Need Help Writing or Upholding an Employment Contract?
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Generally, an employment agreement or contract is not necessary to hire someone to work for your business. Instead, many employees are â€śat-will,â€ť meaning that the employer can hire or fire the employee at any time and has no obligations to the employee beyond the requirements of state and federal laws. However, in some circumstances, taking the time to draft and sign an employment contract can protect your business and help you avoid costly disputes in the future. Certain employment agreements can protect privileged information concerning your company, for example. Additionally, an independent contractor agreement can specify the duration of a job and clarify other issues, such as reimbursement arrangements.
An employment contract lawyer from LAD Law Group can assist you in drafting an agreement that conforms to state and federal laws. We can review your business structure and advise you on whether a formal contract will help protect your company. Depending on the circumstances, you may require a contract for just a few specialized employees or a more generic contract for repeated use. We can also assist in drafting an employee handbook, which provides certain legal protections for your business as well.
What Are the Different Types of Employment Contracts and Agreements?
Depending on the needs of your business, an employment agreement can take many different forms and include a variety of clauses, including:
- Confidentiality agreements. This contract prohibits employees from sharing details about an employerâ€™s business. Depending on the type of company, a confidentiality clause may refer to inventions, processes, formulas, data or plans. Often, this type of employment agreement is binding even after a workerâ€™s employment ends.
- Non-compete agreements. In some cases, an employer can prohibit an employee from working for or starting a rival business. These agreements usually last for a certain period of time after the employee leaves the business.
- Ownership. If an employeeâ€™s job includes invention or design, then an employment contract may require that ownership of these works remains with the business, not the individual.
- Exclusive employment agreement. This prohibits employees from working for a similar business while employed by a certain company.
- No authority to contract. This kind of agreement explicitly states that the employee does not have the power to sign contracts on behalf of the business without the employerâ€™s consent.
- Termination clauses. Most agreements include a clause allowing the employer to terminate the employee for breach of contract and/or other stated reasons.
- Arbitration clauses. This kind of provision obligates employees to settle business disputes through arbitration, rather than litigation. An arbitration clause allows an employer to avoid costly lawsuits.
- Choice of law. Employment laws vary from state to state. Therefore, some employment contracts include an agreement on which stateâ€™s laws to use in the event of a dispute.
You may include these kinds of clauses in an employee handbook as well as an employment contract, depending on your business needs.
Is a Verbal Employment Contract Enforceable?
Generally, a verbal employment contract is legal and fully enforceable. One notable exception is a contract for a term exceeding one year, which must be in writing. However, most employers hire employees at-will with no provision for how long the worker will remain at a job.
However, an oral employment agreement may have drawbacks. If a business dispute arises, then you will have no written proof of the terms of your contract. You may be able to prove your claim in court, but litigation is costly and time-consuming. A written contract, on the other hand, can spare you these expenses. Additionally, spelling out the terms of an employment agreement can help you avoid misunderstandings with your new employees.
Learn More From Our Chicago Employment Contract Lawyer
Whether you are just starting a business, expanding an established brand or improving a current business model, the employment contracts you have with your workers are crucial. A Chicago contracts attorney can review your situation and advise you when a formal agreement is in your best interest.