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Creating the right employment contract for your business

Jul 2, 2021 | Business Law And Litigation

Without certain protections in place, your company may face certain types of legal and financial risks. It is prudent to avoid conflict and disputes whenever possible, and one way to do this is to have strong employment contracts in place. These are legal agreements between employers and employees that outline the right and responsibilities of both sides, reducing the chance of confusion and complications. 

While there are a few elements that should be in every type of employment contract, what should be in your company’s contracts depends on various factors. You can custom-tailor your agreements to the type of work you do, the role of the specific employee and much more. By failing to employ these types of contracts in your business, you could be exposing yourself to potentially costly litigation. 

Important terms and considerations 

There are situations in which it is not necessary to have extremely detailed employment contracts, but there are certain factors you would be wise to consider regardless of the type of business or role of the employee. These include: 

  • Duration of employment 
  • Expectations for pay and pay increases 
  • Procedures employees follow in case of grievances  
  • Health care coverage and other benefits 
  • Grounds for termination  

Depending on the type of work an employee will be doing, discretion may be important. If one of your main concerns is protecting proprietary information, you may need to include certain types of clauses in your employment agreements as well. There are certain types of clauses you may include in the contract, including: 

  • Non-competition clause 
  • Non-disclosure clause 
  • Ownership of inventions 

These are a few examples of specific clauses you may need to include in your employment contracts. By protecting certain information, you can shield your company’s competitive advantage and keep your closely held information where it belongs. If your employees will have access to sensitive information, client lists, important products, secret formulas and more, it is especially important to have carefully constructed employment contracts.  

The long-term interests of your company 

The intent of any type of employment contract is to protect the best interests of your business. By employing these tools, you can have better employer-employee relationships and minimize the chance of a dispute that can lead to expensive and costly litigation. When constructing your employment agreements, your goal should be to preserve the long-term interests of your Texas business.