3 provisions to include in your employee contract

On Behalf of | Apr 7, 2021 | business law | 0 comments

Employment contracts are an important part of bringing in members of your team. Not only does the contract solidify your employees’ salary and start date, but you can also protect your inventions and trade secrets.

The following provisions are items you may be able to include in your employment contract, subject to state law requirements and limitations.

1. Best-efforts provision

Many employers have dealt with an unmotivated employee at least once throughout the course of owning a business. A best-efforts provision holds employees accountable to always work to the best of their abilities while in the workplace.

2. Exclusive employment provision

According to FindLaw, another common provision in employment contracts includes an exclusive employment clause. Under this provision, your employee agrees that he or she will not work for a similar business at the same time as working with your business.

This type of provision is common for financial institutions or any other business where a conflict of interest would exist if two firms share one employee.

3. Noncompetition agreement

This particular provision states that your employee will not work for a competing firm within a certain amount of time after he or she quits working for you. Additionally, your employee agrees that he or she will not start a competing business within a certain amount of time following the ending of his or her employment. It may be a good idea to not only specify a reasonable time frame but also a geographic location if necessary.

It should be noted, however, that California law severely restricts the enforceability of non-competition clauses in employment contracts, and including an over-broad non-competition provision in a California employee’s employment contract may result in a lawsuit against the employer for engaging in unfair business practices.

Employment contract provisions are a great way to help protect yourself and your business in a variety of ways.