Law of Implied Employment Contracts
Wrongful termination lawsuits often involve allegations of discrimination or harassment. In some circumstances, an employee may be able to allege wrongful termination on the basis of an implied employment contract. Whether an implied employment contract exists depends on state laws and the relevant facts and circumstances.
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At-Will Employment
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Absent a written employment contract, employees are generally presumed to be at-will workers. As an at-will employee, your employer has the right to terminate your job with or without cause (unless an exception applies). In contrast, employees under contract generally must be fired "for cause." Under certain circumstances, an implied employment contract may arise whereby your employer needs cause in order to terminate your job.
Implied Employment Contracts
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An implied employment contract depends on the specific facts and circumstances of a particular employment relationship. Under an implied employment contract, there is no written agreement; instead, the court construes an agreement based on certain representations or facts found in various elements of the job, such as employer statements or provisions in an employee handbook. If an implied contract exists, the employer typically must have a reason to terminate your job, such as for violating company policy or for being insubordinate.
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Examples
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Employees should review employment materials such as handbooks or written letters from the management as well as think about any statements made to them by the management when considering whether an implied employment contract exists. If an employment manual states that employees can only be fired "for good cause," the court may construe an implied employment agreement. Additionally, if the management makes a statement such as "If you live up to company standards, we won't fire you," or says something similar that tends to indicate the business only fires employees for cause, an implied employment may exist.
Other Issues
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Any potential recourse or consequences associated with an implied employment contract are also fact-sensitive. For instance, even if an implied contract exists, the employer may still be able to point to specific actions of the employee that warrant a "for-cause" termination. Prior to proceeding, a person should seek assistance and counsel from a business law attorney.
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