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Beware offer letters that seem to imply that they are employment contracts

by on
in Hiring,Human Resources

If you want to retain the ability to fire at will, make sure any memos, letters or emails detailing a job offer don’t create an employment contract. That means never promising that termination will be for cause or for any list of reasons.

Recent case: Aubrey Burkett worked for Ulrich Barn Builders. His offer letter included his salary, commission terms and details on the company’s contribution to health insurance. Both Burkett and the company president signed the letter, which was captioned “Employment Contract.”

When Burkett was terminated, he sued, alleging the company breached the employment contract.

He lost. The court said that no­­where in the letter was there any indication that the employer agreed only to terminate Burkett for specific reasons such as cause. Without that, Burkett remained an at-will em­­ployee with no contractual rights. (Burkett v. Ulrich Barn Builders, No. 10-11-00392, Court of Appeals of Texas, 2012)

Final note: This employer created unrealistic expectations that could have been avoided. Why call something an employment contract if that’s not what you intend? Burkett probably thought what he signed was indeed a contract and that may have prompted him to sue.

A better approach is to have your attorneys approve a standard offer letter that includes a disclaimer making it clear there is no employment contract.

That way, there is no question about your intent and no need to get a court involved in interpreting what the letter means.

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