Employment & Consultant Agreements
An employment agreement is a written contract that governs the relationship between an employee and employer. While most employment relationships are at will without any written contract, it is often in the employer’s, as well as the employee’s, best interest to have a written contract establishing the terms, including rights to work-product, obligations for confidentiality, and terms governing whether the employee may solicit employer’s clients after termination of employment. Nearly all employers should consider requiring their employees to enter into a written contract. To speak with an attorney about sound employment contract practices, contact The Callan Law Firm, P.C. now. To learn more about employment and consultation contracts, read on.
What Terms are in an Employment Agreement?
In addition to defining crucial terms of the employment relationship, e.g. compensation and services to be performed, an employment agreement can address a number of other key provisions, including:
- how long employment will last
- job duties
- confidentiality regarding trade secrets and client lists
- grounds for termination
- covenants not to compete and solicit the employer’s clients
- ownership of work product
Why Sign a Contract?
Employment agreements are very prudent if an employer wishes to exercise authority over an employee’s capability to leave his or her employ. For example, high turn over can often lead to difficulties with replacing key employees. One way to decrease or mitigate turn over problems is to use an employment contract to require the employee to perform for a certain period of time, e.g. one year, or require the employee to give sufficient notice to hire and train an acceptable placement, e.g. sixty days. Although an employer cannot require someone to work against his will, an employer can collect damages if an employee breaches an agreement to work for a certain period of time.
Employment contracts are also a valuable tool to an employer providing employees access to confidential and sensitive information about the company and its clients. Employers can use confidentiality provisions which prohibit employees from using the information for private purposes or otherwise disclosing such protected information to third parties. Likewise, an employment agreement can protect an employer by prohibiting or restraining an employee from competing against his or her employee after leaving your company. Such contracts are subject to reasonableness requirements, so be sure to consult with an attorney to ensure the agreement will be enforceable in Virginia.
Why Not Sign a Contract?
Although employment contracts are generally used to protect the employer, an employment agreement can also afford a number of benefits to an employee, like providing long term stability, protected compensation and rights, and possibly the right to use one’s own work product going forward. Nonetheless, these benefits are often not much of a benefit given the loss in control an employee suffers as a result of an employment contract. For example, three months into employment an employee may decide his compensation is not sufficient, perhaps he has received a better offer. Had the employee not entered into a contract, he would be free to take the new opportunity and better compensation, but, under his agreement, he will be obliged by law to comply with the terms of the contract or pay the employer whatever damages he is entitled to under the agreement. The Callan Law Firm, P.C. prepares and negotiates employment agreements. If you are considering signing an agreement or would like to have an attorney review your current employment agreement, contact The Callan Law Firm, P.C. to explore your legal options.