subject: Drafting A Comprehensive Employment Contract [print this page] A comprehensive employment contract works in two ways: it protects both the interests of employers and workers while underscoring the terms of employment for both parties.
While an oral employment agreement is recognized by law, it is better to draft a written contract to make this more legally enforceable and prevent vague provisions which are usually the cause of lawsuits.
BASIC ENTRIES FOUND IN EMPLOYMENT CONTRACT
Duration of the employment
The duties and obligations of workers
Workers salary
Grounds for termination
Disciplinary action
Benefits such as vacation and medical leave, employer-sponsored insurance, etc.
Alternative methods to resolve a dispute to avoid lawsuits
AT-WILL AGREEMENT
Most US companies follow at-will agreement, an employment arrangement which allows workers to quit any time they want and affirms the employers right to fire at will. However, employers may face lawsuits if the termination is based on discrimination or it has violated the public policy (e.g. the rights of workers to practice their civil rights such as filing a lawsuit against their employers, serving in a jury, or filing a workers compensation).
To make at-will legally enforceable, most employers require workers to sign a written contract stating that they agree to such arrangement.
CONFIDENTIALITY AGREEMENT
If a worker has an access to trade secrets and other sensitive information, it is ideal that they should sign a confidentiality agreement that will prohibit them to disclose trade secrets to any person and business entity.
With this agreement, the receiving party is also required to protect trade secrets and sensitive data from anyone who might obtain these in an illicit way.
According to employment lawyers, this contract, which protects software design, secret formula, and business method, is very common in the technology industry.
Usually, a confidentiality agreement includes five entries: 1.) Definition of confidential data, 2.) Obligations and duties of the receiving party, 3.) Information and data which are not included in the contract, 4.) Length of time, and 5.) Miscellaneous provisions.
NON-COMPETE AGREEMENT
Just like in confidentiality agreement, a non-compete contract is only ideal to workers who have access to trade secrets and other sensitive information.
This contract prohibits workers to seek employment to their employers rival companies for a certain period of time. With this restriction, employers can protect their trade secrets and inventions.
Employers should realize that a non-compete agreement is a way to protect their trade secrets; not to punish employees who want to seek other employment.
In drafting a non-compete agreement, make sure this will not restrict employees to seek other work for a long period of time. Also, the contract should only cover a limited area.
