Setting aside morals and ethics for a moment, intent (and malice) is a key component of crimes. Unfortunately it's easier to show in some cases than others. It's also worth noting that the at-will contract goes both ways in this case. Unfortunately there is an insurmountable power imbalance in this situation.

I was about to say I'm glad I was never in this situation, but I just remembered a time where I switched from an employee to a contractor and stopped getting paid.