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In evaluating job offers for start-ups and for firms that have different forms of compensation (equity, stock options, bonuses, etc.) it is often a thrown around phrase that you should "get it in writing" when you negotiate something about the terms of employment.

For example, you may try to negotiate that you receive unrestricted stock instead of stock options; for a start-up that requires you to take a pay cut to join the firm, you may try to negotiate that after the next round of funding, your salary will raise to the level before leaving your old job; you may try to negotiate that stock options will vest more quickly than the current company policy; one very important point is to negotiate that equity expressed as a percentage of ownership of the firm will not be diluted by subsequent funding rounds and share issuance (known as "refreshing"); lastly, you may try to negotiate percentage of time that will be spent on different kinds of projects (a personal open source software project that the firm is interested in, attendance at conferences, etc.)

In all of these cases and many others, endless blogs, books, and career advice columns suggest that you "get it in writing" but I am not convinced that this would materially increase the chances of a company honoring such agreements when they are part of an at-will employment agreement instead of a binding contract.

For example, it could be put in your terms of employment that you get to attend a swanky conference in Hawaii every year. But then the company faces tough financial times and cannot pay for it. So you effectively just lose the dollar-valued equivalent of the experience, knowledge, relaxation, and travel from the conference. It would be like directly paying you less money. But under an at-will agreement, to my knowledge you can do nothing except for quitting or raising the concern with a manager or the Human Resources department -- usually resulting in no help in situations like that.

Yes, the company risks it that you might quit if they take away promised items from an agreement. But they might just wait until they can confirm you are in a life position where, for reasons ostensibly totally unrelated to your job agreement or the firm's situation (such as mortgages, children, tuition, etc.) the firm knows or believes you can't afford to take any action if they simply do not follow through on the agreement. And it would be very hard to prove that this was the firm's reasoning, as firms have nearly limitless plausible deniability when it comes to explaining why they are doing something.

Are there any legal conditions surrounding at-will employment contracts that would prevent this kind of behavior?

Is it valuable in any kind of tangible sense (i.e. legal enforcement, rights to claim wrongful termination or hostile working environment) to have negotiated such things specifically in writing specifically when it is a an at-will agreement?

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Have you considered the flip side of what happens if one doesn't have it in writing? This brings up a you said/they said debate I'd imagine unless someone recorded the conversation. –  JB King Feb 12 at 17:56
    
You are correct. If it came at no cost, then getting everything in writing would always be best. But in reality there is the cost that an offer will be rescinded or otherwise withdrawn if you ask for too many provisions. You have to pick and choose your battles carefully so that you do get the important things into the contract, but without making yourself seem so unsatisfiable or so costly that the firm just passes or feels the effort to make the contract is not worth it. If it turns out that "in writing" for at-will agreements is useless, then you can spare yourself that risk. –  EMS Feb 12 at 18:19
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Not sure if your jurisdiction has the idea of "constructive dismissal" en.wikipedia.org/wiki/Constructive_dismissal but where I live if you change the terms of employment dramatically, the person can get the kind of severance they would get if they were unjustly fired. Having a written record of the terms and comparing that agreement to the current reality would be all it takes to demonstrate the terms have been changed, and open up that situation. But a lawyer would be the right person to discuss that with. –  Kate Gregory Feb 12 at 18:20
    
That's a good point. It would certainly function well as an answer to the question if you feel like writing it up as one instead of in the comments. Thank you for the link. –  EMS Feb 12 at 18:23
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4 Answers 4

up vote 8 down vote accepted

The primary benefit of getting things in writing when you're an at will employee isn't to prevent the company from intentionally weaseling out on promises. The primary benefit is to ensure that both parties agree on exactly what was discussed so that if and when an issue comes up in the future, there is a written document that both parties agreed to that can be referenced.

Companies are generally not in the business of promising the moon to potential employees with no reasonable intention of following through. Sure, it would be possible for the employer to hire a new at will employee at a salary of $x and then announce on the second day of employment that, unfortunately, the employee's salary had to be reduced to 0.5*$x. That's perfectly legal but it would seriously damage the company's reputation and make it very difficult for the company to recruit good candidates in the future.

Getting things in writing ensures that the company fully intends to honor the terms of the agreement. If you get an offer of $x in writing, that implies that everyone has signed off on that number, the number has been budgeted, and that the company fully intends to pay you that amount. Similarly, if you get written assurances that you'll get n hours per week to devote to improving some open source package, that's a pretty strong guarantee that everyone that needs to sign off on such a clause has signed off on it. Is it possible that in 6 months something will change and the project will no longer be something the company leverages or that the project will fork and the company will want you to focus on a fork that you might not prefer? Sure, that's possible. But you can at least be confident that on day 1, you and the company are on the same page about expectations.

Unfortunately, when people discuss contract terms without writing them down, it is very common for people to hear what they want to hear and for both parties to have a different understanding of the agreement. For example, your prospective manager might talk about being supportive about conferences that you'd like to attend. To that manager, that might mean something like giving you paid time off to attend local conferences. To you, that might mean the company footing the bill for a conference across the country plus airfare and hotel accommodations. Getting things in writing forces both sides to clarify their point of view and identifies where there are discrepancies. If the company is going to agree to, say, a $5000 budget for conference fees, hotels, flights, etc. then that has to be incorporated into the company budget. Written agreements are also much clearer when additional parties are involved-- if the person that hires you moves on and is no longer your manager, it's much easier for your new manager to refer to a written agreement than to try to figure out what you and someone else verbally agreed to.

