Implied Employment Contracts

Most common employment hiring is presumed to be "at will" employment relationship where the employer is free to discharge individuals "for good cause, or bad cause, or no cause at all," and the employee is equally free to quit, strike, or otherwise cease his work with that employer.  Either party to the “at will” employment relationship has no liability if the relationship ends provided there is no express employment contract defining the terms of the relationship.

Laws on Exceptions of Implied Employment Contracts

However, thirty-seven States do recognize an exception to the “at will” employment law doctrine by way of the “Implied Employment Contract.”  Under an implied contract exception to the “at will” status, an employer may not fire an employee when an implied contract has formed between the employer and the employee, even though no express written document exists.  Defining and proving the terms of an unexpressed, unwritten “implied contract” is often difficult and the burden of proof lies on the terminated employee.  The required proof of the implied contract may often be found inside the employee handbook provided by the former employer at the initiation of the relationship.  An employer's personnel policies often detailed in the employee handbook can indicate that an employee will not be fired except for good cause or specify a process for firing. If the employer fires the employee in violation of an implied employment contract, the employer may be found liable for breach of contract. 

Court Dealings with Implied Contracts

Implied employment contracts are also referred to by courts as “covenants of covenant of good faith and fair dealing exceptions.”  The covenant of good faith and fair dealing exception to the "at will" employment doctrine and contractual relationship represents a significant departure from the traditional employment law.  The element of good faith and fair dealing is implied into every employment relationship and employer personnel decisions can be held subject to a “just cause” standard or terminations made in bad faith or motivated by malice may be prohibited by way of an implied contract.

Enforcing Implied Employment Contracts and Legal Help

The bad news is that courts very often refuse to enforce an implied employment contract in the absence of extraordinary circumstances.  Employers can often successfully define the limits of their own obligations in the employment relationship with a former employee even if the terms violate norms of good faith and fair dealing.  This is a situation where seeking out the assistance of an experienced employment attorney may prove extremely valuable to a wrongfully terminated employee.