On behalf of Thaler Law posted in business formation on Tuesday, May 28, 2019.

California business owners understand the importance of reducing legal complications whenever possible. One way to do this is by having strong employment contracts. When carefully and thoughtfully drafted, these are tools that business owners can use to protect their legal interests and clearly outline each party’s rights and responsibilities.

Employee contracts provide an explanation of what an employee can and cannot do, specifically when leaving the company. For example, a nonsolicitation clause can prevent a frustrated employee from encouraging others to leave the company or taking important information with him or her when leaving. Additionally, it is possible to include terms that will mandate all disputes to go through the arbitration process instead of heading straight to litigation.

Finally, a company can protect its competitive edge by including noncompete terms in the contract. These terms can allow a company to keep their proprietary information where it belongs, as well as keep an employee from leaving the company and starting a new, direct competitor to the former employer. A noncompete clause may also prevent a worker from leaving and going to work for another competitor.

As with all types of legal agreements, it is smart to ensure that the terms included are appropriate and enforceable. This allows a California employer to be certain the agreement will hold up in the event there is a dispute in the future. When drafting employment contracts, a business owner may want to work with an experienced attorney in order to avoid complications and ensure the right terms are included to suit the needs and goals of the company.