Contract vs. Agreement: Why the Title Isn’t What Puts Schools at Risk

Independent schools often debate whether to call their faculty documents “contracts” or “employment agreements,” usually out of concern that the word contract implies job security in an at-will state. But here’s the key: the title doesn’t create legal risk, the language inside does.

If you are in an at-will employment state, meaning a school may terminate employment at any time, with or without cause, then unless the school accidentally makes promises that turn the relationship into a fixed-term or for-cause arrangement. This is where schools get into trouble, often without realizing they’ve wandered over the line.

The Phrases That Quietly Undo At-Will Employment

Certain types of language, sometimes just a single sentence, can override an at-will disclaimer and create a binding employment term. These are the phrases that most commonly cause problems for schools:

1. Fixed-term promises

Any wording that guarantees employment through a specific date can be interpreted as a term contract:

• “This contract is for the 2025–26 school year.”
• “Your employment begins August 1 and ends June 15.”
• “You will be employed through the end of the academic year.”
• “Your salary for the full year is $X.”

Courts may read these as commitments that prevent the school from ending employment early unless cause exists.

2. “For cause” termination language

Even when an at-will clause appears elsewhere, these phrases imply that the school’s authority to terminate is limited:

• “The School may terminate employment for cause, including…”
• “Termination may occur only for the following reasons…”
• “The School will dismiss employees only when there is cause.”

This language can convert an at-will relationship into a for-cause one regardless of the title at the top of the page.

3. Promises of job security or procedural guarantees

Well-intentioned statements in agreements or handbooks can become enforceable commitments:

• “Employees will receive warnings and opportunities to improve before termination.”
• “The School is committed to progressive discipline.”
• “Termination decisions will be fair and based on the following procedures…”

Unless explicitly disclaimed, these statements can limit the school’s flexibility.

4. “Binding for the year” implications

Variations of these phrases can suggest guaranteed employment:

• “This agreement guarantees your teaching position for the year.”
• “Your position is secured unless there is cause for dismissal.”
• “The faculty member agrees to serve for the entire contract year.”

One stray sentence can drown out an otherwise solid at-will clause.

5. Renewal language that sounds like a promise

Even subtle wording can be interpreted as guaranteeing future employment:

• “You will be reappointed if performance is satisfactory.”
• “Teachers in good standing are typically renewed.”
• “Your contract will be renewed barring unforeseen circumstances.”

Renewal expectations should never read like obligations.

6. Discipline steps described as mandatory

Stating specific steps can force the school to follow them precisely:

• “The School will provide a written warning before termination.”
• “Three incidents will result in dismissal.”
• “Employees will not be terminated without prior notice.”

If these steps are skipped, an employee may claim breach of contract.

7. Silence

When a document fails to clearly state at-will status, courts may interpret other provisions as creating employment guarantees.

What Schools Should Include Instead

To avoid unintended commitments, schools should rely on:

• A clear, unambiguous at-will statement, such as:
  “Employment with the School is at-will and may be terminated by either party at any time, with or without cause or notice.”
• A supremacy clause, clarifying that nothing else in the document or handbook modifies at-will status.
• Handbook disclaimers, making it clear policies are not contractual.
• Conditional compensation language, such as:
  “Your annualized compensation if employed for the full academic year will be…”
• CHECK YOUR LANGUAGE WITH A LAWYER!!!

These small but deliberate choices maintain the flexibility intended in an at-will environment.

Whether a school calls its document a contract or an employment agreement does not determine its legal effect. What matters, and what creates risk, is the presence or absence of language that implies job security, a guaranteed term, or limits on termination.

Careful drafting protects both the school and the clarity of the employment relationship, ensuring that well-meaning language doesn’t unintentionally create obligations no one intended.

***This article was composed with assistance from ChatGPT and edited by a non-lawyer human.