California Employment Agreement Attorney
What is a California Employer Agreement?
When a company hires a new employee, the company may wish to have a written agreement between the company and the employee. An employment agreement establishes and protects the employer-employee relationship. An employment agreement is a way to incentivize a talented employee to work for a company, and it can also protect the employer from theft of confidential information.
A typical employment agreement will contain provisions on the employee salary, work schedule, vacation, benefits, and the duration of the employment (e.g. one-year contract). An employment agreement will usually outline the basic job responsibilities. Most employment agreements also have a provision regarding employee communication, which includes rules on social media and email use.
The Benefits of an Employment Agreement
An important provision for a company in the employment agreement is a confidentiality clause, stating that the employee will not disclose confidential information, business strategies, and trade secrets. A company can use a separate nondisclosure agreement, but many companies put this provision in the employment agreement. Many agreements also include a provision that states any intellectual property, such as patents and copyrights, created as part of their job duties belongs to the company and not the employee. Some companies will include a non-compete clause, that prohibits the employee from taking a job that directly competes with the company after leaving. Non-compete clauses must have an end date to be enforceable, and many will have a geographic restriction. State laws vary on the rules and enforceability of non-compete clauses. Some states, like California, frown on non-compete clauses. Similar to non-compete, an agreement may contain a non-solicitation clause, meaning that the employee cannot take the clients of their employer if they leave the company. A non-solicitation clause must also have an end date.
While an employment agreement contains many provisions to protect the employer, it will usually contain provisions that incentivize the employee. The default rule is that employment is “at-will,” meaning an employer can fire an employee at any time for any reason except for specific reasons prohibited by law, such as pregnancy. Many employment agreements outline the specific instances when an employee can be fired, meaning the employee can only be fired for cause. This gives an employee a sense of job security, and can attract a talented employee.
Why You Should Create an Employment Agreement
Employment agreements are not generally need for hourly employees, or employees in positions such as a receptionist. For positions like these, the terms of employment are usually covered under an employee handbook and a verbal agreement. An employer should set up an employment agreement with a new hire if the employee will be privy to confidential information, will be creating intellectual property, or the company is investing a lot of resources in professional development and training. Employment agreements ensure that talented employees are bound by contract, and the agreement makes it harder for them to leave. The downside of an employment agreement is that it may make it more difficult to get rid of an employee if the employee is not working out.
Contact San Diego Esquire for more information about how we can create an employment agreement for your business. We provide flat fee employment agreement drafting services to California businesses. Review our California Contract Drafting, Review & Amendment Service for more information.