In simple terms, the provisions of an employment contract spell out the relationship between an employer and the employees. If you’re in a position where you need to write a first draft of an employment contract or edit an existing document, it’s a very good idea to do so under the guidance of an attorney who specializes in employment law. However, you can ensure you’re on the right track with your employment contract provisions if they answer some relevant questions.
What Must the Employees Do for the Employer, and What Do They Get in Return?
By addressing this question within an employment contract, you’re explicitly stating the responsibilities respective employees are obligated to fill if they want to keep their jobs, but also explaining what the employer will provide if the employees live up to their end of the bargain.
Generally, the employment contract should discuss an employee’s duties, and may even contain a full job description including the number of hours and number of working days. It should also talk about things such as commissions, expense reimbursements, wages, health insurance and retirement plans. That way, the employee who signs the contract knows what is expected and what he or she will receive in return for working at the company.
What Is the Nature of the Relationship, and Is This Partnership an Exclusive One?
This question should be answered with a sentence that explains whether the employee is working for the company on a full-time or part-time basis. Furthermore, the employment contract should state whether the employee is entering into an exclusive partnership. If so, he or she is not permitted to engage in other forms of employment (including means of self employment).
No matter what, the employment contract should not stipulate what an employee is permitted to do during his or her free time. The only exception would be if the worker were taking part in activities that may conflict with the employer’s business.
Are There Limitations on the Employee’s Ability to Seek Future Work?
One of the most common employment contract provisions is a non-compete clause. If one is included in the agreement, it usually stipulates that even after an employee leaves, he or she is not permitted to work in the same or a similar industry until a certain amount of time has passed.
Sometimes, the non-compete clause also extends to an employee’s part-time work that is performed separately from the employer associated with the contract. For example, if an employee works full time at a special events arena as a concert promoter and has signed a non-compete agreement, the language associated with it could dictate the person is not allowed to work part-time as a concert promoter for an independent band. Even though the employers are arguably different, the type of work is the same, meaning an element of competition might be created as a result.
Furthermore, the employment agreement may contain something called a non-solicitation clause. It says an employee cannot approach his or her colleagues or any of the employer’s customers for a certain amount of time after leaving the company.
You may find it necessary to include that clause in the employment contract if you’re worried about the possibility of a former employee trying to encourage his or her colleagues to leave your company and create a new business. It may also be a good idea to have such a clause if your company works with a lot of high-profile clients and you don’t want to give people access to those potentially valuable contacts.
Hopefully these questions have jumpstarted your thought process and helped remind you which provisions your employment contract should include. However, the information here won’t replace legal counsel, so be sure to get advice as you go.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.