Avoiding Implied and Oral Contracts in Employment

Employers should avoid making implied and oral contracts which are usually the source of confusion, dispute, and potential lawsuits between workers and their companies.



According to corporate lawyers, these contracts limit the rights of employers in the aspect of termination. With this consideration, it is always better to have a written contract that will give employers and workers the same equal rights.



WAYS TO AVOID IMPLIED CONTRACTS



• State clearly that the employment is at-will



The employment agreement or personnel manual should clearly state that the employment is at-will, which means that employers have the right to fire workers without giving valid reason as long this is not discriminatory or a violation of the public policy. On the other hand, at-will employment also allows workers to quit any time they want.



To make this contract legally enforceable, employees should sign their names in the employment agreement.



• Don't promise of job security



One of the most common mistakes of employers is that they give promises of job securities even if they are not sure they will be able to execute this. Doing this has two disadvantages for employers: 1.) Workers will expect that they will not be terminated. 2.) Employers should have a really good reason for terminating a worker to avoid lawsuits and claims.

According to Los Angeles lawyers, employers should avoid promises of job security which are particularly common in performance reviews and job interviews.



• Retain the right to fire at will



Most employees undergo a probationary period in which employers have the right to fire them even without a good cause. However, many companies relinquish this right after their workers become permanent. While doing this is ideal in some ways (it makes workers think they are part of the company), some employers still retain their right to fire workers at will.



• State the right to fire for any reason



The employment agreement should include offenses which are the grounds for termination. However, it is better for employers to state their right to fire someone even if the cause is not included in the written contract.

(Note: Even if employers explicitly state that they have the right to fire workers for any reason, they may still face wrongful termination claims if their decision is based on discrimination or the termination has violated the public policy.

Examples of violation of public policy:



- an employer fired a worker who refused to do illegal activities such as tax evasion

- a supervisor fired an employee who reported to authorities the illegal activities of his company

- a company terminated a worker who is practicing his civil rights such as filing a lawsuit against his employer or applying for worker's benefits and medical leave



• Train all managers and supervisors



Employers should train key employees on how to deal with their subordinates. According to lawyers, managers and supervisors' comments and statements are legally attributed to their companies.



Our skilled employment attorneys provide legal assistance in drafting employment agreements. For consultation, visit our website and dial our toll free number.