Employment contracts are not meant to bind all employees. They are usually negotiated between a company and key management, and sometimes with employees who bring unique skills to the business. These documents supersede California’s at-will status. An at-will employee can be terminated for any legal reason or no reason at all, but with an employment agreement, both parties are bound to follow its covenants regarding the term and termination.
If you are hiring skilled employees or upper management, a California employment contracts lawyer could review your current agreements or draft new ones. If an employer asks you to sign an agreement as a new hire, let an experienced attorney at Sparks Law review and explain what is expected of you.
The main benefit of an employment agreement is that it overrides the at-will status that allows employers to terminate and employees to quit a job without notice. These agreements specify a term for the employment, which is usually at least a year. The agreement can automatically renew or can be renegotiated at the end of the term.
A well-practiced California attorney can include an employee’s duties in the employment contract, as well as the employee’s salary, bonuses, and benefits. Additionally, employers should include termination language in the event the employee turns out to be unsuitable. Termination can be for specific causes, such as failure to meet specified goals or being convicted of a felony, or if the company becomes insolvent. The parties can also agree to settle disputes through mediation or arbitration instead of lawsuits.
The advantages of having an employment agreement outweigh the few disadvantages. However, employees who end up disliking their jobs or are offered better ones before the end of their terms may wish for at-will status.
On the other hand, employers generally pay higher salaries to contracted employees. If faced with downsizing, an employer may not be able to cut a contracted employee unless the situation is addressed in the agreement. As such, it is crucial to consult an experienced lawyer before entering an employment agreement in California.
In an employment agreement, it is essential to include both parties’ names, the employee’s salary and benefits, and the employee’s job duties. Other information may include:
Employers and employees must follow the contract terms because they are legally binding. This means each party agrees to perform or refrain from performing certain acts in exchange for the benefit of the other party’s performance. Failure of either party to perform their duties will result in a breach of contract and potentially a lawsuit.
The terms of an employment agreement address the employer’s unique needs. However, the contract must also comply with the Equal Employment Opportunity Act (EEOC), which forbids discrimination. Employers cannot offer contracts to select employees and not others performing the same job if the offer is made based on race, gender, religion, color, sex, ethnicity, age, disability, pregnancy, or genetic profile. Employers should meet with a local attorney familiar with discrimination laws when drafting or reviewing employment contracts.
Think of an employment agreement as a tool that improves your business by attracting and retaining valuable employees with sought-after skills. Employees also benefit from these contracts because they gain the peace of mind that they cannot be terminated at will.
At Sparks Law, our attorneys can advise you about the essential business contracts you should have at your disposal. We can review your documents and make suggestions or draft new ones according to your needs. Contact a California employment contracts lawyer today for a consultation.