?
That is a good question, and I am happy to shed some light on it. Yes, North Carolina employment law includes rules known as “right to work” and “employment at will.” However, they address different parts of the employer-employee relationship, so they are a bit like apples and oranges.
When we say that North Carolina is a “right to work state,” we mean that a North Carolina employee cannot be required to join a union as a condition of employment. An employer who has a factory in NC might recognize a union, and NC employees may choose to join the union, but they cannot be required to do so. In that instance, the NC employee can look at the benefits the union offers and at dues required for union membership, and choose to join or not. In states without right to work laws, some (but not all) employers will have what is called a “closed shop,” meaning that only union members are hired to work there, so all employees must join the union. The “right to work” law means there can be no “closed shops” in North Carolina. Historically, North Carolina has not been friendly to unions. Unions do not like the “right to work” law since it means unions in North Carolina employers are less powerful and less well-funded than if all employees could be required to join.
“Employment at will” has nothing to do with unions. Instead, it is a rule about when either the employer or they employee can end the employment relationship. The rule says that the employer can fire an employee without notice for any reason or no reason, as long as it isn’t an illegal reason. Illegal reasons include discrimination based on race, ethnicity, gender, age, disability, or military/veteran status, as set out in federal and state laws. Some local ordinances create additional protected classes, like sexual orientation. The flip side of the coin is that employees can quit without notice for any reason or no reason. An employer may create incentives for employees to give notice, like an employee handbook rule that employees get paid for unused vacation if they give a certain amount of notice before leaving. Those kinds of incentives are lawful, but they do not force an employee to give a notice period. Employees are usually more concerned about losing a job without notice than in being able to quit without notice, so employees usually think of “employment at will” as being a rule that benefits employers more than employees. If an employee is fired without cause, he or she can usually receive unemployment compensation from the Employment Security Commission of North Carolina. Unemployment payments are sent from the state government (not from the former employer), but employers who have claims will usually end up paying more to the state in unemployment taxes as a result.
Kim K. Steffan is an attorney with Steffan & Associates, P.C. in Hillsborough, NC. She can be reached at 919-732-7300 or firstname.lastname@example.org.
This article was last updated in January 2020.