Employment contracts typically protect your business in a number of ways. These contracts specifically outline your expectations for new hires and provide you with grounds to take action if they fail to meet those expectations. They also typically delineate your obligations to your staff, e.g., what benefits you provide to them and what rights they have at the end of their time working with you.
Employment contracts often include documents like non-disclosure agreements (NDAs) to protect any proprietary information to which an employee has access, as well as non-compete agreements to ensure that employees won’t use the information they gain at the company for personal gain and to poach clients.
Unfortunately, especially when an employee leaves the company on bad terms or is terminated, disputes can arise related to the content of the employment contract. In many cases, careful planning can limit the damage such disputes can cause your company.
Customized contracts offer your company the best protection
Confusion about the meaning of certain sections of a contract, vague language and the use of the same boilerplate documents for every staff member can create issues for companies. Having executives and custodians execute the same contract, for example, might make a custodian believe that the severance pay clause might apply to their position as well.
The more specific and unique the employment contract your employees execute, the less likely your company will be to fall victim to common contract pitfalls. These could include non-compete agreements that are too vague or generic contracts downloaded from the internet that include clauses not legally enforceable here Mississippi.
Ensuring that employees thoroughly review the contract prior to signing can limit disagreements later that stem from a misunderstanding on the part of a staff member. Finally, it may be worthwhile to include clauses in your employment contract that mandate arbitration in order to prevent frivolous lawsuits. However, you should also be ready to take action to enforce your contract if a former staff member violates it.