Carmagnola & Ritardi, LLC | Attorneys At Law

Experienced Employment Defense For New Jersey Businesses

Experienced Employment Defense For New Jersey Businesses

What are the downsides of giving an employee a contract?

On Behalf of | Jul 9, 2021 | Employment Litigation

Most employees work on an at-will basis. You may ask them to give you two weeks’ notice before they leave, but they can technically quit at any time.

To prevent this, you may consider giving an employee a contract. This way, you at least know that they’ll be with the company for the duration of that contract, and you can begin negotiating a new one — if you’d like — when that end date gets near. This can reduce turnover rates and keep your top talent.

But are there any downsides to offering a contract, rather than at-will employment?

The company also has to abide by the contract, altering the worker’s rights

Both employers and employees are bound by the contract. If you breach it, you may face a lawsuit, even if you would not ordinarily be considered to have violated the worker’s rights.

For instance, the contract may state that a worker can only be fired for cause — i.e., there has to be a good reason for the firing. If you simply decide that you no longer want to continue working with them, you can’t terminate them as long as they’re doing their job properly and upholding their part of the contract.

With any other worker, you don’t need a reason to fire them. You can fire them for any reason or no reason or because it is best for the company as long as you are not discriminating against protected classes. An employment contract makes termination far more complex. Companies must therefore be very careful when terminating someone’s position.

Are you already facing such a lawsuit?

If your company is already being sued by a former employee, or if you expect that you will be, you need to know what legal options you have.