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What are the elements of an employment contract?

On Behalf of | Jun 10, 2020 | Contracts |

Employment contracts are crucial for both employer and employee. These documents protect each party’s rights and designate each party’s responsibilities to each other. A solid contract can go a long way toward preventing time-consuming, costly employment disputes.

Although it is not advisable for employers or workers to write a contract without legal assistance, it is still wise for both parties to understand the aspects of a good contract. To educate everyone who may need an employment contract at some point, we will discuss some of the most important components of these documents.

Learn the basics of employment contracts

Every employer and worker is unique, so every employment contract will be unique. Some contracts are brief and others are several pages long. However, most will have a few of the same elements. These may include:

  • Exclusive employment agreements: These provisions stipulate that the employee will work for only the company mentioned in the contract.
  • Non-compete agreements: Non-competes mean that an employee cannot work for a rival business for a certain period after they leave the employer.
  • Confidentiality agreements: Confidentiality agreements can ensure that workers will not leak company secrets to competitors or other employers.
  • Arbitration clauses: Though controversial, arbitration clauses mandate that signatories will handle any disputes through arbitration, not litigation.
  • Termination clauses: To lay out the conditions in which an employer may fire an employee, contracts often include termination clauses.

There are several other provisions that can strengthen a contract for the benefit of both employer and employee. An employment law attorney can work with either party to create a legally sound document.

What if a contract dispute arises?

Even the most carefully drafted contract may eventually become embroiled in a dispute. In these instances, it is crucial for each side to have strong legal counsel to protect their best interests. Many conflicts result in private negotiations, while others may require litigation.