The Unintended Employment Contract - How offer letters and policy manuals can turn into contracts.

Illinois, like most states, follows the employment-at-will doctrine. Therefore, generally speaking, both the employee and the employer are free to terminate the employment relationship at any time and for any reason, provided that the reason for the termination is not forbidden by statute or public policy. Most employers seem to understand this general principle. What they do not seem to understand quite as well, however, is that the employment-at-will doctrine has, over the years, been diluted by the courts. As such, in Illinois, as in many other states, employers can now find themselves bound up in an unintended employment contract that precludes them from being able to terminate what they thought was an at-will employee.

How can this happen, you may ask?

Illinois courts have repeatedly recognized that an employer’s personnel manual, offer letter, employment application, and employee handbooks can all unintentionally create an employment contract so long as the documents in question (1) contain an offer or promise, (2) that is made to the employee, (3) and the employee accepts the promise or offer by either commencing or continuing to work after learning of the promise. When these conditions are met, the employee’s continued work for the employer can constitute consideration, thereby potentially forming a valid contract. In other words, if an employer provides an offer letter or policy manual to an employee which promises them employment, and the employee accepts that promise by starting work, that employer may find themselves having unintentionally just entered into a binding employment contract. In such a situation, the employee may have the right to pursue damages against the employer, based on a breach of contract claim, if they are subsequently terminated.

So what can an employer do to protect themselves from such unintended contractual obligations?

Employers need to take precautionary measures. These measures should include a consultation with an employment attorney. The employment attorneys at Imeri Rogers can help define the problems and find a solution. Beyond that, employers should ensure that they eliminate any and all references to guaranteed employment or employment for a specific time period. Employers should also look to include specific language which clearly states the offer letter, policy manual, etc. is not intended to be a contract, does not guarantee employment for any fixed amount of time, and that the employment relationship between the employer and the employee is and will remain employment-at-will.

For more information relating to employment law, please feel free to contact the Bloomington, IL employment attorneys/lawyers at Imeri Rogers, LLP.