Implied Contract in Employment Law

An implied contract in the employment setting is one that is neither in writing nor verbal between employer and employee, but rather is determined to exist based on statements and/or actions by the employer that leads a reasonable employee to think that they cannot be fired "at-will."

With an at-will employment in place as an implied contract, the employee may terminate his or her association for any or no reason. It is generally acceptable to give a two-week notice, but this is a courtesy and may provide a recommendation for the next job.

The employer must obey the Americans with Disabilities Act, the Civil Rights Act and remain in line with the Equal Employment Opportunity Commission. Any violation of the acts and protected classifications could lead to a lawsuit against the company for discrimination, harassment or wrongful termination. It is generally essential to hire a lawyer for these matters to proceed in the courtroom or through a settlement.

What Is the Implied Contract?

An Implied contract usually occurs through a written presumption of employment or through an oral agreement of hiring from an employer or representative of the company. These matters generally cement through an oral contract that becomes a written contract of employment or through an employee handbook. Some employees sign employment paperwork through the initial training period or with policies and written assurances that the employer will provide at some point in the first few weeks or months of work. The implied contract then creates the working relationship between the individual and the company that may progress to promotion, changing positions and raises with continued wages.

Suggestions and Exceptions to Implied Contracts

The employment between worker and company usually has no true contract other than an implied agreement through various pieces of documentation. However, because the contract is not implicit but implied, numerous suggestions are possible to change the circumstances. These could affect job security, alter procedures and even cause adverse conditions to the employment agreement. The suggestions also may progress into an employment contract as an implied agreement. This could prevent termination when the employer suggests a length of time for the job. Then, the individual may have a legal claim if wrongful termination happens at some point later.

Courts in the United States find that the employee handbooks and various papers signed by the employee constitute an implied contract between the worker and employer. Without a waiver, the guidelines and policies that the company enacts do not create contractual rights. The exemptions to standard at will termination happen when the provisions in these documents imply that the employee will only face discipline or termination for just cause or with only specific circumstances. Termination in any other situation may remain open for legal recourse. These provisions provide the employee with greater job security and difficulty for the employer in firing the person.

At-Will Employment Complications

When the implied contract is part of employment with workers, the at-will stipulation of the state laws for employment does not always hold true. The complications arise when the employer wants to fire so many employees or someone with a specific implied contract. While the handbook, documents signed and even the policy manuals may not say that a contract exists, the conditions and guidelines may imply a contractual obligation between employee and company. The binding limits of the employment may require a judge to consider the implications of the implied contract. The courts will look at all the evidence to make the final decision over these matters.

Weighing all the factors is essential. Reviewing the at will versus the implied contract is crucial so that the right decision takes over the matter between the company and employee. The wording of paperwork may even stipulate an at-will circumstance, but all the factors may point to an implied contract such as salary obligations, reasons for termination and a start and end date of employment. These matters are more important than the words of at will within the documentation to the courts. An at-will policy may not supersede implied contract agreement terms.

Legal Support for Implied Contract Employment

If the employee faces termination for at will rules with the company but has an agreement that expresses an implied contract, he or she should hire a lawyer to determine if the claim is valid. The language and all surrounding factors may point to an implied contract that requires upholding by the company.

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Disclaimer: Every effort has been made to ensure the accuracy of this publication at the time it was written. It is not intended to provide legal advice or suggest a guaranteed outcome as individual situations will differ and the law may have changed since publication. Readers considering legal action should consult with an experienced lawyer to understand current laws they may affect a case.

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