Can your Employment Contract be changed after it’s signed?

You’ve finally finished negotiating that job offer, both sides have signed, and it’s written into stone! Or is it? This week we cover how employment contracts can be modified after signing and cases where doing so would be illegal. We recommend reviewing our previous post on At-Will Employment, as the topics are closely related.

Can your Employer change your contract without notice or your consent?

In literal terms, it cannot. In practical terms, it absolutely can. Let’s explain why. It’s common for employment contracts to contain a sentence such as:

“This agreement may not be amended or modified, except by written agreement signed by both you and the Company.”

In other words, if your company were to do away with entire sections of their contract, they’d have to provide an updated contract with those section removed that you’d both have to sign.

For practical purposes, however, it’s also common for these contracts to have significant wiggle room and the need to sign a new contract to be rare. In the case of At-Will employment (which is some 74% of US workers and the default in all US states but Montana), your job title, pay, work schedule, location, non-exempt status, benefits, duties, and more can all be changed at any time with no notice or your consent. You’ll find language listing those items ending with “…may change from time to time” in the “At-Will” or “Employment Relationship” section.

Even in cases that aren’t At-Will, your contract may still include broad language on your role to minimize the need for employers to modify the contract. Legislation is currently limited in protecting for such changes, with Oregon being one of the few states requiring a 14-day notice period for shift changes in specific cases like large retailers.

Returning to the first case, what about cases where a new law is passed (e.g. banning non-competes, including existing ones) and portions of the agreement are now illegal? That’s where the Severability clause kicks in (covered in our post on Miscellaneous Clauses), and unenforceable clauses get ‘severed’ while the rest of the agreement is still in effect.

Can you change your contract without notice or your Employer’s consent?

The answer is expectedly no. In the case of At-Will employment, the majority of practical changes will go through your leadership’s approval. As long as the company agrees, there doesn’t necessarily have to be a new contract drafted and signed. In the general case where you are requesting a material change to the contract, you and your company must sign a formal updated contract.

When is it illegal for your Employer to modify your contract?

Similar to the litmus test of At-Will employment, your employer still cannot engage in unlawful workplace practices. Forcing a change in working hours for a protected status such as pregnancy is discrimination, demoting someone after they filed a workplace complaint is retaliation, and removing the benefits of safety equipment on a job site is creating an unsafe work environment. These changes are all illegal, whether it’s done via a written contract or just an update to general company policy.

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The industry standard appears to be broad freedom by the employer to change things, and little recourse on the employee’s end except to leave. However, we should end on the positive note that most employers refrain from significant changes as it doesn’t create a stable environment for productive output. It often takes extenuating circumstances such as a nosedive in company financials or the COVID-19 pandemic for companies to enact major changes. At the end of the day, there’s a legal contract, but there is also a social contract.

For advocacy and beyond,
The Ask Ginkgo Team