Can A Job Interview Form A Verbal Employment Agreement?

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Can A Job Interview Form A Verbal Employment Agreement?The Alleged Verbal Employment Agreement

A woman claims she was offered and accepted a position during an interview. In other words, there was a verbal employment agreement.

She gave notice at her two existing part-time jobs and quit both of them.

One week after the interview, she showed up to complete paperwork at what she thought was her new employer. However, she was told to go away, there was no job, and the company was not hiring.

Related Article – Business Contracts: Why You Should Avoid Email Deals

The Breach of Contract Lawsuit

Unable to get her old part-time jobs back, the woman sued the company for breach of an oral employment contract and related claims.

It remains to be seen who will win this dispute: the alleged employee or the company.

However, even if the company wins the lawsuit, the legal fees and expenses will likely cost more than a couple years of paying the woman a salary.

How To Minimize This Risk

How do you avoid this type of mess with job applicants?

First, have a policy of only making your job offers in writing, making the offer contingent upon signing an employment agreement, and don’t deviate from that policy.

Related Article – Does Your Business Lawyer Draft Contracts That Encourage Dispute Resolution Or Lawsuits?

Second, use a professionally prepared employment agreement that identifies the respective rights and responsibilities of the new employee and you as the employer. If you don’t have one you regularly use with your workers, check out our firm’s Business Contract Legal Protection Package.

Yes, it takes a little time to do this right. But it costs a lot less than a lawsuit because you cut corners in your hiring process.

How To Use Business Contracts To Prevent A Single Point Of Failure

By | Business Contracts, Employment Agreements, Independent Contractor Agreements | No Comments

How To Use Business Contracts To Prevent A Single Point Of FailureBusiness contracts can help prevent your company’s cascading collapse caused by a single point of failure (SPOF). Did you know that one of the biggest mistakes entrepreneurs make is running their ventures so that a SPOF can wipe out everything?

In fact, most small businesses are riddled with SPOFs ready to explode like a land mine when you can least afford it.

For example, let’s say you have a worker (employee or independent contractor) that’s vital to your operations who needs to take a week off to attend a parent’s funeral. If the worker’s absence brings your company to a halt, that’s a SPOF.

Or your software developer acts like a prima donna, making unreasonable demands or not timely delivering. Will your business be held hostage?

Related Article – B2B Contracts: How To Avoid 4 Common Mistakes

And for business owners, the most vital SPOF is the one you see in the mirror, i.e. your business can’t survive without you. Your vacations (if you take one) are 24/7 working vacations where you’re checking text messages, voicemail, and emails to make sure everything’s running.

How To Prevent SPOFs

It doesn’t have to be that way.

Build in redundancy by cross-training workers and finding alternate sources for vital products and services.

One of the best places to start eliminating SPOFs is to identify all of the key tasks that must be performed for your business to function smoothly (including your own responsibilities) and make sure there’s at least 2 to 3 people who can handle those tasks.

The Importance of Business Contracts For Avoiding SPOFs

Then use employment contracts and independent contractor agreements to formalize those responsibilities with each worker to ensure you’re protected. Our firm prepares these types of agreements as part of a Business Contract Legal Protection Package.

Let’s face it. Because it’s essential to your company’s success to make sure no one becomes a fatal bottleneck, you need to put the right business contracts in place to prevent your operations from grinding to a SPOF halt.

On-Call Scheduling Of Hourly Employees: Should Employers Use It?

By | Employment Agreements, Featured Articles, Texas Business Lawyer | No Comments

on-call schedulingSome businesses require hourly employee on-call scheduling (also known as on-call shifts) to ensure there’s just enough workers to meet labor requirements for shifts. This means employees have to put their lives on hold, calling in a couple hours before coming to work to see whether not they’re actually needed for a particular shift.

For the employer, this appears to save money because during slow times labor costs can be minimized by telling an employee not to come in for all or part of a shift. And if the business has a high turnover, such as fast food restaurants, it may make sense to double book employees with the expectation one will quit or simply not show up.

For example, if two employees scheduled for the same position on a shift call in and expect to work, it’s easy to tell one he isn’t needed while requiring the other to show up.

Is On-Call Scheduling Illegal?

As pointed out by Daniel Wiessner in “Retailers to drop on-call scheduling amid state probes,” some states’ attorneys general contend on-call scheduling violates applicable wage laws because it requires hourly employees to perform some work (e.g. calling in one or more times) without getting paid. That’s in addition to the moral issue of putting workers in limbo where they cannot make concrete plans for a day they may or may not be working.

Implementing On-Call Shifts Effectively

If you’re going to use on-call scheduling in your business where it’s legal to do so, be sure to compensate the employee for the burden of being placed in limbo and try to keep such scheduling to a minimum per employee (e.g. no more than one shift per pay period). Just as you don’t want customers to get your goods and services for free, don’t steal your employees’ lives away by abusing their work schedules.

