At will employment[1] gives you a lot of freedom when it comes to hiring and firing, but, there are some restrictions[2]. For example, you can't fire all the women in your organization just because you don't want any women working for you.

In practice, it's usually not difficult to come up with a legitimate reason to fire someone. For example, there is a whole industry of computer forensics consults who for a relatively small fee will "probe" (search the target's work computer and network logs for things that shouldn't be there) an employee to come up with a legitimate reason for firing them.

[1] http://en.wikipedia.org/wiki/At-will_employment

[2] http://en.wikipedia.org/wiki/Protected_class