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June 1st, 2017

Danger Can Lurk in Job Offer Letters

Job applicants (especially those at supervisor and management levels) more and more are wanting it “in writing” when a job offer is made.

It’s becoming more common for employers to give job offer letters (or letters of employment) to new hires. However, this type of document carries risks for the employer.

Job offer letters and verbal promises can come back to haunt you. This doesn’t mean you should give up speaking or writing. But it does urge you to take stock of your interviewing process and the way you make a job offer.

Usually, the real dangers of the offer letter happen in one of these ways: by being construed as a contract, by containing unintentional promises or the letter conflicts with what candidates were told during the interview.

A frightening fact: Letters determined to contain a contractual agreement, and letters containing no contractual agreement, are for the most part indistinguishable.

Everyone involved in interviewing applicants, negotiating with applicants and making job offers to applicants needs to be cautious. This means not making any unintended overt or implied spoken or written promises or offers to applicants. Any promises made to applicants — whether orally or in writing, whether clearly stated or implied — may be construed by applicants and their attorneys as elements of enforceable contracts.

For example, in one court case, an employee, Robert Baum, argued that his employer Helget Gas Products terminated him in violation of a contract. According to Baum, in the hiring interview, he said he needed a three-year contract. He took notes in the discussion with the hiring manager. He wrote “Contract with Helget Gas Products” at the top of his notes, gave them to the manager, and the manager signed the notes. Baum was fired a year later. The court ruled the signed notes created a contract.

What to do: If you use an offer letter, go through the following checklist before preparing it.

Job Offer Checklist

1. Ask yourself, does this letter say what you mean and mean what you say?

2. Keep your letter to specifics such as pay rate or salary, starting date, and position being filled.

3. Make sure all related documents agree. For example, don’t tell the candidate the company will buy her home if she is unable to get it sold, if your employee handbook contains a policy that prohibits this practice. The most obvious documents to check include your handbook, union contract if applicable, application form, and the advertisement for the job.

4. Include a statement like the following, near or at the end of the document: “I understand no manager or representative of ABC company, other than the president or vice-president of ABC Company, has any authority to enter into any agreement for employment for any specified period of time, or to make any agreement contrary to the foregoing.”

5. If your offer letter includes job duties, include a statement like this at the end of the list of job duties: “Perform other duties for which you are qualified, as assigned by management from time to time.” Include a statement like this so an employee cannot in the future argue a breach of contract if and when some job duties are added or changed.

6. Make it your policy to always have your letter reviewed by another associate, preferably one who has not been involved in the hiring process.

7. Include a clear statement stressing your employment-at-will rights.

8. Have an attorney familiar with employment law review your draft of an offer letter before presenting it to an applicant.

[NOTE: Information and guidance in this article is intended to provide accurate and helpful information on the subjects covered. It is not intended to provide a legal service for readers’ individual needs. For legal guidance in your specific situations, always consult with an attorney who is familiar with employment law and labor issues.]

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