It differs by state in the U.S. (business law being left to the states, by and large). California is an "at-will" state, where you can be terminated by a firm with no notice, for no reason. However, California also has strong unemployment insurance regulations, a healthy litigation industry, and corporate laws that tend to shift more liability to employers than employees. I was able to tell an employee I fired that his performance was not up-to-par, but I had pretty substantial written documentation prepared in advance. It is certainly the case in California that you don't give recommendations to ex-employees nor provide unsuccessful job candidates with detailed feedback.

Some other states are more employer friendly, and others are less.