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Employee contracts: what they actually are and what they mean

Michigan employment contracts are usually thought of as an agreement you sign when you start a new job. They include the details of your salary, vacation and other benefits you will receive in exchange for the work you are expected to perform. More or less details can be included. But is that really what an employment contract is?

An employment contract can be nothing more than an employment relationship where the employer and the employee both understand the terms. For instance, an employer can offer an employee a job explaining what he or she will earn (something of value) in return for his or her services. The employee may accept the offer and go to work. As long as the terms are mutually agreed upon, a written contract is not necessary. However, "subsequent words and actions of the parties" must not be contrary to the terms agreed upon.

This oral agreement is called at-will employment. In at-will employment, employers or employees can break the employment agreement at any time. Employers should be careful of the language they use, so as not to promise employees that they will be employed indefinitely. Even though they do not have a written contract, the employment relationship is based on intention.

Michigan upholds the at-will employment law unless the employer has made it clear orally, written or by implication or actions that the employee would only be let go "with cause." Otherwise, an employee can be fired with no cause.

There are exceptions to the at-will law, however. An employee cannot be terminated due to discrimination of race, gender, disability, age or religion, whether they are an at-will employee or a contracted employee. Discrimination is against the law. An employee also cannot be terminated as retaliation for whistleblower activities or other protected activities, such as participating in an investigation.

If you have any questions regarding your employment, or if you have been terminated for reasons you are not sure are legal, you should consult legal counsel. Don't allow your rights to be violated by a misunderstanding of Michigan employment laws.

Source: BLR (Business and Legal Resources), "Michigan Employment Contracts: What you need to know," accessed March 22, 2018

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