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Phrase job offers carefully to avoid confusion, lawsuits

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in Employment Law,Firing,HR Management,Human Resources,Leaders & Managers,Management Training

Issue: What you don't say in a job-offer letter may be just as important as what you do say.

Risk: Fired employees may try to use poorly written job-offer letters as proof of wrongful discharge.

Action: Create a standing employment-at-will clause that managers can include in their offer letters.

Good job-offer letters can be effective HR tools. They can clear up any miscommunication about the terms (salary, benefits, etc.), they can clarify the new candidate's job duties and they give prospects a sense of security when resigning from their current job to work for your organization.

The problem: Imprecise wording in offer letters can come back to haunt you. That's why they must be carefully drafted to avoid creating a contract of employment for a specific time or limiting your organization's right to terminate the person. Consider including an "at will" employment statement in the offer letter itself.

Recent case 1: A terminated employee sued his former employer for wrongful discharge. His evidence? An employment agreement and job-offer letter that included multiyear schedules for salaries, stock options and other benefits. The Colorado Supreme Court said those terms suggested the organization didn't view the person an at-will employee. (Dorman v. Petrol Aspen Inc., 914 p. 2d 909)

Recent case 2: A similar wrongful-discharge case also revolved around stock options and benefit schedules in a job-offer letter. But in this case, the 1st U.S. Circuit Court of Appeals ruled in favor of the employer. The difference? When hired, the employee was given the company's employee handbook, which included a signature page specifying that he was "not hired for a specified term" and that he was being employed at the company's will. (Cochran v. Quest Software Inc., No. 02-2326, 1st Circuit)

Bottom line: Protect your organization, and your managers, by including an at-will employment statement in both employee manuals and on employment applications. Send annual reminders of employees' at-will status in paycheck envelopes.

Finally, ask upper management to limit the authority to make employment offers to only a few managers. Then, educate those managers about how to include at-will provisos in any job offers.

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