Even if there is no a written contract between an employer and employee, an oral agreement exists in which the employee agrees to provide services to the employer, and the employer agrees to pay the employee for those services. This is known as at-will employment, which is the standard in a vast majority of the states. Under the at-will doctrine, either the employer or employee may, subject to certain exceptions, terminate the employment relationship at any time, for any reason, or for no reason. Courts in most states, however, have found that, under certain circumstances, statements made in offer letters, employee handbooks or manuals, and other written statements made to employees can create an implied contract that alters the at-will relationship.
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Download Now Avoiding implied employment contracts. The most important thing an employer can do to preserve the at-will employment relationship is to include a disclaimer on its employment application, in every offer letter sent to prospective employees, and in its employee handbook. The disclaimer should be placed prominently in the handbook, i.e., on the first page, and appear in large, bold type. In addition, when a new employee receives a copy of the handbook, the employee should be asked to sign an acknowledgement stating that he or she understands and agrees that nothing in the handbook is intended to or does create a contract or alters the at-will employment relationship. The signed acknowledgment should be kept in the employee's personnel file. State courts have set different standards for how and when an implied contract may be created, and employers must make sure that the disclaimer contains the language required in their state.
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