Posted by callgentry |
An employment contract is a foundational document for the employer-employee relationship. There are many advantages to using a contract. For employers, a contract will clearly spell out employee obligations and expectations. It should also protect trade secrets and proprietary information, like customer lists.
Employees also benefit from employment contracts, which typically guarantee employment for a certain amount of time at a certain salary. These agreements also identify the reasons the employee can be fired or disciplined.
Despite the importance of these contracts, many employers scrape fill-in-the-blank templates from the web to use as their own. There are risks to both employers and employees when doing this. Our Jefferson City business lawyers at Call & Gentry highlight some of the most significant in this article.
Creating an Over Broad Non-Compete Agreement
Many employment contracts contain provisions like non-compete clauses which limit the ability of employees to work for a competitor after leaving employment. Unfortunately, Missouri doesn’t automatically enforce all non-compete agreements. Under Missouri Revised Statutes § 431.202, a non-compete clause is enforceable if “reasonable” and only to protect certain interests. For some workers, a clause like this is valid for a maximum of one year.
There are risks of creating an agreement that is too broad. For the employer, you will have no protection if the judge redlines the aggressive noncompete clause. Had you worked with an attorney, you could have drafted one that would have stood up in court and provided maximum protection to your interests.
For the employee, you might need to litigate to get out of an overbroad noncompete, which costs you time and money. There is also a risk that a judge might give the green light to a broad covenant when your attorney could have negotiated something narrower.
Leaving Out Necessary Information
A good employment contract prevents disagreements. There should be no question about an employee’s rights to things like time off, holiday pay, overtime pay, and other issues. There should also be no question as to when an employer can discipline an employee, terminate them, or demote them.
Unfortunately, do-it-yourself employment contracts sometimes are missing key elements. Online versions are rarely specific to your industry or tailored to the needs of a business your size. Consequently, employment disputes actually increase, and costly litigation can ensure. Work with an attorney to ensure you cover all your bases in an employment contract.
Inadvertently Converting an Independent Contractor to an Employee
Many businesses like to use a contract with their independent contractors. However, a poorly drafted contract could convert this contractor to an employee. Consequently, an employer could assume legal liability for the contractor’s conduct and might owe more in taxes, as well as workers’ compensation premiums.
An attorney can ensure that your contract clarifies the contractor’s role. In fact, a well-drafted contract is a powerful piece of evidence should the state allege that you are misclassifying employees.
Speak with Our Attorneys Today
Call & Gentry Law has deep experience in employment contracts and can review yours or draft one from scratch. Contact us to schedule a meeting.