When you're running a small business, hiring the right team is one of the most important decisions you'll make. But equally important is understanding the laws that govern those employment relationships—including the principle of at-will employment. Vermont, like most states, follows the at-will employment doctrine—but that doesn’t mean employers can fire employees for just any reason. In this article, we break down what at-will employment means in Vermont, its legal limits, and how small business owners can protect themselves and their employees through clear policies and smart practices. What Does “At-Will Employment” Mean? At its core, at-will employment means that either the employer or the employee can terminate the employment relationship at any time, for any reason—or for no reason at all—as long as the reason is not illegal. In Vermont, this principle applies by default unless there is a contract (written or implied) stating otherwise. So unless you’ve signed an agreement specifying terms for termination, the employment is presumed to be at-will. Legal Limits on At-Will Employment While at-will employment gives employers a fair amount of flexibility, it is not unlimited. There are important exceptions and protections that every Vermont business owner must understand: Discrimination Laws  Employers may not fire employees on the basis of protected characteristics such as: Race, color, or national origin Sex, gender identity, or sexual orientation Age (40 and over) Disability Religion Pregnancy Marital status These protections come from both federal laws (like Title VII of the Civil Rights Act and the ADA) and state laws under the Vermont Fair Employment Practices Act (VFEPA). Vermont law also offers broader protections than federal law in some areas. Retaliation and Whistleblowing An employee cannot be fired for: Reporting illegal activity or safety violations Filing a workers’ compensation claim Taking protected medical or family leave Complaining about harassment or discrimination Participating in a workplace investigation These are considered forms of retaliation, and terminating someone for these reasons—even in an at-will setting—could expose your business to liability. Breach of Contract Even if you didn’t intend to create an employment contract, certain policies, offer letters, or handbooks may create implied contractual obligations. For example, promising “job security” or suggesting that employees can only be fired “for cause” might override the at-will presumption. Best Practices for Vermont Employers To make sure you’re staying on solid legal ground while managing your team, consider the following best practices: Use Clear, Written Offer Letters: When hiring employees, include a statement in the offer letter that the position is “at-will” and that either party can end the relationship at any time, with or without cause or notice. Draft a Thoughtful Employee Handbook: A good handbook should outline key policies while preserving your rights as an employer. Include an at-will disclaimer and reserve the right to revise policies at any time. Train Your Managers: Many employment claims stem from inconsistent or poorly communicated decisions. Make sure supervisors understand what at-will employment does—and doesn’t—mean, and that they apply policies fairly. Document Performance Issues: Even in an at-will state, it’s wise to maintain records of warnings, performance reviews, or disciplinary actions to show a legitimate, non-discriminatory basis for termination decisions. Consult Legal Counsel Before Termination: Some situations are straightforward—but others are more complex. If you're planning to terminate an employee who recently complained, took medical leave, or belongs to a protected class, it’s best to speak with an attorney before proceeding. Vermont-Specific Considerations Vermont has a strong culture of employee rights and progressive labor laws. In addition to broader anti-discrimination protections, Vermont offers laws covering: Earned sick leave Parental and family leave Recreational marijuana use (with limits on workplace impact) Ban-the-box legislation, limiting when you can ask about criminal history Keeping up with these evolving laws is critical for small businesses looking to minimize risk and maintain a positive workplace culture. Need Guidance on Employment Practices? At Deppman Law PLC, we understand the challenges Vermont small businesses face when it comes to hiring, managing, and—when necessary—terminating employees. Our attorneys can help you manage at-will employment laws, draft legally sound policies, and avoid costly missteps. Contact Deppman Law today to schedule a consultation and learn how we can support your business every step of the way.