Offer Letter or Employment Agreement?

You can turn any standard contract into a letter agreement by adjusting the opening and closing. (MSCD contains a chapter on letter agreements.) In what contexts might that make sense?

In particular, recently I’ve had occasion to read “offer letters” between a company and an employee. They’re letter agreements. More often than not, they use you and your for the employee.

The alternative is a standard employment agreement—with title, introductory clause, and so on—that uses the Employee or some other defined term to refer to the employee.

So, employment-law people, which do you prefer, and why?

Here’s a related question: It appears routine for companies to require that new employees sign both an offer letter and a separate confidentiality agreement. Why not combine them in one document?

[Updated 7:45 a.m. EDT, 1 Aug. 2016: Well, that was quick! The verdict is in: offer letters for at-will employees, contracts for everyone else. See this tweet, this tweet, this tweet. and this tweet. (Thanks, guys!) Presumably, for employees who aren’t at-will you could combine everything in one contract, but a company might find it easier to have all employees sign the same confidentiality agreement.]

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.