At-will employment is very common in the United States, and it means that employees do not have contracts. They simply agree to work at the business for a specific wage. But there’s no contract in place, so this relationship could end – by the will of either of the parties – at any time.
It is certainly simple to use at-will employment options. That’s why most businesses choose to do so. But what are some of the benefits of using employment contracts instead? Why would you take this additional step?
Protecting intellectual property
One potential benefit is that you can protect your company’s intellectual property. The employment contract can be used to inform the employee about their obligations when it comes to trade secrets. Part of the contract could involve the employee signing a nondisclosure agreement (NDA), for instance. Not only does this ensure the employee knows they are supposed to keep these trade secrets, but it also tells them what legal action the business can take if they violate that contract.
Defining how an employee should leave their position
Another potential benefit is that an employment contract addresses how an employee can quit. With at-will employment, they can just leave at any time. They don’t have to give notice, and they don’t even need a reason. But an employment contract could specify that they need to give two weeks or a month of notice in advance, for instance, or address other steps they need to take to leave before the contractual terms have expired.
These are just two important areas to think about when creating employment contracts. Be sure you know exactly what legal steps to take as a business owner.