The CEO of a client with a half-dozen employees recently asked, “We are about to start hiring again. I would like to add language regarding a 90 day probationary period. Is this a good idea?” My answer was “No.” Here’s why.
I had prepared a form of employment offer letter and an employee handbook for the client. Both of these documents state that employment is at-will. This means that either party may terminate the employment relationship at any time for any (non-discriminatory) reason or for no reason. As a result, at-will employment, by itself, allows a company to terminate the employment of an individual whose performance is inadequate during the first 90 days. A probationary period is not necessary.
Even worse, if language describing the probationary period is not drafted correctly, or if procedures are not followed appropriately, undesirable consequences can follow. A probationary period can become a guaranteed-employment period. Even worse, successful completion of the probationary period can lead to an implied contract for employment thereafter.
In summary, there is nothing to gain, and potentially a substantial amount to lose, with a probationary period.
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Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
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