Partnership for the Good of Your Business

Employee contracts may help both employer and employee

On Behalf of | Mar 2, 2015 | Closely Held Businesses |

As some Ohio business owners may know, businesses may offer employment contracts when hiring new employees. This provides assurance to both the employee and the employer that certain aspects of the relationship are tangible, regarded as nonnegotiable or unable to be changed without cause.

Whether a company is large or small, the company may deliver unique services or products to its patrons. Protecting the exclusivity of the company’s trade secrets may be accomplished in part by an employee contract that prevents an employee from using such information or customer lists for his or her own gain.

Employee contracts may do this by using non-compete agreements. If state law does not allow enforcement of a non-compete agreement, as some states do, nondisclosure or confidentiality agreements might be substituted. The overall effect is similar.

The use of employee contracts may be beneficial for other reasons. Employers spend money and time training a new employee. The employee contract allows an employer to stabilize the business organization. This prevents the trained employee from leaving before the benefits of such training are realized by the employer, and the contract may specify the duration of employment. Employees might see this as a helpful feature since the employee may not wish to train and not be assured of a stable workload for a specified period.

Aside from the duration of employment, salary and job description, employee contracts might include benefits, sick leave and vacation specifics and reasons for termination. However, both parties need to understand the contract is binding and should be offered and received with that in mind.

Implementing an employee contract using specifics may be beneficial for an employer, and the details of the contract are important. An attorney may provide insight into the parameters that may be included and their enforceability.


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