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No contract with employees? Feel free to change terms of employment

by on
in Employment Law,Human Resources

Employers that don’t require employees to sign employment contracts are free to change the terms of employment anytime they want.

By staying on the job, employees legally accept the new terms and become bound by them. That’s true even if they continue working under protest.

Their only remedy would be to quit and sue over the change.

Recent case: Attorney Sara Morton accepted a job offer with a law firm. The parties never signed an agreement, but Morton alleged that she had been promised health insurance coverage, effective immediately.

That didn’t happen. Instead, the lawyer who owned the firm said she had to find her own individual health insurance policy. He said he would either pay for it with the firm’s credit card or reimburse her if she paid the premium.

She had trouble locating a policy and then suffered a serious injury. Without health insurance, she incurred huge medical bills. She was also terminated and immediately replaced.

Morton sued, alleging the firm broke its contract to provide coverage.

The court disagreed. It said employers are free to change the terms of employment. Thus, even if the original terms included health coverage, it was OK to change that after Morton began work. Her choices were to either quit and sue for coverage or continue working under the new terms.

She did the latter, so the case was dismissed. (Morton v. Kelley, No. 01-09-00428, Court of Appeals of Texas, 1st District, 2010)

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