Offer Letters: Preserving At-Will Employment Status

The benefit of long-term employment relationships cannot be overstated. Corporations that recognize the value and contribution of their employees tend to have longer term employees. And the longer an employee stays with a company, the better the employee understands the products, services, and business of the company. Both the employee and the company benefit from such a supportive culture.

Cultivating long-term employments relationships is not inconsistent with reserving the ability to end a relationship that is not working. The question is: can a company that provides a rewarding environment fostering long-term relationships preserve the at-will status of its employment relationship with the employees? The answer is yes.

An at-will employment relationship is one that may be terminated by the employer or employee at any time, without cause or notice. And the first step to creating an at-will relationship is to be clear about it in the offer letter.

Offer letters that spell out the major terms and conditions of the employment relationship are vital to setting clear expectations between the company and employee. Subjects such as the reporting relationships, scope of duties, compensation, benefits, confidentiality, and protection of trade secrets are included. If the company is an at-will employer, that should specified as well.

Admittedly, it can be difficult to discuss at-will relationships without creating undesirable legal undertones in the letter. But that should not dissuade a company from including the information in the offer letter and there are other topics covered in the letter that already set a somewhat legal tone anyway.

Also, there are ways to soften the language a bit so as not to appear overly officious. For example, an offer letter can say something like:

We look forward to developing our relationship with you and hope you view this opportunity as a chance to have a long term positive impact on our business. Nonetheless, please understand that ABC Company is an at-will employer. That means that either you or ABC Company are free to end the employment relationship at any time, with or without notice or cause. And nothing in this letter or ABC policies or procedures, either now or in the future, are intended to change the at-will nature of our relationship.

There is no way around some of the rigidity of the message being delivered. But if the company has hired well and manages the employment relationship well, the issue of at-will status hopefully will be inconsequential. Also, in this day and age, most employees have come to expect and understand much of the legalese included in offer letters.

Although including the at-will language in the offer letter is only one of many things a company should do to try to preserve the at-will nature of the employment relationship, leaving it out altogether can cause insurmountable problems later. Notice on the front end of the employment relationship that it can be terminated at any time, with or without cause, is a good first step toward setting proper expectations and possibly protecting the company from liability in the future.

Barrie Gross is former Vice President and Senior Corporate Counsel (Employment Law) for an international Fortune 1000 company and is a regular contributor to AllBusiness.com. She is the founder of Barrie Gross Consulting, a human resources training and consulting firm dedicated to assisting companies to manage and develop their human capital. Visit www.barriegrossconsulting.com to learn more about Barrie and the services BGC provides.

Note: The information here does not constitute legal advice and should not be relied upon as legal advice. If you have a legal issue or wish to obtain legal advice, you should consult an attorney in your area concerning your particular situation and facts. Nothing presented on this site or in this article establishes or should be construed as establishing an attorney-client or confidential relationship between you and Barrie Gross. This article is provided only as general information, which may or may not reflect the most current legal developments or be complete.