Although disputes frequently arise regarding the existence and validity of oral contracts, they are generally enforceable in Arizona. In certain situations, however, contracts must be written to be enforceable. One of these situations is a contract for employment.
Arizona Revised Statute Section 23-1501 explicitly recognizes that the employment relationship is contractual in nature, but further provides that either the employee or the employer may sever the employment relationship, at their whim or pleasure, unless there is a written and signed contract between the parties stating that the employment relationship will remain in effect for a specified duration, or otherwise restricting the termination rights of either party.
The statute is clear that both the employee and the employer must sign this written contract, or, alternatively, the written contract must be expressly stated in an employment handbook, manual or similar corporate document that is provided to the employee. To be enforced as an employment contract, that document must clearly express the intent that it is a contract of employment, and not disclaim such fact, or must be set forth in a writing actually signed by the party to be charged. Unlike in many contract relationships requiring a written contract pursuant to the Statute of Frauds, Section 23-1501 further states that partial performance is not sufficient to eliminate the requirements of a written contract.
The legal effect of this statute is that, contrary to the understanding of many Arizona employees, they may be fired at any time absent some written agreement to the contrary. This general rule, however, is subject to various provisions of Arizona state law and federal law that preclude retaliatory firing in certain situations as well as discrimination against certain classes of protected individuals.
Because these legal principles are complex, if you feel that you have been terminated in violation of a written agreement or that your termination was a retaliatory or discriminatory act, you should quickly seek the counsel of an experienced Arizona employment attorney.