The employment relationship is, by its very nature, a contractual one. Even in the absence of a written contract between the employer and the employee, both are still bound by an oral agreement for at-will employment. Courts in most states, however, have carved out exceptions to the at-will doctrine.

For instance, courts have held that, under certain circumstances, offer letters, personnel policies, and other statements by employers can create implied contracts that alter the at-will nature of the employment relationship. In addition, where employees are represented by a union, the employment relationship is governed by a collective bargaining agreement.

When an employer does choose to enter into a formal contract with an employee, there are certain provisions that should be included to protect the employer's interests and ensure its enforceability.