Employment Contracts: To Renew or Not to Renew? That is the question

As the year comes to a close, many employers focus on budgets, bonuses, and performance reviews, but one overlooked task can create major legal and financial risk: employment contract renewals. In this episode, based on the alert written by Anthony M. Rainone, Esq. and Katelyn A. Marquez, Esq., Brach Eichler’s Labor & Employment team breaks down why unclear or auto-renewing agreements can lead to unexpected multi-year commitments, disputes, or obligations that no longer fit your organization’s needs.

We’ll cover the key clauses every employer should review before year-end, how courts treat silent or expired agreements, and practical steps to avoid unwanted renewals in 2026.

📲 Read the alert now at https://www.bracheichler.com/insights/employment-contracts-to-renew-or-not-to-renew-that-is-the-question/

For questions about employment contracts or renewal issues, contact: 📞 Anthony M. Rainone, Esq. – 973.364.8372 | [e-mail]

*This is intended to provide general information, not legal advice. Please contact Anthony if you need specific legal advice.

Episode Transcript

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Thank you for tuning in to the Brach Eichler Talks

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podcast, where we explore and discuss today's trending legal topics.
In this episode, we'll discuss a recent Labor and Employment Law Alert
titled, "Employment contracts, to renew or not to renew?
That is the question." As 2025 winds down and employers get caught up in the annual commotion of
budgets, bonuses, and performance reviews, there's one task that shouldn't slip under the

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radar, reviewing employee contracts before they quietly renew themselves.
Each state has its own laws, case law, or statutory on
this issue, the ignorance of which will not help the employer.
For example, employment agreements may have an expiration or renewal with less than clear or
nonexistent language or without built in safeguards to prevent

(00:51):
unwanted extensions, which can cause an employer legal headaches.
Some courts have held that when a fixed term employment agreement expires and does not address
renewal, but both sides continue working as if the contract is still in place, there's a legal
presumption that the parties have agreed to a new contract on the same terms as the old one.

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This can happen without a signature, email, or explicit agreement.
In other words, silence plus continued work can equal renewal in some courts.
For HR teams, this can present unpleasant surprises come January 1, such as multiyear
commitments, locked in terms that no longer fit the needs of the company, or the missed
opportunity to restructure roles.

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On the legal side, these unintended consequences can become the
sparks that ignite contentious and costly disputes.
The good news is employers can help fireproof their operations with a
proactive review of employment agreements before year end.
Before the new year, take a close look at two key areas in your written employment agreements.
One, the contract's duration and expiration provisions, if

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any, and two, any language that addresses renewal.
If language is unclear, vague, or otherwise open to interpretation on the term and what
happens at the end of it, is time to take action and clear it up by way of amendment or new
agreement… Have well defined language in an employment

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contract regarding the end of its term and what happens at the end of the term.
If you intend for renewals, creating a specific predictable renewal process with defined steps
and timing can help keep everyone on the same page and reduces
the likelihood of undesired assumptions regarding renewal.
Auto renewals or ambiguous renewal language are easy areas to overlook, but these issues can

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carry real legal and financial consequences for employers.
A surprise renewal can complicate business operations and workforce planning or spark disputes
that could have been prevented with clearer, well defined contract language.
For more information about employment contracts, please contact Anthony M.
Rainone, Esq., Member and Co-Chair, Labor and Employment Practice at

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973-364-8372 or [e-mail].
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For more information and resources, visit Brach eichler dot com.
This is intended to provide general information, not legal advice.

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Please contact the authors if you need specific legal advice.
Brach Eichler LLC is a full service law firm based in Roseland, New Jersey with over eighty attorneys.

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