When we think about contracts, we typically imagine lengthy documents filled with legal jargon. Yet an employment relationship is technically a contractual relationship regardless of whether the terms are put into writing. The employer offers the employee a job; the employee accepts that offer; and the employer provides something of value (also known as consideration) in return for the employee’s services. Some employment relationships may continue for many years without formal written terms, while others may be negotiated to the final detail by a team of attorneys. Each relationship represents a form of contract.
So employment contracts can come in many forms, whether employment at will, employment based on an implied contract created by an offer letter or language in an employee handbook, or employment based on an express contract such as a collective bargaining agreement or individual written contract.
The most important aspect of an employment contract isn’t the form the contract takes. Rather, the most important (and most easily botched) element of the contract is ensuring that, once both parties have understood and mutually agreed upon terms, the subsequent words and actions of the parties then preserve those intentions.
In other words, employers that wish to employ on an at-will basis must avoid language or promises that can lead the employee to believe employment will continue indefinitely. On the other hand, employers that wish to expressly bind their workers to certain terms and conditions must be just as careful to ensure that the language they have chosen will hold up and protect their interests if challenged in court.