What is an employment agreement?

An employment agreement is a contract that spells out the relationship between an employer and an employee. Most employers do not have employment agreements with their employees. This means that the employment relationship is “at-will” and is terminable by either party at any time and for any reason—provided, however, that the termination decision does not run afoul of state or federal anti-discrimination statutes.

However, an employer may want to have a written agreement with an individual employee to define his or her job duties; describe compensation arrangements (e.g. bonuses and commissions); impose confidentiality, non-solicitation, and non-competition obligations; and define method for resolving disputes between the employer and employee. Employment agreements also may be used for the purpose of establishing the length of employment, describing the fringe benefits available to the employee, and outlining the circumstances under which an employee can be terminated (i.e. with or without cause).

Why should I choose MDA to handle my employment agreement case?

Martineau, Davis & Associates has substantial experience representing both employers and employees in cases involving employment agreements. For our employer clients, we draft employment agreements that clearly define the scope of the employee’s job duties and responsibilities and that protect the employer’s legitimate interests in its intellectual and other business property. Having a well-drafted employment agreement is critically important when the employment relationship comes to an end, as it ensures that the employer’s confidential and proprietary information remains protected from unauthorized use and disclosure by a disgruntled former employee. A well-drafted employment agreement also prevents a former employee from engaging in unfair competition with his or her former employer and from soliciting other employees to leave.

For our employee clients, we often review employment agreements to ensure that their terms are fair and reasonable. Disputes often arise regarding the payment of wages and other incentive compensation. These disputes require a close reading of the employment agreement’s compensation and dispute resolution provisions. Disputes also arise in the post-employment context when a former employer attempts to enforce a confidentiality or non-competition provision contained in an employment agreement that the employee signed at the commencement of his or her employment. Again, a close reading of the employment agreement is required to determine whether the employee has breached a confidentiality or non-competition obligation to a former employer.

How does the process work when filing a claim?

If an employee wants to bring a claim against a current or former employer based on the provisions of an employment agreement, he or she will need to have the agreement reviewed by an attorney before proceeding. The attorney will review the agreement to determine whether there has been some sort of non-compliance or violation by the employer. Upon determining that the employer may have violated or failed to comply with the terms of the employee’s employment agreement, the attorney may reach out to the employer directly to address the issue. Depending on the dispute resolution provisions contained in the agreement, the employee may need to file suit to protect his or her legal rights under the agreement.

Most claims brought by employers typically arise after the employment relationship has ended. Usually, the employer believes a former employee has violated the confidentiality, non-competition, or non-solicitation provisions of his or her employment agreement and that there is a risk of imminent harm to the employer. Once again, it is important that the employer have the agreement reviewed by an attorney to determine whether a potential violation exists. Depending on the nature of the violation, time may be of the essence to prevent or minimize harm to the employer.

What is the difference between a severance and a separation agreement?

Severance is a payment by an employer to an employee upon the termination of the employment relationship. A severance payment often is a component of a larger separation agreement or severance agreement between the employer and employee. Usually, payment of a severance is conditioned upon the employee waiving or releasing certain claims that he or she has or may have against the employer arising out of the employment relationship. Employment discrimination claims arising under state and federal law frequently are the subject of separation agreements.

Should a company have an employee handbook and what are they for?

Employers are not legally required to have an employee handbook. However, when properly drafted, employee handbooks serve an important purpose for the employer. Employee handbooks allow the employer to communicate expectations about behaviors and rules in the workplace and provide tools to managers for managing their employees. For example, employee handbooks allow the employer to communicate standards of behavior (e.g. promotion, performance evaluation, discipline) and the values of the organization (e.g. equal employment opportunities, codes of conduct, internal dispute resolution).

Is there anything negative about having an employee handbook?

Whenever possible, an employee handbook should be drafted by an attorney with substantial experience in the area of employment law. Employers who fail to exercise care when drafting and utilizing employee handbooks can—and often do—create significant legal liabilities for themselves. For example, a reference to a probationary period for new employees may be construed by a court as creating a “permanent” employment situation in the post-probationary period that can be terminated only for “just cause.” Many employers do not realize that such a seemingly innocuous provision could fundamentally alter the at-will employment relationship.

What are privacy policies, and what do they have to do with employment agreements?

Simply put, privacy policies spell out how employers may deal with the privacy of employee records and communications.

Martineau Davis & Associates is committed to aggressive advocacy for our clients while maintaining the highest level of professionalism, integrity, and ethical standards. Contact us at 401-234-0751.

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