What terms should be included in an employment contract?

On Behalf of Dunlap Fiore, LLC |

Companies in Louisiana need to take certain steps when hiring employees. Once a proper candidate is hired for a position, the appropriate paperwork needs to be filled out and the necessary documents need to be signed. While many employer-employee relationships include implied agreements, some positions lead to parties negotiating terms. Because of that, it is important to consider all the terms agreed to in an employment contract.

Depending on the career field and position, employees may want to limit an employer’s ability to terminate them or provide them the ability to leave at anytime. Therefore, termination and “at will” employment are frequently addressed in an employment contract.

Employee contracts might also provide for other terms and conditions, which are often part of the employee handbook or policies at the company. This often includes health benefits, vacation and sick leave, employee grievance procedures and employee behavior after termination of the employment relationship.

Certain provisions in an employment contract might provide benefits to the employee and employer, therefore, it is important to understand what is typical in an employment contract and what terms are frequently negotiated on agreed to. A confidentiality agreement, which means that an employee promises not to share any information about the details of the employer’s business or trade secrets, is often a beneficial term for employers to include in a contract.

Additionally, a noncompetition agreement clause ensures that an employee will not work for a rival company for a designated period of time once the employee stops working for the employer. This is also a very beneficial term for an employer; however, employees might argue about a time frame being unreasonably long.

Other terms frequently negotiated and agreed on in an employment contract include the ownership of inventions, best efforts, exclusive employment, no additional compensation, not authority to contract, termination, arbitration and choice of law. It is important that before any legal document is signed that the parties to the agreement agree to the terms. Failure to do so could result in a breach, disputes and possible employment litigation. Those dealing with this or other employment issues should take the time to understand the options available to them, ensuring their rights and interests are protected.

Source: Employment.findlaw.com, “Employment Contracts and Compensation Agreement,” accessed March 28, 2016