Your employees’ perceptions of the policies in your office may be very different from the policies you actually have in place. This may be inadvertent on your part but resulting from certain actions and behaviors your employees witness routinely. Despite having in mind specific protocol for disciplinary actions and terminations, for example, you may project an entirely different philosophy in the way you handle such matters in real life.
These perceptions and others may result in your employees believing an implied contract exists in the workplace. Implied contracts can be dangerous to you if an employee believes you have treated him or her differently from how you treated others in the same situation. The employee may feel you have breached an unspoken contract that you established by your actions toward those other employees.
Business owners may not realize they have set a certain standard in their offices by the way they handle various situations. For example, if you routinely give raises, bonuses or promotions for employee actions without following standards of merit or seniority, an employee may cry foul if he or she does not receive a similar adjustment.
Additionally, you may accidentally establish an implied contract right from the start during the hiring process. This can occur if you make off-handed statements about hiring someone permanently or offering special treatment to a worker who demonstrates loyalty to the company. A potential employee may feel you breached an implied contract if you fail to follow through by offering employment or granting a promotion after a certain length of time on the job.
A handbook as defense against implied contracts
An employee handbook can offer some legal protection against claims of a breached contract. Your handbook should have clear language stating that all employment is at-will, according to New Jersey laws, and that the handbook itself is not a contract. Make sure you reserve the right to alter, add or remove policies from the handbook but that you notify your employees of those changes. Your employees should sign an acknowledgement that they received, read and understood the handbook and its contents.
Most importantly may be training your workers on the terms within the handbook so there are no misunderstandings about the policies and procedures in your office. This should happen upon hiring a new employee and at any time changes are instituted or misunderstandings occur. Finally, knowing your own policies and following them in word and action may prevent confusion that often leads to costly legal disputes.