Avoiding Unintended Hiring Contracts

Unless you're intentionally entering into a written contract with an employee that guarantees the position for a set length of time, we recommend that you avoid making any statements that could be construed as entering into an employment contract. Since the employment-at-will laws in most states give you wide latitude if you need to fire an employee, you don't want to throw away that privilege by inadvertently giving special rights to someone.

To avoid this, the offer must be stated as narrowly and as carefully as possible. Any statement that alludes to job security can be interpreted by a court as a promise of job security, which might make it extremely difficult for you to fire an employee if you need to.


Statements that designate employees as "permanent" in contrast to those designating employees as "probationary" were found to constitute a contract for long-term employment.

"You will have a long, rewarding and satisfying career ahead of you" and "we will pay one-half your moving expenses now and the balance after one year" were statements construed as meaning that the employment relationship was intended to be at least one year long.

When a prospective employee gives up something of value or quits another job in reliance upon the employer's promises, the courts tend to enforce the promises made in job offers more strictly. While these specific situations may not apply to you, you should be careful not to make any promises or statements that will lead the employee to give something up (like a house or another job) unless you're definitely going to hire him or her.


At the time of hire, a new employee was told that he had to furnish his own car for the position. Since he had no car, he borrowed the money and went out and bought a car. After he bought the car, he was informed that someone else had been hired for the position. The company was liable for money damages because the man had relied on their statements, causing him to buy the car.

In another situation, an individual resigned from a position she held and turned down another attractive job offer, relying on the job offer made by another company. The company refused to hire her, however, because the necessary, favorable references were not received. A court could hold the company to its promise because the reference question should have been resolved before the job was promised.

The best protection is watching what you say. Don't make any statements that imply permanence or even a long-term commitment. Here's a list of other things not to say:

  • "You'll be with us as long as you can do your job."
  • "You will not be fired without just cause."
  • "This is a company in which you stay and grow."
  • "In this company you'll have lots of job security."

Here are some more guidelines you can use to minimize your risk of creating unintentional employment contracts:

  • Review all advertisements and company literature for language that could be even remotely construed as offering employment of a fixed duration.
  • Avoid phrases like "our company family," "job security," or "lack of layoffs within the organization."
  • Include in an offer, whether verbal or written, an explicit statement that "there are no contracts for a particular length of service" and make some reference to "the employer's and employee's right to terminate the employment at will."
  • If the offer is oral, you can further explain that "employment at will" means that the company or the employee can terminate the employment relationship at any time for any reason. Just cause is not necessary.
  • If the offer is written, you can either explain the concept or refer the employee to a handbook where the employment-at-will doctrine is explained.
  • If you wish, you can quote the salary on a weekly or monthly basis in order to avoid the implication that the employment offered is for a year's duration.
  • Review notes of job interviews to determine whether any promises were made, implied or otherwise, that need to be corrected in a formal offer letter.
  • Remember that the issue is fundamental fairness.
  • If you send a job offer letter (even if it's a form letter), put a copy in the candidate's personnel file. If the offer is oral, keep notes of what you said in the file.