Alternative To On-Call Schedules

Although wage and hour laws vary by state, a better method to meet labor requirements is to replace on-call shifts with a financial incentive making it worthwhile for an employee who has a day off to want to come in and work an extra shift if requested to do so by management. Because the act is voluntary and compensated, employee productivity is likely to increase, legal risks are minimized, and the employer is less likely to abuse the system when there is a direct additional cost to making a call for more labor.

An experienced business lawyer can help you avoid the legal pitfalls of on-call scheduling and other employee wage and hour practices.

Don’t Treat Your Employees Like Strippers

By | Business Contracts, Employment Agreements, Independent Contractor Agreements, Taxes | No Comments

employees independent contractorsAs reported by Jessica Anderson in the Baltimore Sun (Strip club dancers are suing clubs over pay – and winning), strip clubs are getting in trouble by improperly treating strippers as independent contractors instead of as employees.

Although there’s no hard and fast rule as to whether an individual working for your company is an employee or an independent contractor, the U.S. Internal Revenue Service (IRS) does provide some guidance on the issue.

Important Employment Factors

Two key factors that favor employment status are setting the work schedule and controlling how the work must be done by the person. For strip clubs, this meant club management telling the dancers when they had to perform and dictating what they could and couldn’t do when stripping/dancing.

What’s the potential damage by mislabeling employees?

If you treat your employees as independent contractors, you may be liable for back wages, statutory damages, penalties, employment taxes, plus contributions to workers compensation and unemployment compensation funds. These misclassified employees may also be eligible for benefits you’ve provided to your other workers, such as 401k contributions, paid vacation, and health insurance.

How to this problem?

If your workers are really employees, treat them as such from the time you extend an offer to work for you. Pretending they’re independent contractors when they’re not creates a ticking time bomb of legal and tax liabilities you don’t want.

On the other hand, if a worker truly is an independent contractor, it’s often a good idea to make that relationship clear in a professionally prepared written independent contractor agreement signed by the parties. If the contractor decides to assert employment status, you’ve got a contract to point to when trying to convince a judge or government agency that the worker is not an employee.

IRS Form SS-8

If it’s truly unclear whether your workers are employees or independent contractors after consulting with an experienced business lawyer, you may wish to file a Form SS-8 “Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding” (PDF file) with the IRS for a determination as to the workers’ status.

How to Terminate a Contract Early

By | Business Contracts, Business Lawyer, Consulting Agreements, eCommerce Agreements, Employment Agreements, Independent Contractor Agreements, Licensing Agreements, Technology Contracts, Texas Business Lawyer | No Comments

terminate a contract earlyAlthough parties often benefit by having an annual or multi-year contract that either renews automatically or gives one party the option to renew, there are many cases where an ongoing relationship is not financially beneficial.

Whether it’s poor performance, market changes, or some other adverse event, you may want to terminate a contract early.

Contract Terms and Conditions

According to Texas Business Lawyer Mike Young, the first thing to do is review the terms and conditions of your agreement, including any amendments, to determine if there is a clear path to premature termination. “Many contracts provide for early termination by giving advance written notice, particularly when one party is in material breach and fails to timely fix the problem after being notified of the violation,” he said.

Some agreements provide for termination without cause and with little or no notice if the party who ends the contract pays an early termination fee to the other party.

Negotiated Termination

If one party to an agreement is unhappy, the other party frequently is dissatisfied too. If it appears the differences are too great, and the contract is silent on early termination, you may wish to reach out and make an offer to end the deal early anyway. Frequently both sides will agree to this and go their separate ways without a termination fee being paid by either.

Just as it was important to get your contract down on paper in the first place, it’s equally important to ensure that your agreement to terminate early is in writing signed by the parties.

Why? Because memories fade faster than ink.

If there’s a subsequent disagreement about how the relationship ended, you want to be able to rely upon written terms to show exactly what was agreed to and what was not.

Decide Not to Renew

If a contract contains renewal provisions, such clauses frequently permit either party to provide notice of intent not to renew at the end of the current term. Although this is not technically early termination, it does prevent the contractual relationship from continuing longer than the minimum time required.

Be sure to follow instructions to the letter as to the method and deadlines for giving proper notice.

Terminate a Contract Early by Efficient Economic Breach

If it is essential to terminate your agreement early, you’re able to compensate the other party for such termination, and you’ll financially benefit after paying such compensation, it may make sense to walk away from the contract even if the other party wants to continue the relationship.

Be sure to discuss this option with an experienced business lawyer before taking any action because there are a variety of legal factors that must be taken into account when evaluating the true cost of a willful breach of contract.

Non-Disparagement

Regardless of the method you choose to terminate a contract early, it’s important not to publicly disparage each other as the relationship ends.

In addition to creating ill will and tarnishing your company’s reputation, disparaging the other party can lead to additional claims for damages in a civil lawsuit and increase the likelihood you’ll end up in court rather than walking away from the original deal amicably.