Employment Agreement Drafting & Development
As a Charleston business law firm, we are frequently called on to assist our business clients in the negotiation and drafting of employment agreement. Like any other legal agreement entered into at the beginning of a collaboration between two or more parties, be it a South Carolina corporation, South Carolina limited liability company, a partnership, or a joint venture, these agreements play a vital role in determining the success or the failure of the professional relationship.
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 that don’t have such authority. Other considerations that may factor in on the decision of whether a business should implement a written employment agreement is the complexity of the employee’s compensation arrangement, the uniqueness of the employee’s skills 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 business owner, properly reviewing, drafting and negotiating business contracts is one of the most important responsibilities of a businesses success.
The following provisions are generally included in a well-drafted employment agreement:
- The employee’s pay rate
- Severability clause establishing that the remaining terms of an agreement will be upheld even if a court finds that one or more provisions are unconstitutional, void, or unenforceable
- Starting date
- Statement of at-will nature of employment, if applicable. At-will employment means that the employer or employee may fire or quit the job at anytime for any reason, as long as that reason is not illegal (e.g. discriminatory)
- Title of the position being offered to the employee
- Confidentiality agreement clause establishing that the employee will not disclose any information regarding how the employer runs his or her business, or information regarding the employer’s secret information or data such as processes, plans, formulas or machinery the employer uses. Confidentiality agreements outlive the term of employment.
- Non-complete agreement establishing the promise by an employee that he or she will not work for the employer’s competitors, work for an employer involved in the same type of business, or start his or her own business that will compete with the employer’s business, for a certain time after the employee no longer works for the employer. The validity of this type of clause depends on the limitation it imposes, for example an employee must only be restricted in a specified geographic location.
- Statement and descriptions of benefits plan, if eligible or applicable