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Frequently Asked Questions Regarding Employment Contracts

Employers and employees can enter into agreements just as anyone else can. But the laws that govern those contracts may be a little different. In Alabama, employment contracts can be either express or implied agreements that serve to modify the “at-will” employment relationship presumed by law in our state. An express agreement is usually a written one that establishes the specific terms of the employment relationship. An implied agreement, on the other hand, is created by certain representations the employer makes to an employee which a court might construe as an offer of employment. Alabama law requires that enforceable employment contracts must be in writing. The only exception is if the contract can be performed in less than a year. This article will answer some of the most common questions regarding employment contracts.


Q. Can employment contracts be created by language in my Employee Handbook?


There are have been several cases in Alabama holding that certain statements included in Employee Handbooks can constitute an actual or implied contract that modifies the at-will status of an employee. This is how it works. If the language in any official employment document distributed to employees is specific enough to constitute an offer to the employee, that offer of employment is accepted when the employee continues to work after receiving the offer.


Q. How do I know if my employment contract is automatically renewed?


Much like other contracts, an employment contract can include language that creates automatic renewal. Typically, it will say that the employment relationship lasts for a specified period of time and then automatically renews for another specified period of time. In most cases, the renewal language will include certain conditions that need to be met before the contract will automatically renew. One catch is that, if there is any express language to the contrary, the renewal may not be valid as an implied contract. If you have questions about any automatic renewal language, speak to our Birmingham employment lawyers.


Q. What if I didn’t know I was signing an employment contract?


In some cases, such as when an employment agreement contains an arbitration clause, employees may not want to be bound by purported agreements. Usually, the main issue 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.


Q. What are the advantages of having a valid employment contract?


An employment contract not only applies to you, but it also binds your employer. This means your employer will not be able to easily change the terms of your employment for its own benefit. Instead, your employer will need to renegotiate the terms of the contract if it wants to change
the terms of the contract. The same is true if your employer wants to terminate your employment early.


If you feel you have been the victim of discrimination or retaliation in the workplace, or if you have any other questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Wrady & Michel, LLC. You can contact us either online or by calling us at (205) 265-1880. We are here to serve you!