Dinn, Hochman & Potter, LLC

Solid contracts do not always prevent contract disputes

Hiring a new employee is often a leap of faith. An Ohio employer may not know how closely the new hire will compare to the outstanding resume and references presented during the hiring process. Nevertheless, the employer may offer the candidate a job. However, when is it appropriate to include an employment contract, and how can one avoid contract disputes that may arise in the future?

Generally, many small business advocates recommend using an employment contract if the employee has skills the company would have difficulty replacing. A contract may include incentives to keep the employee in the company longer. Additionally, the company may protect itself with a contract for an employee who will be privy to sensitive or confidential information. Such a contract can include terms to prevent a worker from sharing trade secrets or moving to a competing company.

Having a contract may provide these protections, but it may also carry disadvantages. For example, if an employee is not working out, the business owner may have no option for releasing him or her because of the terms of the contract. Renegotiating a contract with an unsatisfactory employee may lead to legal issues, and the courts may suspect a business owner of acting in bad faith.

While misunderstandings between employees and their bosses are common, they are less likely when the company has a solid, written contract. Nevertheless, many Ohio business owners are frustrated when their employees violate important terms, such as non-compete or non-disclosure agreements. When contract disputes arise, a business owner may find it helpful to have the advice and guidance of an experienced attorney.

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