Terminating an employee may violate an implied agreement if
Multiple Choice
a) the employee agrees to do something illegal, unethical, or unsafe.
b) the action is inconsistent with company policies.
c) the employer had not promised the employee job security.
d) the employee refuses to do something that the law requires.
e) the employee is treated consistently.
The Correct Answer and Explanation is:
Correct Answer: b) the action is inconsistent with company policies.
Explanation:
In employment law, an implied agreement (or implied contract) refers to an understanding that is not formally written but is inferred from actions, conduct, or statements made by the employer and employee. Although many employees are considered “at-will” (meaning they can be fired at any time for almost any reason), courts have recognized that certain behaviors and policies can create implied contracts, which limit an employer’s ability to terminate without cause.
One of the key ways that an implied contract can arise is through company policies, especially those outlined in employee handbooks, training materials, or standard practices. If a company has established termination procedures or disciplinary steps (such as verbal warnings, written notices, or performance improvement plans), employees might reasonably expect that these steps will be followed before termination. Firing someone without adhering to those policies can violate the implied agreement.
For example, if an employee handbook states that employees will only be terminated for just cause and after a certain disciplinary process, failing to follow this process before termination may be seen as a breach of an implied contract. Courts may view this inconsistency as wrongful termination, especially if the employee relied on those stated policies as a condition of their continued employment.
Other answer choices do not directly reflect the concept of an implied agreement:
- a) refers to illegal or unsafe acts — not about implied agreements.
- c) if the employer has not promised job security, then there’s no implied agreement.
- d) refusal to do something required by law would typically protect the employee under public policy, not under implied contract.
- e) consistent treatment supports fairness but does not establish or violate an implied agreement.
Therefore, the best answer is b) — violating company policies may breach an implied agreement and lead to claims of wrongful termination.