What You Need to Know About Offer Letters

In Connecticut, an employment relationship is “at will,” unless governed by a contract. Employment at will grants both parties the right to terminate the relationship for any reason or no reason, at any time. But what about employment pursuant to an offer letter?  Here are a few things you need to know about an offer letter and its terms.

(1)        At-Will Employees:  Most employees are “at-will” employees and an offer letter will most likely confirm that the employment is “at-will.” When an offer letter states that employment will be “at-will” it means that the employer or employee may terminate the employment for a good reason, a bad reason, or for no reason at all, at any time.  In a 2006 case, Petitte v. DSL.net, Inc., the Superior Court held that the employer could terminate an “at-will” employee, in which it offered employment pursuant to an offer letter, prior to the commencement of the employee’s duties.  2006 Conn. Super. LEXIS 915, J.D. of New Haven, Docket. No. CV-04-0489777-S (2006).

(2)        Position and Duties:  When reviewing or drafting an offer letter, you want to make sure that the employer stated the initial position the employee is being hired for and what duties or responsibilities are included as part of that position.  This way, everyone will have a better understanding of what is expected from the employee.  A well-drafted offer letter will often include a reservation of rights for the employer that could include a clause that allows for a change in position, assignment of additional duties and/or the elimination of duties.

(3)        Compensation: An offer letter should set forth clearly what the base salary is and how that base salary will be paid. For example, is it to be paid out weekly, bi-weekly, or annually? More importantly, any bonus or compensation should be clearly defined as well, including how and when such bonus or commission will be paid.  Generally, in a skillfully drawn up offer letter, there will be a clause reserving the employer’s rights to alter or rescind these arrangements. If the bonus or commission structure is highly complex, an employment agreement or schedule to the offer letter should be considered.

(4)        Benefits:  As an employee, you would want your employer to outline the specific benefits you are expected to receive, including vacation, sick days, personal days, health benefits, pension benefits, 401(k) plans (or the similar), and any other comparable matters.  Generally, the employer will reserve the right to rescind or alter these benefits, in accordance with the corresponding plan.  An employer must provide notice to the employee if it makes any changes to these benefits. Conn. Gen. Stat. §31-71f.

(5)        Restrictive Covenants:  An offer letter will generally not include non-solicitation clauses or non-compete clauses.  However, an offer letter can condition employment upon the signing of these documents at commencement of employment. What is generally found in offer letters are confidentiality clauses and non-disclosure clauses.  By signing the offer letter, the employee (depending on the clause) may agree to refrain from disclosure of certain information, such as salary or client lists. Moreover, the employee may be requested to affirmatively acknowledge that he or she is not currently subject to any restrictive covenants, such as a non-compete clause.

(6)        Conditions of Employment:  While in most circumstances, the employment is “at-will,” the employer can still make the offer of employment contingent of other items, such as satisfactory references, drug screening, background check, valid driver’s license, or proof of authorization.

As with any employment related document, complex issues can arise.  Careful drafting and review is necessary to protect the interests of the employee and employer.   If you have any questions relating to any offer letter or employment agreement, please contact Joseph C. Maya, Esq. by phone at (203) 221-3100 or via e-mail at JMaya@Mayalaw.com

 

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