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Creating Contract Language for At-Will Employees

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Are you an "at-will employee?" Most are. At-will employment is a relationship between an employer and an employee that gives the employer the right to fire someone without "just cause." As long as the reasons are not illegal, an employer can fire an employee for any reason - or no reason - at any time. This means that you can be fired without any warning or notice of any kind by your employer without any consequences.

Because you can potentially be let go whenever the employer feels like you should, it is important to know if you are an at-will employee. The answer can be found in the language of your employment contract or offer letter, if you have one, or some type of handbook or code. An at-will employment relationship is usually created with explicit language such as "all employees are 'employees-at-will'" along with language that clarifies and reinforces that the employer has an unrestricted right to terminate the employment relationship at any time without reason. But just having this clause may not be enough to clearly create an at-will employment relationship.

An At-Will Employment Case Study

In a recent Appeals Court case, the New Jersey court looked at the question of what exactly it takes to create at-will employment in a contract. The case involved a former employee who took medical leave from the bak she worked for and returned to find that her employer moved her to a new unit - and that they were downsizing this new unit.

The court had to decide whether the contract between the employee and the bank "clearly and unambiguously" formed an at-will employment that allowed this former employee to be fired by the bank without notice or cause." At some point while the employee was working there, the bank provided a pamphlet to the employee which read

"Employees of . . . [this] Bank are generally employees at-will. This means that both the employee and [the Bank] have the unrestricted right to terminate the employment relationship, with or without cause, at any time . . . . It should be noted that nothing contained in this . . . shall constitute a contract of employment or a contract of agreement."

While this language might seem clear, the Court said that there was room for interpretation for two important reasons:

  1. After comparing language found in other contracts, the contract here only denied that at-will employment was created, rather than completely "disavow" it, and

  1. The Court found two different ways for the language to be interpreted, meaning that there was room for someone to misunderstand it.

The decision was favorable to the fired employee.

Key Points

Chances are that your employment is an at-will employment relationship. However, if a question ever arises, it is worthwhile to contact an attorney for a consultation. Contract language may not always be as clear as it seems on first sight.

Angela Yu is a New Jersey and New York attorney with a multifaceted practice area focusing in corporate, real estate and general contract law. She uses her interest in real life application of the law to author articles and other scholarship on a broad range of cutting-edge legal and business topics. Ms. Yu is a published legal author and holds a J.D. and M.B.A. from Rutgers School of Law and Rutgers Business School. Neither she nor Mike Farhi provides legal advice on this website. This blog post and any blog posts do not constitute legal advice.

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