Puerto Rico: Contracts of employment

Original authors: Shiara Diloné-Fernández, Elizabeth Pérez-Lleras, Littler.

Updating authors: Nydin M Watlington-Castro and Wilfred Soto-Suárez, TCM

Summary

• A written employment contract is not required for an employer-employee relationship to arise, but non-compete and similar clauses must be in writing. (See General)
• Probationary periods are automatically incorporated in employment contracts and an employer may terminate an employee's employment without "just cause" (except for discriminatory reasons) during this period. (See Probationary periods)
• Employment contracts may be concluded for an indefinite duration or for a fixed term if they are made in connection with a specific term or project. (See Types of contract)
• In private-sector employment, even though employers have no legal obligation to state the general terms and conditions of employment in writing, it is a recommended practice to have them in writing. Employers should often set out many key terms in an employee handbook or code of conduct, which is considered to be a contract between the employer and employee. (See Written statement of terms of employment)
• Employers are generally free to modify employees' terms and conditions of employment, unless this is prohibited by the employment contract or the modification is for reasons that are prohibited by law. (See Variation of contract)
• For a non-compete clause to be valid, it must comply with certain requirements, for example with regard to the employer's legitimate interest in the clause, the scope and duration of the restrictions on the employee, and the consideration offered to the employee in exchange. (See Non-compete clauses)