Breach of an Implied Employment Contract

Can a simple handshake be an implied contract between employer and employee? Can an employee sue for breach of an implied contract rather than an actual written employment agreement? The answer to both of these questions may be yes.

An implied employment contract is intended for all parties but is not explicitly in writing. A few examples of an implied employment contract could be an oral promise, a statement in an employee manual or positive merit reviews relating the employee.

How do you protect yourself from this type of action? It is not enough to have just a statement in your employee handbook that states that this is an at-will employee/employer relationship. You should safeguard your business by including integrated at-will employment language with a no oral modification clause in your employee handbook and having the employee acknowledge and sign that he has read it in its entirety.

You can also enter into a written employment agreement that clearly sets out grounds for termination. While nothing can prevent charges being brought against you by a disgruntled employee, taking proactive measures to protect your business can be your best defense.