Things to Consider when Drafting Employment Contract Provisions
Feb. 2, 2021
As workplaces become increasingly specialized and more states are moving to “at-will” employment, employers and employees are commonly using employment contracts to give both some semblance of stability. While these can be oral, the usual course of action is to have a written employment contract. However, there are provisions that should be considered.
Of course, all employment contracts should include the basics. These include the employees benefits, start date (and end date, if applicable) and salary, including any bonus structure.
This provision details how business is conducted and protects the employer’s trade secrets, intellectual property, etc. These should be part of most, if not all, employment contracts, and they often last for longer than the employee’s period of employment.
Recently, “non-compete” provisions have been hotly litigated, so if an employer wants to put this provision into an employment contract, they should do so only after they consult with an attorney. Essentially, though, these clauses state that for a specified period, the employee cannot work for a rival company, engage in a similar business or start their own company to compete. These are usually geographically limited, but again, consult an attorney.
While we may only think about invention ownership issues arising from developers, researchers, scientists, etc., it could come up in any work environment. Perhaps, an employee creates a specialized spreadsheet, workflow process, training manual, etc. These provisions ensure that the company owns these inventions.
We all expect our employees to work hard, but this provision puts it in writing. Essentially, it says that an employee will work to the best of their ability and be loyal to their employer.
For Houston, Texas, employers and employees, employment contracts can be a good way to make sure both parties are on the same page. However, both should contact an attorney before drafting or entering one to ensure it actually does what both parties want.