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Implied employment contract in New Mexico.

Written by Mr. Roger Davie on Monday, 09 Jul 2018.

New Mexico follows the at-will employment doctrine that states that absent a contract, your employer can fire you for any reason that is not an illegal reason or against public policy.  The key words here is "absent a contract" because under New Mexico law your employer can easily create an implied contract.  An implied contract is one that implied by the situation.  One of the easiest ways for an employer to create an implied contract is in the employee handbook.  If the handbook guarantees certain rights to the employees then that is a contract and the employer is bound.  One of the most common ways employers create an implied contract in a handbook is where they guarantee progressive discipline.  This use to happen much more in the past, but most companies have enough wiggle room in their handbooks that they don't get caught up in an implied contract.  For example the contract may say we can don't have to use progressive discipline.  But you still find handbooks around that do create implied contracts.  Also in emails sent to employees the employer can create an implied contract.  I see them a lot in performance improvement plans (PIP).  Many times those will guarantee the employee won't be fired if they meet certain goals.  However the most common way that an employer creates an implied contract is with guarantees of future employment done verbally.  A fact-finder must examine the totality of circumstances surrounding the employment relationship when considering whether an employer made a promise modifying the employment relationship.  Lopez, 1998-NMCA-016, ¶ 12, 124 N.M. 539, 953 P.2d 304.   An implied contract may be found in written or oral representations, in the conduct of the parties, or in a combination of representations and conduct.  Newberry v. Allied Stores, Inc., 108 N.M. 424, 427-28, 773 P.2d 1231, 1234-35 (1989).   To support the existence of an implied contract, an oral representation must be sufficiently explicit and definite.  Garrity v. Overland Sheepskin Co. of Taos, 1996-NMSC-032, ¶ 12, 121 N.M. 710, 917 P.2d 1382.   A factual showing of additional consideration or mutual assent to the terms of the implied contract is not required.  Hartbarger, 115 N.M. at 670-71, 857 P.2d at 781-82.

Of course it is difficult to prove up an oral contract so it is best to have witnesses and even better to have an email confirmation.  

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