3 Things to Keep in Mind if you have an Employment Contract

All employment relationships are contractual, whether or not a contract is ever reduced to writing. An employer and employee can enter into either an express or implied agreement that modifies the “at-will” employment relationship that is always presumed by Alabama law. An express agreement is usually written and sets forth the specific terms of the employment relationship. An implied agreement can be created by representations made to the employee which constitute an offer of employment.

In Alabama, to be valid, an employment contract must be in writing, if its terms cannot be performed within a year. An employment contract can limit the employer’s ability to terminate the employee for any reason. It can also limit the employer’s ability to discharge the employee at any time. Usually, these types of contracts will set forth specific types of events or circumstances justifying termination.

1. Beware of an employment contract that will automatically renew

An employment contract, like any other agreement, can include automatic renewal language. Renewal language would allow for the employment relationship to last for a certain period of time and then automatically renew for another set period of time. Renewal language will typically provide for certain conditions that must be met for the renewal to be automatic. However, keep in mind that an implied contract cannot be valid where there is express language to the contrary. So, employment typically becomes an at-will arrangement when the employment contract ends and, at that point, you no longer have a right to employment.

2. Employment contracts must be voluntary

The main issue here is whether the employee actually signed the agreement voluntarily. If the employee can show that he or she was induced or coerced into signing the contract, then the validity of the contract can be challenged. Generally under contract law, if an employee is given a contract after he or she starts a new job, the contract must provide something of additional value in exchange for signing the contract. Otherwise, the employee is being put at a severe disadvantage. There have been cases, similar to this scenario, where courts have struck down employment contracts signed under these circumstances.

3. Know which employment rights you are giving up by signing an employment contract

Absent a written employment contract, every employee is guaranteed a number of legal rights and protections. Some of these rights are implied, such as the right to reasonable notice of termination, the right to refuse adverse changes to compensation or position, and the right to compete with a former employer. Courts have established these implied rights over time, through case law, in order to encourage fairness.

There are also numerous explicit legal rights that have been enacted by federal lawmakers which, for example, prohibit discrimination or harassment based on gender, race, age, disability, or

pregnancy. There are also laws that protect whistleblowers and protect against overtime and other pay violations.

If you feel you have been the victim of discrimination or retaliation, or if you have any questions regarding your employment rights, please contact Wrady & Michel, LLC, either online or by calling us at (205) 265-1880.

Categories: Employment Law, Contracts
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