These terms and conditions may cover such areas as time period for employment, production incentives, and termination procedures. It is the terms and conditions of the contract that alter the at-will relationship between employer and employee. Under a contract, each party is obligated to follow the terms and conditions. Should one of the parties to the contract breach its terms, that party is subject to a lawsuit for breach of contract. Therefore, for example, if the contract stated that the employer could fire the employee only after placing the employee on probation for six months, and the employer fired the employee without doing this, the employer is subject to a lawsuit for breach of contract.
Some states consider employee handbooks the equivalent of employment contracts.
Courts in these states recognize employee handbooks as contracts for several reasons. One is that these courts feel that statements contained in the employee handbook are promises by the employer to the employee in return for the employee working for the employer. Therefore, in these jurisdictions, the at-will relationship is altered even if the employer did not intend to do so. The employer becomes legally obligated to follow the statements contained in its employee manuals. Therefore, if the employer fails to follow the statements contained therein, the employer could be liable for breach of contract suits by the employees.