Big City-Small Town Signing On Dotted Line?
Contracts-Main
Employment contract considerations, from an employer’s perspective.

 

Whether your business is in a big city or small town, there are numerous legal issues that can result from entering into an employment contract, and too often employers are unprepared for the consequences.

Before entering into such a contract, employers should keep the following in mind:

At-will vs. specified time for employment. Employees are generally presumed to be “at-will.” This means that employment relationships of unspecified terms can be terminated by either the employer or the employee at any time, with or without cause. Contracts for at-will employees are usually unnecessary, as employers typically have handbooks, policies, and procedures governing at-will employment. For higher-level executives, however, the employer may wish to specify the period of employment (thereby exempting them from the company’s at-will provisions) to ensure that they don’t terminate their employment unexpectedly.

Termination clause
Of all employment contract provisions, the termination clause can become the most significant in the event an employment relationship goes south. Indeed, it is this provision that establishes a legal standard by which a termination will be judged. A contract that maintains at-will status provides the greatest flexibility for the employer. If the employment relationship is not at-will, greater caution must be exercised. Termination standards of “gross negligence” or “serious and willful misconduct” are virtually impossible to establish in the normal employment relationship, even when performance has been severely inadequate. Therefore, the employer should use general “for cause” language, which gives the corporation wide latitude in the event there is a performance or economic problem.

Duties, authority, responsibility, and compensation
The employer should reserve the right to set and change the employee’s duties, responsibilities, authority, and other employment conditions at any time. Such a provision minimizes the likelihood of liability should the employer’s operations change leading to a corresponding change in the employee’s working conditions or terms.

Restrictions on outside business activities
The contract should establish the level of commitment expected of the employee. This commitment can range from a covenant to devote one’s full energy, interest, and productive time to the performance of his or her duties as an employee, to a covenant not to render services of any kind or engage in outside business activity without the prior written consent of the employer.

RELATED POSTS

Small Business Owners Take Note: Employees Value Values

Small Business Owners Take Note: Employees Value Values

Here are five reasons why small business owners can benefit by practicing good values.   Amelia has been working for a small business for two years. In her role in customer relations, she knows she is supposed to keep the customers happy. Last month, Daniela...

Productivity Means Don’t Sweat the Small Stuff

Productivity Means Don’t Sweat the Small Stuff

Achieve a higher level of productivity by prioritizing your work lists of objectives.   The Oxford dictionary defines business productivity as: "The effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of...

The Imposter Syndrome Part 1: What Is It? [Video]

The Imposter Syndrome Part 1: What Is It? [Video]

The imposter syndrome is the experience of feeling like a phony. Editor's note: This is part one of this productivity emotional intelligence series. Imagine you just walked into a meeting room with five other people. One of them is a self-described “Perfectionist,”...

Polls

Sign Up for the Latin Biz Today Newsletter

Video Gallery

PR Newswire

Featured Authors

avatar for Holly PerlowitzHolly Perlowitz

Holly Perlowitz, CPA, serves as Busi...

Thinking About a Small Business Loan?

Money

Talent/HR

Legal

Marketing

What Are You Really Selling?

What Are You Really Selling?

Are you missing out on sales because you are selling the wrong thing? I walked up to the counter at my favorite local coffee shop. The young girl behind the counter with a beaming smile, looks me in the eye and says. “How are you doing today?” At first I was taken...

Strategy

Fashion

Food

Music

Sports

14 Takeaways From the World of Sports Business

14 Takeaways From the World of Sports Business

Check out these quick snapshots across the sports industry in May 2022 Welcome! Well, I am apparently over my anger about the baseball lockout. Yes, I am following the game to a degree, especially because the Mets are off to a good start. The New York Yankees are also...

Innovation

Work, Life & Culture

Culture

Health & Fitness

Travel & Destinations

Personal Blogs

Latin Business Today

Pin It on Pinterest