Finally, a few states recognize an implied contract of employment where an employer has engaged in a "course of dealing" over a period of years, for example, by keeping employees on as long as they maintained certain standards of performance.  As a result, an employee may claim that he or she may not be fired as long as he or she continues to meet those standards.

Employment Contracts: Other Considerations

Employment contracts, whether written or implied from employee handbooks or policies, may also provide the terms and conditions of:

• Health benefits;

• Vacation and sick leave;

• Employee grievance procedures;

• Employee behavior after termination of the employment relationship

In terms of governing an employee's behavior after employment has ended, employment contracts can limit the ways in which an employee may use confidential or proprietary employer information, or restrict the employee's right to compete with the employer. Such non-competition agreements are particularly difficult to enforce, however, and many states have enacted statutes specifically limiting their effectiveness.  In general, the scope of such an agreement, whether the geographic area covered or the length of time that it lasts, must be no broader than necessary to protect the employer's business.  In addition, while a covenant not to compete may typically be imposed on a new employee as a condition of employment, if it is imposed on an existing employee it must be supported by some independent consideration beyond a simple promise of continued employment, such as a raise, a bonus payment, or improved commission terms.