The vast majority of U.S. businesses employ workers on an "at-will" basis. The most significant exception to this general rule? Independent schools.

At-will employment means that the employee is not employed for a fixed term. Most states permit this arrangement, under the theory that society benefits when employers and employees retain the flexibility of ending the relationship for any reason. Mutuality exists: the employee can leave for any reason, with or without notice, and the employer can terminate the worker any time for any reason (as long as the reason is not itself prohibited by law, as in the case of illegal discrimination or retaliation). Except in limited cases (usually involving highly paid executives or professional athletes), few employers today offer individual employment contracts to their employees.

Theory Versus Reality

To contract or not to contract? That may be the question, but it's one that many private and public elementary and secondary schools answer affirmatively without giving much thought. Most schools who rely on teacher contracts have done so as far back as school administrators can remember. For these schools, past practice and the unique circumstances presented by the academic school year combine to support the use of teacher contracts.

The thinking is that teacher contracts provide mutual reassurance regarding staffing in a given school year – teachers are comforted knowing that they will not be faced with the difficult task of securing employment mid-term should the school decide to let them go, while the school avoids the risk of faculty turnover during the school year. All in all, these are reasonable bases for utilizing teacher contracts.

But does a one-year employment agreement for faculty really provide teachers and schools the protection they think it does? Perhaps "yes" from a purely legal perspective, but less so as a practical matter.