An employment agreement can consist of whatever terms and information the parties of the agreement choose to include. However, there are at least a few things which every employment agreement should include: start date, compensation (including bonuses), work schedule, and benefits (i.e. vacation and holidays, sick time, etc.). This makes intuitive sense, because they are all basic conditions of employment. Beyond these essential things, there are a few additional items which commonly appear in most employment agreements.
These additional items, described below, tend to be a bit more complex so this is where the counsel of an experienced lawyer comes into play. A qualified business and employment lawyer can assist you as you draft and execute the complex items of your employment agreement. And this assistance can be critical to ensure an optimal final agreement.
A big concern of most employers is the protection of certain proprietary information, trade secrets, internal processes and procedures, and so forth. Given this reality, most employment agreements will include clauses pertaining to the necessity of keeping this information confidential. However, you should be aware of the limitations of such clauses; for instance, information which isn’t sufficiently private or unique may not fall under the protection of such clauses.
Another common item of employment agreements is conditions or terms of termination. Although an employment agreement may remove an employee’s otherwise default “at will” status, this doesn’t mean that termination is impossible. Keeping track of potential violations, poor performance, or other potentially-fireable offenses can help protect yourself and your business. Or, you may develop a fixed time of employment for your employees, so their employment may automatically expire after a certain period. If you have a concern about stable and consistent employees, you should be particularly mindful of how this section of your agreement is crafted.
Another item commonly found within employment agreements is the venue selection for any potential litigation. The agreement will likely contain a section on the location where any future lawsuits will be held. An experienced lawyer can help you understand the implications of this type of section. What’s more, non-compete clauses are also very common in employment agreements. These clauses can insist that former employees be unable to either start their own company in the same industry or work for a competitor within a certain period of time. While these clauses may be enforceable in many cases, they can be overly harsh or severe, and in certain cases may be unenforceable. This clause will be impacted by the governing law provision of the contract and it may be different than the state selected in the venue clause. You need the expertise of a lawyer to fully understand these clauses and the implications they present for you and your employees.