Employment Contracts

Employment Contract

An employment agreement specifies the responsibilities and duties expected of the employee, as well as the benefits to which he is entitled. The agreement ensures that the employee knows what is expected of him in the organization and the terms of his employment.

At the very least, the employment agreement should include the following:

• The identities of the parties involved (i.e. names, postal addresses, etc.),
• The employee’s starting date,
• The title and description of the job,
• The location where the employee will work, and, if applicable, the employer’s right to transfer him to another location for whatever reason,
• The hours of work, although the employer cannot require in the contract that the employee work beyond the legal maximum,
• The probationary period, during which the employer may ask the employee to leave if his performance is not satisfactory,
• The employee’s gross salary, relevant deductions, insurance options and the actual dates/ terms of payment,
• The number of holidays that the company offers in a year, as well as the methods of reimbursement and related affairs,
• The permissible expenses while on duty,
• The employer’s sickness/ disability policies, notice periods, etc.,
• The restrictive terms of employment (see below), and
• The manner in which any disputes that arise out of the employment will be settled. You might require your employee to agree to submit such disputes to an arbitration panel to avoid being hauled into court. If your business operates inter-state or multi-nationally, you might also specify the law under such disputes are to be settled and designate how court costs/ attorney’s fees are to be handled if arbitration is unsuccessful.

The restrictive terms of employment are crucial to the employment agreement, and may be the only way to protect your intellectual property, work product, etc. against disclosure or misuse if an employee ceases to work for you. The most important of such restrictive terms is the non-compete clause, in which an employee pledges that for a given period (usually 12 or 24 months) after the termination of employment, regardless of whether someone is fired or quits, the employee will not directly or indirectly affiliate with any business or engage in any activity that might compete with your business in the county or geographical area in which your business operates. It is essential that this clause is drafted clearly, comprehensively and within the bounds of your jurisdiction’s law; if it is too narrow, you will not be adequately protected, and if it is too broad, it will not be enforceable in a court of law.

You should note that in some cases, it is especially difficult, if not illegal as against the public interest, to limit your former employees to completely refrain from practicing their profession. You should thus always include in your employment agreement a clause that protects the confidential knowledge your employee may have gained in the course of his employment (i.e. customer/ client information, trade secrets, certain practices that are exclusive to your business and other such “insider” or non-public information that an individual can only learn as an employee). You should also insert into your employment agreement a provision that requires your employee to refrain from soliciting your customers or prospective customers (and define who constitutes a prospective customer), or your other employees, such as if he starts his own business and recruits some of your staff.

Contact an Experienced Business Law Attorney

If you would like more information about this topic, contact Lawrence Tolchinsky to find out how he can help you. You can contact him by phone at 954-458-8655 or by e-mail through this web site to schedule an appointment and learn more about title insurance. He offers a free initial consultation.

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