Vermont — Termination

Vermont follows the at-will employment doctrine by default, as established in Vermont Supreme Court case law rather than statute. Under this rule, either the employer or employee may terminate the employment relationship at any time for any reason, or for no reason, absent an explicit contract to the contrary.

Leading authority:

• The Vermont Supreme Court expressly recognized the at-will rule in Jones v. Keogh, 409 A.2d 581, 582–83 (Vt. 1979), stating: “a contract of permanent employment, or for an indefinite time, is employment at will and may be terminated at any time for any reason or for no reason at all.”
• The Court reaffirmed this framework in LoPresti v. Rutland Reg'l Health Services, Inc., 865 A.2d 1102, 1107 (Vt. 2004), which collects and summarizes the exceptions.

Recognized exceptions under Vermont law:

1. Public Policy Exception: Vermont recognizes a limited public policy exception: an employee may not be discharged for a reason that contravenes a clear, well-defined public policy rooted in law or regulation. See LoPresti, 865 A.2d at 1107–08; Payne v. Rozendaal, 520 A.2d 586, 588 (Vt. 1986).
2. Implied Contract Exception: An employer’s written policies, handbooks, or oral assurances may, in some cases, give rise to an implied contract limiting at-will termination, depending on the circumstances and the presence of clear disclaimers. See LoPresti, 865 A.2d at 1107.
3. Covenant of Good Faith and Fair Dealing: Vermont recognizes an implied covenant of good faith and fair dealing in every contract, but as of LoPresti, the Vermont Supreme Court has not recognized a separate wrongful discharge claim based solely on this covenant for at-will employees. The Court has allowed such contractual claims in the context of defined term employment relationships, not for at-will positions. See LoPresti, 865 A.2d at 1108.

Takeaway: Except for these clear exceptions, Vermont employment remains at-will by judicial precedent, not by statute. Employment contracts or collective bargaining agreements can supersede this default.

Sources: Jones v. Keogh, 409 A.2d 581 (Vt. 1979), LoPresti v. Rutland Reg'l Health Servs., Inc., 865 A.2d 1102 (Vt. 2004)

Vermont statute imposes paycheck timing rules for separating employees based on whether the separation was a discharge or a voluntary resignation, each clearly divided in subsection (b) of 21 V.S.A. § 342.

Statutory subsections:

• 21 V.S.A. § 342(b)(1): Voluntary resignation — employee is to be paid on the last regular pay day, or if there is no regular pay day, on the following Friday.
• 21 V.S.A. § 342(b)(2): Discharge — employee must be paid within 72 hours of discharge.
• 21 V.S.A. § 342(b)(3): If an employee is absent from the regular place of employment on the scheduled payday, payment must be made upon demand (typically invoked for ongoing employment, but controlling if pay is due at separation and the employee requests payment after missing the designated day).

The discharge rule sets a strict 72-hour deadline after a termination initiated by the employer. This deadline applies to every component considered "wages" (earned base pay plus any other compensation, such as accrued vacation, that the employer’s policy designates to be paid out at separation). Vermont doesn’t mandate vacation payout, but if an employer’s policy or contract promises accrued PTO at separation, that amount becomes a wage obligation subject to the same timing requirement under § 342.

When an employee resigns, the statute ties payout to the next regular pay day after their last day. If the employer has no established payroll calendar, the fallback deadline is the very next Friday. Example: a biweekly-paid worker who resigns on a Tuesday receives their check on the next scheduled pay date—regardless of whether that falls within the same week.

For the rare scenario where an employee misses the regular pay location and is not present on the scheduled payday, § 342(b)(3) ensures they retain the right to request immediate payment upon demand, including after separation.

Constructive discharge and ambiguous situations: The statute draws a strict contrast between discharge (employer-initiated) and resignation (employee-initiated). Vermont’s courts accept constructive discharge as a doctrine in discrimination cases, but the statute is silent on whether a constructive discharge triggers the 72-hour rule or the regular-payday rule. Without Vermont precedent directly interpreting § 342 for constructive discharge, best compliance practice is to use the more stringent timeline if it is ambiguous.

Noncompliance exposes employers to penalties under 21 V.S.A. § 345 (fines up to $5,000) and gives employees a statutory right to bring a Department of Labor complaint or civil suit under §§ 342a, 347.

• Discharge: 72 hours from termination.
• Voluntary resignation: Next regular payday; or next Friday if no payday.
• Missed payday (for any reason): Payment upon demand.

Source: 21 V.S.A. § 342(b)