How do At Will Employment Agreements and Employment Contracts in Colorado Differ?

There are a lot of significant differences between having at will employment status and being truly under an employment contract. As we discussed a little bit before, an at will employment arrangement in Colorado, and in most states, means that you or the employer can terminate your employment at any time for any reason or even for no reason.

At the opposite end of the spectrum is when you actually have a true employment contract with your employer which means you have a document, a written document, which defines terms of salary, compensation, benefits and most significantly to create an employment relationship that is contractually based, there has to be some definition of the time period for the contract and how long the employment arrangement is going to last. Very common in an employment contract is defined terms which allow the employer to terminate your employment, such as defined cause. To say you will continue to be an employee with ABC Company for a period of five years unless you engage in the following kind of actions and we find that you’ve done the following things. Then ABC Corporation, under the terms of the contract, can make a decision to terminate your employment.

On the flipside, of course, there can also be obligations on you as the employee if it’s a multi-year contract with the term of employment that you can’t quit or leave employment without specific events happening. It’s a very, very different arrangement and is the opposite end of the spectrum of at will employment. An employment contract is typically an agreement that is drafted up, typed up and written up by the parties. Both parties, the employer and the employee, have an opportunity to look at it, negotiate the terms, figure out how many years it is, what the salary is, what the benefits are, what the cause is for termination, if there is any cause for termination. That’s not the end of the question in Colorado because there can be circumstances in which a series of emails or a single letter coupled with some other promises or a series of conduct between the parties or, in some circumstances, promises that are made in an employment manual can be sufficient to actually create a contractual employment right versus at will employment.

It’s really important for you to do a couple of things. One, if you’re going to execute an employment contract with a company, have a lawyer take a look at it first and guide you through the process because there can be issues like non-compete clauses, non-solicitation clauses of former employees or former clients if you leave the employment of the company. There’s a lot of legal mazes and legal issues that can come up.

If you need help determining whether your employment contract is valid, don’t hesitate to reach out to Miller & Steiert, P.C. and discuss your situation with us.