As a business law firm, we are frequently called on to assist our business clients in the negotiation and drafting of employment agreements. Like any other legal agreement entered into at the commencement of a collaboration between two or more parties, be it a corporation, limited liability company, a partnership, or a joint venture, employment agreements can play a vital role in determining the success or the failure of the relationship.
With profits declining and competition on the rise, businesses are not only struggling to find creative solutions to increase productivity, contain costs and protect their market shares, but to define and clarify each party's expectations and obligations both during the employment relationship and, just as importantly, after the relationship comes to an end. Many have turned to employment agreements as a vehicle to attract and retain key personnel and to prevent the disclosure or unauthorized use of trade secrets and other confidential information.
The decision whether a business should negotiate and develop an employment agreement may likely depend on the type of business and employee involved. Generally, employment agreements are more common for employees with significant authority to transact business on behalf of the business, and less common for those employees whom don't have such authority. Other considerations that may factor in on the decision of whether a business should implement a written employment is the complexity of the employee's compensation arrangement, the uniqueness of the employee's skill and services being provided to the business, and the degree to which the employee may pose a competitive threat to the business after the relationship comes to an end.Whether a new or seasoned businesses owner, properly reviewing, drafting and negotiating business contracts is one of the most important responsibilities of a businesses success.