It many situations, a business may need to potential employees to sign an employment contract prior to them working in a position with the company. This contract is important for both parties. It will establish the terms and conditions as well as restrictions of the working relationship. A potential employee may see an employment contract as a way to protect their rights and the company’s obligations toward them. A company may believe such a contract identifies their expectations of the employee. When an employment contract has been properly written, it will define the company and employee’s working relationship.
Non-Competition in an Employment Contract
This is a standard clause in an employment contract template designed to prohibit a worker from being employed by a company’s direct competitor during as well as after their professional relationship is over. This clause is usually written to cover a specific amount of time after the employee has left the company. Before this clause can be enforced specific requirements must be met. The clause could specify a specific geographic location and more.
Confidentiality in an Employment Contract
The goal of this is to maintain the information provided to the employee for their work as private and confidential. It prohibits a current or former employee from discussing or utilizing any company secrets. This could involve product specifications, marketing plans, real estate plans and more. The only way this information could be disclosed is with a company’s permission. A confidentiality clause can be in effect indefinitely.
Non-Solicitation in an Employment Contract
This is a clause intended to prevent an employee from influencing clients or customers as well as other employees from leaving the company for another business or service provider. This must be in place for a predetermined amount of time. It is usually also in place after an employee leaves the company.
Validity of an Employment Contract
An employment contract in many ways is like any commercial contract. It is not valid simply because two parties have given their oral or written agreement to it. There are conditions that must be met for an employment contract to be valid as well as enforceable. There must have been an offer and acceptance between the two parties. There must be something of value for each party presented prior to entering into the contract. This is known as consideration. The terms and conditions of the contract can’t involve anything illegal or unconscionable.
Probationary Period in an Employment Contract
This is a common clause in most employment contracts. It states that an employee could be on a probationary period for up to three months or longer. During this time, the employer will determine if the employee will be a good fit for the company’s operation. An employer will reserve the right to end the working relationship with the employee at any time during this period. The termination can take place with or without cause or requirement to provide notice. After the probationary period, the employee will normally qualify to receive the benefits offered by the company.
Evolving Document Nature
It is common for an employment contract to be signed at the beginning of the relationship between the company and the worker. It is also possible to have the employment contract updated and modified as the working relationship progresses. A company may assign the employee to a new part of the company; there could be new responsibilities as well as new pay and more. Employment contract changes could be agreed upon by the employee as well as the company after a period of negotiation.
Benefit in an Employment Contract
An employment contract can benefit the employee as well as the employer. An employee will know what to expect during their term of employment. Their employer won’t be able to surprise them with something not in the contract. A company will be able to protect all aspects of its operation. It will be able to eliminate a potential employee who isn’t suitable and retain an employee who does the work as the company needs.