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Benefits of Comprehensive Employment Agreements

Monday, January 21st, 2019

By: Allison Davis, J.D.

Many employers only have comprehensive, written employment agreements for senior management and rely on at-will employment laws and regulations for the rest of their employees. However, employers should consider entering into detailed, written employment agreements with certain types of employees.

Specialized Training. If an employer provides an employee with specialized training, then the employer may want to have the employee execute a non-competition agreement. However, it is important to review state law related to non-competition agreements; in many states, to be enforceable, the non-competition clauses must be included in another agreement, such as an employment agreement. State law will also dictate the permissible scope of non-competition agreements.

Confidential or Proprietary Information. If an employee has access to an employer’s confidential or proprietary information (such as financial data or referral sources), failing to protect that information can be problematic if the employee leaves the company on bad terms. An employment agreement can be used to clearly outline the types of confidential or proprietary information the employee may receive and the restrictions on the use or disclosure of that information. Non-competition agreements may also be used to prevent an ex-employee from disclosing confidential or proprietary information to competitors.

Varying Pay Schedules. The biggest benefit of a well-drafted employment agreement for an employee receiving commissions or varying pay is that the compensation is clearly outlined in writing which can help avoid disputes or confusion between the parties. An employment agreement should include details regarding when pay is earned versus when it is paid, the rates for varying types of pay or commission, and requirements for payment.

Counsel can assist in the preparation of appropriate employment agreements for specific situations. The agreements do not have to be overly complicated but should adequately address the relationship between the parties to avoid confusion or disputes regarding the terms of employment.

Allison Davis, J.D., is a member of the employment group at Brown & Fortunato, P.C. She routinely assists clients in the health care industry on matters that involve employment law. The Employment Law team at Brown & Fortunato can be reached at 806-345-6300. Or contact Allison directly at adavis@bf-law.com.