Employment Agreements

Employment in Texas is "at will," which means that either the employer or employee may terminate the employment relationship for any reason, or no reason at all. However, an employment agreement can provide specific terms and conditions of employment during the employment relationship and even after the relationship has ended.

An employment agreement is generally the first step to notify a new employee about their primary responsibilities. An employer will not generally impose any obligations on itself except maybe stating a pay rate, or the time-off policy. However, an employer usually has the ability to change the terms of the employment agreement. An employee will be faced with accepting the new terms and continuing employment, or terminating employment if the terms or conditions are unacceptable.

Accordingly, an emplployment agreement may also outline the circumstanstances that could lead to involuntary termination. Additionally, an employment agreement may spell out the terms for non-competition after termination, or soliciting employees after termination. Texas is a business friendly state, and has very tailored rules for restricting a persons right to seek work elsewhere. An employer should have language that prevents the disclosure of proprietary information as a result of a terminating employee.

Kirkpatrick Law drafts employment agreements that are customized to the needs of the business. For example, in a very competitive job function with little risks to the employer may prefer a shorter agreement that only addresses a few issues. In situations where an employer hiring for a job function with more risks (for example, executives, sales people, etc.) may want to consider a more robust agreement that covers many details, such as intellectual property.

 

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Employment Agreements Q&A's

Employment Agreements Q & A's

Do businesses need employment agreements? +

Employment contracts should be used by businesses as a means to communicate expectations of employees at the onset of the employer-employee relationship. Employment agreements should be used at every level including the officers and executives. Written agreements are always the best option to avoid problems that can occur during an employee exit after a long duration of employment. Employees may also expect to receive an employment agreement that discusses items of interest such a compensation and payment frequency.

What should be included in an employment agreement? +

Issues that should be addressed are start date, compensation, payment frequency, holidays, paid time-off, and other benefits. Addressing that all intellectual property (IP) created during the course of employment will be considered a “work for hire” can also be beneficial to have in writing. This means that the company will own the IP created by the employee made in the course of the employment. IP assignments can also be included as another layer of protection that will have the employee assign any IP created during the employment. Non-disclosure clauses can also help ensure that confidential and sensitive information does not leave with the employee upon a departure from the business. Other than the business arrangement, an attorney will also include legal provisions to protect the employer against liability and help ensure compliance with local, state, and federal laws.

What are the advantages of an employment agreement? +

The advantages of the employment agreement include having clear written terms and conditions of the employment so that the employer can be sure of what is communicated to each employee and how it is communicated. It can also be used to protect the company by requiring an employee to agree to specific terms and conditions that benefit the company before the prospective employee begins work.

What are disadvantages of an employment agreement? +

Some businesses might be hesitant to having lengthy or robust employment agreements for fear that such agreement could create issues with attracting new talent. Of course, employment agreements can be customized to attract the best talent. However, in these situations, it may be helpful to include the most important terms in an employment agreement that includes a clause which states that the prospective employee has had an opportunity to review, and accepted, the terms and conditions described in a separate employee handbook.

Can an employment handbook include additional terms and conditions of employment? +

In addition to employment agreements, it can be helpful to provide an employee handbook detailing the policies and procedures for employment. When using an employee handbook that is tied to the employment agreement, an employer can make changes (e.g. annually), and require employees to make a simple attestation that the employee has read and has agreed to all of the changes in the handbook.

Can we use a template agreement? +

Using a template agreement (e.g. a template found on the internet) can be a risky practice because it may include terms that are not relevant, not advantageous, or not legal. Using so-called “standard contracts” may include clauses that can actually void the entire agreement if used improperly. An attorney at Kirkpatrick Law can draft an employment agreement that is clear and understandable to both management and prospective employees. These custom agreements can be used as templates for the company with spaces included for specific terms such as an hour wage. We can also advise a business on the appropriate policies and procedures related to employment that will be consistent with the employment agreement.

Why should our business have an employment agreement? +

Employment contracts should be used by businesses as a means to communicate expectations of employees at the onset of the employer-employee relationship.  Employment agreements should be used at every level including the officers and executives.  Written agreements are always the best option to avoid problems that can occur during an employee exit after a long duration of employment. Employees may also expect to receive an employment agreement that discusses items of interest such a compensation and payment frequency.

What should be included in an employment agreement? +

Issues that should be addressed are start date, compensation, payment frequency, holidays, paid time-off, and other benefits.  Addressing that all intellectual property (IP) created during the course of employment will be considered a “work for hire” can also be beneficial to have in writing. This means that the company will own the IP created by the employee made in the course of the employment. IP assignments can also be included as another layer of protection that will have the employee assign any IP created during the employment. Non-disclosure clauses can also help ensure that confidential and sensitive information does not leave with the employee upon a departure from the business. Other than the business arrangement, an attorney will also include legal provisions to protect the employer against liability and help ensure compliance with local, state, and federal laws.

 

What are the advantages of an employment agreement? +

The advantages of the employment agreement include having clear written terms and conditions of the employment so that the employer can be sure of what is communicated to each employee and how it is communicated. It can also be used to protect the company by requiring an employee to agree to specific terms and conditions that benefit the company before the prospective employee begins work.

What are the disadvantages of an employment agreement? +

Some businesses might be hesitant to having lengthy or robust employment agreements for fear that such agreement could create issues with attracting new talent. Of course, employment agreements can be customized to attract the best talent. However, in these situations, it may be helpful to include the most important terms in an employment agreement that includes a clause which states that the prospective employee has had an opportunity to review, and accepted, the terms and conditions described in a separate employee handbook.

Can an employment handbook include additional terms and conditions of employment? +

In addition to employment agreements, it can be helpful to provide an employee handbook detailing the policies and procedures for employment. When using an employee handbook that is tied to the employment agreement, an employer can make changes (e.g. annually), and require employees to make a simple attestation that the employee has read and has agreed to all of the changes in the handbook.

Using a template agreement (e.g. a template found on the internet) can be a risky practice because it may include terms that are not relevant, not advantageous, or not legal. Using so-called “standard contracts” may include clauses that can actually void the entire agreement if used improperly. An attorney at Kirkpatrick Law can draft an employment agreement that is clear and understandable to both management and prospective employees. These custom agreements can be used as templates for the company with spaces included for specific terms such as an hour wage. We can also advise a business on the appropriate policies and procedures related to employment that will be consistent with the employment agreement.

 

Can use a sample template employment agreement? +

Using a template agreement (e.g. a template found on the internet) can be a risky practice because it may include terms that are not relevant, not advantageous, or not legal. Using so-called “standard contracts” may include clauses that can actually void the entire agreement if used improperly. An attorney at Kirkpatrick Law can draft an employment agreement that is clear and understandable to both management and prospective employees. These custom agreements can be used as templates for the company with spaces included for specific terms such as an hour wage. We can also advise a business on the appropriate policies and procedures related to employment that will be consistent with the employment agreement.