In my earlier post I said, "1. Unless you have a contract of employment [oral or written or implied, subject to many circumstances special to a situation], a public policy recognized in Iowa or a statutory protection, you are an employee "at will" and either or both you and your employer can call a halt to your employment relationship for no reason at all. As is true in most situations in the law, "the Devil is in the details". A good general discussion of employment law, including this topic, is at Workplace Fairness "
This is evidently a topic of much discussion currently [swirling around the Alberto Gonzalez situation] , as several commentators have stated that the concept of 'at will employment' is a Myth [ Ed Morrissey], which has also been critiqued by others. Mr. Morrissey's point is well taken, that there are real-life expenses associated with firing people that prevent an easy decision, but he's wrong to think that the usual person will rush right out and hire a lawyer who will descend upon the employer with demands for documents and such. The reality is that most employers are in a more powerful position and most fired persons are more needy and the first thing they usually do is try to find another job or put a meal on the table. Even if they have a good reason to suspect foul play, most people don't just immediately think of litigation.
But the cost of defending against employment litigation will frequently mean that many employers will work out severance packages or take other steps to avoid litigation, if possible. And working out some sort of peaceful separation may well be in the best interests of both parties, saving the most eggregious cases for the minefield of lawsuits.