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Importance of Employment Contracts


Employment contracts are often used as a means to convey the terms and conditions of employment and the capacity in which an employee is being hired, along with the corresponding job responsibilities.  These contracts also include important information such as the employment term, compensation and benefits, and terms and conditions for termination of an employee. If drafted properly, an employment contract will provide security and protection for both the employer and the employee.

From an employer’s standpoint, employment contracts are often utilized to help protect the business and any trade secrets.  An employer may include provisions in the employment contract that prevent employees from disclosing certain company information after they leave the company. Further, an employer may include a “Non-Compete Agreement” within the employment contract, preventing former employees from competing directly with the company for a prescribed amount of time after their employment ends.

An employer also stands to benefit from an employment contract that sets forth specific standards that are expected of an employee. An employment contract which details the employer’s expectations ensures that an employee is fully aware of his or her obligations and has agreed to the terms set forth. It also provides an employer with grounds for disciplining or terminating an employee who does not meet those expectations. Oftentimes, if an employee does not meet certain expectations listed in a contract, employment litigation may be needed. Finally, an employment contract may be used by employers as a way to recruit high quality employees, as a well-drafted employment contract should describe specific benefits and conditions of employment to a highly desired candidate.

For an employee, a well-drafted employment contract can aid in creating job stability and predictability. As an employee, it is important to note and discuss the terms and nature of employment set forth in the employment contract. This may become especially important in the event one believes he or she has been wrongfully disciplined or terminated. Additionally, an employment contract which sets forth exactly what is to be expected of an employee will assist in ensuring predictability in daily job performance. Further, an employment contract may ensure a certain degree of job security by restricting an employer’s ability to terminate an employee arbitrarily and without warning. Finally, a well drafted and bargained for employment contract can go a long way in ensuring that the conditions promised continue to be met.

At Bremer, Whyte, Brown & O’Meara, we handle all aspects of Labor and Employment law for both employers and employees, and we are here to help you with any of your workplace needs.