Is Indiana an at-will state?

“The public policy exception to the at-will doctrine can be ‘generalized to the proposition that an employee who has been fired for exercising a statutory right or refusing to violate the law has a claim for wrongful discharge.’”

Before you fire someone: the step-by-step checklist

What it means for Indiana employers

Indiana courts have historically recognized two forms of employment: employment for a definite or ascertainable term, and employment at will (Orr v. Westminster Village North, 1997, as quoted in Slinger v. Federal Express, S.D. Ind. 2013). When employment is not for a defined or ascertainable term, the presumption in Indiana is strong that it is at will (Farr v. St. Francis Hospital, S.D. Ind. 2007, citing Orr). (Slinger v. Federal Express Corp., S.D. Ind. No. 1:11-cv-01482 (2013); Farr v. St. Francis Hospital & Health Centers, S.D. Ind. No. 1:06-cv-00779 (2007))

The Indiana Supreme Court has been explicit that it prefers the legislature to set the limits. In Wior v. Anchor Industries (1996) it said it is generally disinclined to adopt generalized exceptions without a clear statutory expression of a right or duty that the dismissal contravenes, and Montgomery adds that general expressions of public policy do not support new exceptions. The federal court in Farr v. St. Francis Hospital (S.D. Ind. 2007) relied on those statements to decline a request to extend the exception to a dismissal allegedly made to cover up an employer's own violation of HIPAA, because no statutory right or duty of the employee was involved. (Farr v. St. Francis Hospital & Health Centers, S.D. Ind. No. 1:06-cv-00779 (2007))

What that means in daily practice: in Indiana, the public policy question is less about fairness and more about statutes. The two verified routes both point to a specific legal right or a specific illegal act. Besides the public policy exception (both routes above), the Indiana Supreme Court recognizes two others (Orr, as summarized in Farr): adequate independent consideration given in return for permanent employment, and promissory estoppel. Outside those three exceptions and the statutes that protect employees, a dismissal decision falls under the baseline at-will rule. (Farr v. St. Francis Hospital & Health Centers, S.D. Ind. No. 1:06-cv-00779 (2007))

Indiana also has no implied duty of good faith and fair dealing running from an employer to an at-will employee. Farr quotes three Indiana appellate decisions for that point (Hamblen v. Danners, 1985; Mehling v. Dubois County Farm Bureau, 1992; NIPSCO v. Dabagia, 1999), and the Seventh Circuit affirmed the dismissal of that claim in 2009. Farr also cites Terrell v. Rowsey (Ind. Ct. App. 1995) for the point that Indiana has no negligence claim for an employer's defective performance of an employment contract. (Farr v. St. Francis Hospital & Health Centers, S.D. Ind. No. 1:06-cv-00779 (2007); Farr v. St. Francis Hospital & Health Centers, 7th Cir. No. 08-3203 (2009))

Compared with Illinois next door, where a handbook can create enforceable contract rights when the usual contract formation requirements are met (Duldulao, verified on the Illinois page), the handbook question is still open on this site for Indiana: our Indiana rule on implied contracts is not verified yet, so this page does not state what Indiana law says about it. (Ross v. May Co. (Ill. App. Ct., 1st Dist., No. 1-06-0239, 2007), quoting Duldulao v. Saint Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 490 (1987))

Exceptions and special cases

• Public policy, first route, exercising a statutorily conferred right (the Frampton decision): limited. The S.D. Ind. order in Ballantine lists a retaliation claim based on an application for unemployment benefits (M.C. Welding & Machining v. Kotwa, Ind. Ct. App. 2006) among the cases given this exception; in Montgomery the Indiana Supreme Court boiled the exception down to two situations, using a legal right a statute grants and declining to break the law. (Farr v. St. Francis Hospital & Health Centers, S.D. Ind. No. 1:06-cv-00779 (2007); Ballantine v. Amazon.com.INDC LLC, S.D. Ind. No. 1:18-cv-02546 (2019), citing Frampton v. Central Indiana Gas Co. (Ind. 1973))
• Public policy, second route, refusing to commit an illegal act with personal liability (McClanahan v. Remington Freight Lines, 517 N.E.2d 390, 1988): limited. McClanahan involved a truck driver told to haul freight he knew was over the Illinois weight limit. Slinger describes the exception as a discharge because the employee refused to act illegally. (Slinger v. Federal Express Corp., S.D. Ind. No. 1:11-cv-01482 (2013))
• Implied covenant of good faith and fair dealing: not recognized for at-will employees (Hamblen v. Danners; Farr v. St. Francis Hospital). (Farr v. St. Francis Hospital & Health Centers, S.D. Ind. No. 1:06-cv-00779 (2007))
• Adequate independent consideration and promissory estoppel: recognized. Farr (S.D. Ind. 2007) lists them, with the clear statutory right or duty exception, as the three exceptions to at-will employment that the Indiana Supreme Court currently recognizes (Orr v. Westminster Village North, 1997). This page does not yet cover how courts apply them. (Farr v. St. Francis Hospital & Health Centers, S.D. Ind. No. 1:06-cv-00779 (2007))
• Implied contract from a handbook: not verified on this site yet. We make no statement about it until it is.

