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Implied Renewal of Employment Agreements

By Jeffrey S. Klein and Nicholas J. Pappas
February 28, 2006

Employers frequently enter into employment agreements with their employees for a fixed period of time at a stated annual salary. What happens if at the end of such an agreement's term both parties continue to perform under the expired employment agreement as if the agreement were still in effect?

Perhaps the parties have negotiated but not consummated an extension or new agreement. Under these circumstances, employers might think that, because the employment agreement has ex-pired, the employment relationship converts to “employment-at-will” and thus either the employer or the employee may terminate the relationship at any time for any lawful reason.

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