After you've interviewed your employee candidates and checked their backgrounds, you are ready to make a job offer. Certain information should be included in the offer, and statements that imply an employee contract should be avoided unless that is your intention.
The hiring process can be a lengthy one but once you have gotten through the interviews, reviewed your criteria and have done the appropriate background and reference checks, you are ready to make an offer to your top choice to fill your employment position. The offer can be made orally, either in person or over the phone, or in writing. Whichever method or combination of methods you choose, you will want to include certain information when you make the offer. Perhaps even more importantly, however, you should be careful to avoid language that implies an employment contract of any kind.
Extending the job offer
When a job offer is extended, it should include the following information about the job:
- the position offered
- location and working hours
- salary (although sometimes salary must be negotiated before the applicant will accept)
- benefits
- starting date
- any papers or information that should be brought on the first day of work
- a date by which the applicant must respond to your job offer, so you can move on to the next candidate if your first choice doesn't accept.
Exercise caution to avoid inadvertently creating an employment contract when you're making a job offer.
Tools to use
An employee hiring package containing an applicant selection criteria record, along with an employment application form and a post-employment information form, is included among the Business Tools to assist you in the process.
Avoiding unintentional employment contracts
The employment-at-will laws in most states give you wide latitude if you need to terminate an employee. You don't want to throw away that privilege by inadvertently giving special rights to someone. So unless you're intentionally entering into a written contract with an employee that guarantees the position for a set length of time, we recommend that you avoid making any statements that could be construed as entering into an employment contract.
How do you avoid an unintentional employment contract? No matter what the form of the job offer is, the principle is the same. Do not make promises, or statements that can be construed as promises, that you cannot or do not intend to keep.
Keep the following guidelines in mind when making a job offer to avoid an unintended employment contract with a potential hire who accepts your offer:
- Avoid promises of job security. To avoid this, the offer must be stated as narrowly and as carefully as possible. Any statement that alludes to job security can be interpreted by a court as a promise of job security, which might make it extremely difficult for you to terminate an employee if you need to do so.
Example
Statements that designate employees as "permanent" in contrast to those designating employees as "probationary" were found to constitute a contract for long-term employment.
"You will have a long, rewarding and satisfying career ahead of you" and "we will pay one-half your moving expenses now and the balance after a year" were statements construed as meaning that the employment relationship was intended to be at least one year long.
- Promises that lead to reliance. When a prospective employee gives up something of value or quits another job in reliance upon the employer's promises, the courts tend to enforce the promises made in job offers more strictly. While these specific situations may not apply to you, you should be careful not to make any promises or statements that will lead the employee to give something up (like a house or another job) unless you're definitely going to hire him or her.
Example
At the time of hire, Mary was told that she had to provide her own car for the position. Mary did not have a car, so she obtained a loan and purchased a car. After she bought the car, Mary was informed that someone else had been hired for the position. The company was liable for money damages because Mary had relied on their statements, causing her to purchase the car.
In another example of detrimental reliance on a job offer, Billy resigned from a position he held and turned down another attractive job offer, relying on the job offer made by another company. The company refused to hire Billy, however, because the necessary, favorable references were not received. A court could hold the company to its promise because the reference question should have been resolved before the job was promised.
- Mind your language. The best protection can be watching what you say. Don't make any statements that imply permanence or even a long-term commitment. Here's a list of other things not to say:
- "You'll be with us as long as you can do your job."
- "You will not be fired without just cause."
- "This is a company in which you stay and grow."
- "In this company you'll have lots of job security."
- More guidelines for avoiding unintentional employment contracts. Here are some additional guidelines you can use to minimize your risk of creating unintentional employment contracts during the hiring process:
- Review all advertisements and company literature for language that could be even remotely construed as offering employment of a fixed duration.
- Avoid phrases like "our company family," "job security," or "lack of layoffs within the organization."
- Include in an offer, whether verbal or written, an explicit statement that "there are no contracts for a particular length of service" and make some reference to "the employer's and employee's right to terminate the employment at will."
- If the offer is oral, you can further explain that "employment at will" means that the company or the employee can terminate the employment relationship at any time for any reason. Just cause is not necessary.
- If the offer is written, you can either explain the concept or refer the employee to a handbook where the employment-at-will doctrine is explained.
- If you wish, you can quote the salary on a weekly or monthly basis in order to avoid the implication that the employment offered is for a year's duration.
- Review notes of job interviews to determine whether any promises were made, implied or otherwise, that need to be corrected in a formal offer letter.
- Remember that the issue is fundamental fairness.
- If you send a job offer letter (even if it's a form letter), put a copy in the candidate's personnel file. If the offer is oral, keep notes of what you said in the file.