Worked examples

A driver who refuses an overweight load

A Fort Wayne freight company tells a driver to take a load through a state where it exceeds the legal weight limit, and the driver refuses. That is close to the facts of McClanahan, where the Indiana Supreme Court recognized an exception for refusing an illegal act that would expose the employee personally. An employer reviewing that driver's record would check whether any action it is considering is connected to the refusal, and keep separate written records of unrelated issues. (Ballantine v. Amazon.com.INDC LLC, S.D. Ind. No. 1:18-cv-02546 (2019), citing Frampton v. Central Indiana Gas Co. (Ind. 1973); Slinger v. Federal Express Corp., S.D. Ind. No. 1:11-cv-01482 (2013))

A dismissal after an unemployment benefits application

An Evansville plant recalls an employee from a temporary layoff during which the employee applied for unemployment benefits, and the employee now has attendance problems. Indiana recognizes an exception when an employee is discharged solely for exercising a statutorily conferred right (Frampton), and the federal order in Ballantine lists a retaliation claim based on an application for unemployment benefits (M.C. Welding & Machining v. Kotwa) among its examples. The practical point for the plant is timing and documentation: the attendance policy, earlier warnings and how other employees were treated are what show the reason for any decision. (Ballantine v. Amazon.com.INDC LLC, S.D. Ind. No. 1:18-cv-02546 (2019), citing Frampton v. Central Indiana Gas Co. (Ind. 1973))

How to act on it

At-will: Indiana and neighboring states

Each state links to its rulebook. Only rules we verified are shown.

Questions about Indiana at-will rules

The verified rules behind this page (3)

• Public policy: Indiana's public policy exception is narrow: an employee fired for exercising a statutory right or for refusing to commit an illegal act for which the employee would be personally liable (McClanahan) has a wrongful discharge claim. It is one of three exceptions the Indiana Supreme Court recognizes (Orr); the other two are adequate independent consideration given in return for permanent employment, and promissory estoppel. (Farr v. St. Francis Hospital & Health Centers, No. 1:06-cv-00779-SEB-JMS (S.D. Ind. Sept. 26, 2007), citing Montgomery v. Bd. of Trustees of Purdue Univ., 849 N.E.2d 1120, 1128 (Ind. 2006); Slinger v. Federal Express Corp., No. 1:11-cv-01482-JMS-MJD (S.D. Ind. Mar. 11, 2013), citing Meyers v. Meyers, 861 N.E.2d 704, 706 (Ind. 2007), and McClanahan v. Remington Freight Lines, 517 N.E.2d 390 (Ind. 1988); verified Sep 24, 2026)
• Good faith covenant: Indiana does not recognize a duty of good faith and fair dealing owed by an employer to an at-will employee. (Farr v. St. Francis Hospital & Health Centers, No. 1:06-cv-00779-SEB-JMS (S.D. Ind. Sept. 26, 2007), quoting Hamblen v. Danners, Inc., 478 N.E.2d 926, 929 (Ind. Ct. App. 1985); Farr v. St. Francis Hospital & Health Centers, No. 08-3203 (7th Cir. June 29, 2009) (affirming dismissal of the covenant claim); verified Sep 24, 2026)
• Implied contract (Illinois, for comparison): Illinois recognizes that an employee handbook or other policy statement can create enforceable contractual rights that limit at-will employment when the traditional requirements for contract formation are met (Duldulao v. Saint Mary of Nazareth Hospital Center). (Ross v. May Co. (Ill. App. Ct., 1st Dist., No. 1-06-0239, 2007), quoting Duldulao v. Saint Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 490 (1987); Unterschuetz v. City of Chicago (Ill. App. Ct., 1st Dist., No. 1-02-2871), discussing Duldulao v. Saint Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 490 (1987); verified Sep 24, 2026)

Sources (6)

• Farr v. St. Francis Hospital & Health Centers, S.D. Ind. No. 1:06-cv-00779 (2007)
• Farr v. St. Francis Hospital & Health Centers, 7th Cir. No. 08-3203 (2009)
• Slinger v. Federal Express Corp., S.D. Ind. No. 1:11-cv-01482 (2013)
• Ballantine v. Amazon.com.INDC LLC, S.D. Ind. No. 1:18-cv-02546 (2019), citing Frampton v. Central Indiana Gas Co. (Ind. 1973)
• Ross v. May Co. (Ill. App. Ct., 1st Dist., No. 1-06-0239, 2007), quoting Duldulao v. Saint Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 490 (1987)
• Unterschuetz v. City of Chicago (Ill. App. Ct., 1st Dist., No. 1-02-2871), discussing Duldulao v. Saint Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 490 (1987)

Checked Sep 24, 2026 · How we verify every rule · Report an error

Where this goes next

StateIndiana employer rulebookAll 51 statesAt-will employment by stateNext doorIllinois at-will rulesStep by stepHow to fire an employee in your state