Monday, December 9, 2013

The Basics of Employment Agreements and Other Employment Documents Affecting Your Business

By Erica N. CordovaHR Esquire – The Cordova Law Firm LLC

Employee Handbooks & Workplace Policies
For many employers, it is a good idea to create an employee handbook that clearly articulates your workplace policies beyond state and federal law requirements. There are many advantages to maintaining a current employee handbook, such as:
  • legal protection if a dispute with an employee arises;
  • employees receive and have notice of the same workplace rules; 
  • employees know your expectations; and
  • employees know what to expect from you.

Employment Agreements
An employment contract is a written document that you and your employee sign outlining the terms of your working relationship. While you can't force someone to keep working for you or adhere to the terms of the contract, an employee is likely to comply with the agreement's terms if there's a penalty for breaking the agreement. Written employment contracts are useful if you want to:
  • control the employee's ability to leave your business;
  • require the employee to provide you sufficient notice to find a suitable replacement;
  • establish duties and standards for the employee's performance;
  • specify grounds for termination; or
  • establish compensation, benefits, or severance terms.

Non-Compete Agreements
A non-compete agreement is a contract between you and an employee, where the employee agrees not to compete with the employer for a certain period of time after the employee leaves the company. A non-compete agreement protects you by preventing an employee from competing against you after leaving your company (1) for a specified amount of time, (2) in a specified geographic area, and (3) with a specified type of business related to your business. 

Confidentiality Agreements
A non-disclosure or confidentiality agreement is a contract between you and an employee designed to keep confidential an employee’s knowledge of confidential or proprietary company information or trade secrets. You should consider having an employee sign a confidentiality agreement if the employee will be learning or have access to sensitive or confidential information about your company.

Severance Agreements
Although it is not required by law, many employers routinely give severance packages to long-term employees who are terminated for reasons other than misconduct. In other instances, however, the employer knows that terminating an employee will be particularly difficult and may even result in a lawsuit. Some employers routinely request that their employees sign a release as a condition of receiving a severance package, while other employers only request an employee to sign a release when there might be legitimate legal claims against the company.

Employee Benefits Documentation
The Employee Retirement Income Security Act (ERISA) requires plan administrators to give plan participants (employees) written information regarding important facts plan participants need to know about their retirement and health benefit plans. The plan administrator must provide participants with a Summary Plan Description that provides information on when employee participation begins, how service and benefits are calculated, when benefits becomes vested, when and in what form benefits are paid, and how to file a claim for benefits. Additionally, some plan administrators must automatically give participants a copy of the plans summary annual report yearly.

Erica N. Cordova is the Managing Attorney of HR Esquire - The Cordova Law Firm LLC. At HR Esquire, we believe in passing the savings along to our clients through our part-time law firm model. We strive to help small businesses develop a solid foundation and legal strategy so they can be successful. We will work to improve legal compliance and employee relations. Our goal is to improve your business' performance and provide legal advice for a successful human resources strategy via our Offsite General Counsel. Find out how we can help you and your business today! If you have questions about this article, please email 

No comments:

Post a Comment