Employment Contracts Modify At-Will Employment

A written or oral employment contract can override the at-will employment presumption and create a contract to terminate only for cause.

If an employment contract specifies that you will terminate only for cause, this creates an implied covenant requiring you to exercise “good faith and fair dealing” in the employment relationship.1 Essentially, this means you should make decisions on a fair basis and treat employees who are similarly situated in the same manner. “Similarly situated” means employees who are in the same general job categories and who have similar seniority and rank. Two employees who are both secretaries but in different departments are probably similarly situated, unless one is a new hire and the other has worked for the company for many years.

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