Implied Contract Exception Law and Legal Definition

Implied contract exception is an exception available in at-will employment. Under the implied contract exception, an employer may not fire an employee in a situation where an implied contract has formed between an employer and employee. A written instrument expressing the employment relationship will not exist. Therefore, it is difficult to prove the terms of an implied contract and the burden of proof is on the discharged employee. Implied employment contracts are commonly seen when an employer's personnel policies or handbooks states that an employee will not be fired except for good cause or it lays out a process for firing. If the employer fires the employee in violation of an implied employment contract, the employer may be found liable for breach of contract.