Important aspects of employee contracts

Employees are key to many businesses. If employers are not careful, they may find themselves facing litigation for handling certain employee situations in the wrong manner.

To help avoid this, it is important to have proper business practices in place. In that vein, there are a couple of important aspects of employee contracts to be aware of.

At-will employment

With California being an at-will state, both the employee and employer have the right to terminate employment at their own will. This may be due to a number of reasons, including breach of duty. To help avoid or justify such instances, it can be helpful to have written contracts in place that contain employee duties. Alternatively, employers may provide a breakdown of employee responsibilities in a separate document and allude to the employee's responsibility to fulfill those duties in the actual contract.

Either way, it is equally important to review the duties of each position with those employees to ensure that they have a full understanding of the expectations of them, as well as what they may expect from the company.


Noncompete and nonsolicitation clauses are quite common in many employee contracts, and rightfully so. These clauses help to protect businesses by preventing employees from accessing the companies' clientele for their own businesses down the road. This is particularly true concerning physicians and some sales positions.

Business owners should fully understand the laws surrounding these clauses, particularly the business regulation laws. These laws do stand to protect the business, but also ensure a fair situation for the employee or contractor. In short, they express that the noncompete law may stand in situations where the clause would prevent the professional from operating in a small portion of an industry; however, those clauses that would prevent the professional from participating in the field as a whole may not hold.

By knowing and abiding by these aspects of employee contracts, employers can facilitate fair and effective contracts. In turn, this can help to create and maintain healthy, fruitful work relationships.

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