Of course, it is possible that in the future things will change and the company will be unable to live up to some of the promises they made-- funding falls through, sales fail to materialize, etc. If a company is trying to decide between honoring commitments they made in writing to one employee or general verbal assurances it made to some other employee, though, the general verbal assurances are likely to be abandoned first.

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It still seems there's an unexplained asymmetry. When it comes to something hard-to-enforce, such as granting an employee time to pursue "interesting" projects, it favors the company given that the employee has no ability to enforce the agreement. Still, this is a very thoughtful explanation and it makes sense that they function more as mutual expectation setters than legally enforceable contracts. –  EMS Feb 12 at 22:03
    
@EMS - The employee can't enforce the agreement in a court of law but that doesn't make it unenforcable. In discussions with management, having a written agreement makes it very likely that they'll do whatever they can to live up to the terms of the agreement. Perhaps they'll insist that "interesting" projects have a more tangible relationship to the company than what you might prefer. But it's unlikely that they'd want to suffer the reputational damage of unilaterally changing the terms of the agreement and risk that doing so would drive the employee away. –  Justin Cave Feb 12 at 22:14
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I have to say 'getting it in writing' makes it legally binding, to the same extent that your salary in writing legally binds the company to pay you that rate for services rendered. It is part of a two way contract between you and your employer. The second part is of course, the employee handbook.

Anything in writing that the company doesn't adhere to puts them at risk for being sued for breach of contract. This is me referring to your mention above about benefits, salary, etc. Yes, if you sue them they'll probably terminate you, and if you're an 'at will employee' there probably isn't much you can do about that (insert positive union comment here), you could try a wrongful termination suit but one would have to consider if the trouble is worth the reward.

On the reverse, if you breach your contract as an employee, its easier (and maybe cheaper depending on the circumstances) for the company to let you go as opposed to sue you for 'breach of contract', as stated -- depending on the circumstance. They probably won't let you off so easy for multimillion dollar embezzlement, for example.

While searching the internet to back up my ravings I came across this article from americanbar.org, which confirms this practice of the courts looking at the employer-employee relationship as a contractual obligation, and when there is no definitive length of the contract it is considered 'at will', with either party able to abort the contract at any time.

Lastly, regarding Hawaii -- Most companies nowadays have lawyers to add the legalese where they'd NEVER guarantee a trip to Hawaii every year without a clause such as

as company standing permits.
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On the last point -- maybe the example of the Hawaiian conference is extreme -- but this is exactly my point. Negotiating super hard to absolutely keep out phrases like "as company standing permits" is what I'm talking about. If you work hard to negotiate something in that is not qualified by that kind of catch-all, employee-bears-all-the-risk language, can you really bank of the company following through under risk of lawsuit? You provide some confirmation that the answer is "yes." –  EMS Feb 12 at 17:12
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Additionally the person promising you the benefit may leave before you get it , so in wiritng gives you somethign you can point to when you get a new supervisor when you ask for that bonus or that pay raise promised at some later date. –  HLGEM Feb 12 at 17:12
    
Yes, absolutely. –  EMS Feb 12 at 17:13
    
In fact, after reading your American Bar link, I am not convinced that at-will agreements would matter. There appears to be a tricky and involved process in trying to argue legally whether the at-will agreement constituted any kind of contractual relationship, and merely having stated promises in an at-will agreement is not sufficient. For example, many at-will agreements will specifically state "this is not to be considered an employment contract" or something similar, which can protect the company. The cases where items from a handbook or at-will agreement held up in court seem exceptional. –  EMS Feb 12 at 17:21
    
@EMS ...tricky and involved process = hire an attorney :-) You're right about the not to be considered an employment contract part, but since the company drafted the 'not a contract' contract, it makes sense it would be structured to protect them. But, how can a promise to provide incentives such as a salary in writing not be considered legally binding? Just thinking aloud –  BigHomie Feb 12 at 20:13
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Sometimes there are people in the interview process who don't fully understand the details of the compensation packages. "Of course anyone with your title automatically gets company stock after one year." They may mean well, but this could be a promise they can't keep.

Who can remember all the little promises made during a lengthy interview process? Contracts aren't guarantees, but they can offer clarity assuming both sides understand the wording and/or are trying do the right thing in the spirit of the contract and not use it as a tool to screw the other person over.

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An employer can pretty much do whatever they find to be necessary, be it because they've fallen on hard times, or because you're not a good "fit." Just because it's part of a offer letter and they violate the terms, doesn't mean that you have any reasonable recourse. Suing a former employer when you are fresh out of a job is a difficult undertaking. They have all the cards, and the resources.

Getting things in writing does mean that the two of you have an understanding of the terms of your employment. It's a place to start discussions when things start to fall apart, not a guarantee.

I was one place where we used to monitor usage of the Xerox machines. When the business took a wrong turn, and had to renege on some promises, duplicating costs went up considerably. All those copies of resumes for people who took the hint, and decided it was time to move on.

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