Employment Contracts

Most employees in Virginia, the District of Columbia, and Maryland are “at will,” meaning either they or their employer may end the employment relationship at any time, for any reason. There is no obligation for an employer to prove “cause” or otherwise justify a termination, unless an employee alleges discrimination or some other claim. Consequently, most employees do not have anything that resembles a written “employment contract.” In the view of the law, you do have a “contract,” but it is implied. That is, if you show up for work in the morning, you are agreeing to work under whatever circumstances are present, and your employer, by accepting your work, is agreeing to pay you whatever was your last announced rate of pay. By law, your employer can change your pay prospectively (going forward), even without your consent, but cannot change it retroactively, for work already done.

There may be other legally-enforceable aspects to your implied employment “contract.” You may have promises made in an offer letter relating to job duties or reporting relationships (all of which the employer can change prospectively). There may be benefits, such as health and retirement plans, available to you on the same terms as other employees (such benefit plans must be offered to all employees, pursuant to the Employee Retirement and Income Security Act (ERISA). You may have the right to take leave, or get a leave payout upon leaving, according to company practice, which may be evidenced by how the company generally handles these issues or by a provision in an employee handbooks. Handbooks are generally not considered as conveying contractual rights in Virginia. The District of Columbia gives them more weight. Other states vary in their approach to handbooks.

Some employees have contracts that cover some aspects of the employment relationship, such as arbitration agreements, non-disclosure agreements, non-competition and non-solicitation agreements (some of which may not be enforceable in the courts if they are too restrictive), loans and training programs that require employee payback of funds upon resignation. Each agreement of these types needs to be reviewed in detail to have an understanding of your rights.

There are a small number of employees, usually higher-level executives, who do have actual written employment contracts. Many employees sign such agreements without much thought. We highly recommend a legal review before you do so. Others are the subject of negotiations. We can help there. Written employment contracts may have provisions requiring the payment of severance if an employee is terminated without cause. Others permit an executive to leave employment, and receive severance, for “good reason,” which usually means a reduction in salary or job duties. Other terms can also be included in an employment contract.

People spend a lot of their day and effort working. A contract governing the terms of all that time and effort is worth serious consideration, and serious review. We are here to help.

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