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Can You Terminate an Employee for Looking for Another Job?

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Let’s face it, it’s been a great year for job seekers. The fallout from the pandemic has changed the job market. Rising minimum wage and employee demand for better work life balance =  a tight labor supply. (The talent pool has become more like a talent puddle!) Your employees are more aware than ever that they have options. So what do you do when you catch one of your employees looking for another job?

If you recently learned that your employee has one foot out the door, you may be wondering what your next step should be. (Back away from the big red button!) Before firing them, you need to check your options. 

Read our guide on whether you can terminate an employee for looking for another job. Plus, see our top alternatives to termination.

Can You Terminate an Employee for Looking for Another Job?

While it isn’t expressly prohibited by law, we wouldn’t recommend it. You might be surprised by how many of your employees are looking for other opportunities—either actively or passively—while still doing good work for your organization. 

A recent report by Joblist found that almost 75% of currently employed workers would consider leaving their company for a better role somewhere else. If you start terminating everyone who is keeping an eye out for the next opportunity, you may find yourself with a significantly smaller workforce. But don’t let that scare you! There are plenty of great ways to retain your top talent.

Legal Repercussions of Terminating an Employee Who is Looking for Another Job

Legally, you’re able to terminate an at-will employee in practically every state, except Montana (where termination after 6 months must be “for cause.”) Keep in mind certain types of employer-employee relationship don’t follow the at-will standard. A contract employee, for example, would not be at-will.

“At-will” employment refers to a rule that the employment relationship may be terminated by the employer or the employee at any time, with or without cause, without notice, for any reason (allowed by law) or no reason at all.

If you were to simply terminate an employee for looking for another job without any disciplinary actions or attempts to remedy the problem, the employee could claim they were terminated for an illegal reason. If you truly have to terminate the employee, use our our involuntary termination checklist to make sure you stay compliant.


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Our advice? Instead of terminating this employee, you should consider talking with them to determine why they are looking for work elsewhere and what might motivate them to stay. See our recommendations below on what to do if your employee is looking for a new job.

The Best Alternatives to Termination When An Employee is Actively Looking for Another Job

Make an Attempt to Retain the Employee

Your employee may be fishing for a counteroffer. If they deserve a raise or a promotion, research compensation in your industry and consider making the offer. (In this situation, communication is key!) Find out what matters most to your employee and whether you can convince them to stay. In this competitive market, flexible schedules and remote work options are the perks many professionals value the most.

Turn the Situation Into a Positive

Instead of terminating the employee, ask why they are looking for a new job. Use this opportunity to assess how you can improve your business and company culture. This information can help you to better engage your workforce and increase retention! Here are few of the most common reasons employees look for a new job:

Remember that your other employees are closely watching how you handle the situation. If you simply fire the employee looking at a new opportunity, it could affect the level of trust with your other employees. Plus, there’s always a risk that an involuntarily terminated employee could turn the situation into an avoidable lawsuit. That’s why you need a HR hero – someone who can rescue your business from a wrongful termination case before it happens.