Employment Agreement Basics

While it’s true that the presumption of atwill employment isn’t dead, many employers find it in their best interest to have documented employment agreements with employees. This checklist helps understand the context and elements of these agreements

• Employee handbooks should:

o Be used to clarify the nature of the employer’s expectations of employee performance and conduct;

o Emphasize they create no change to the employee’s status as an atwill employee;

o State they are intended as “guides” that create no contract obligations;

o State the employer has sole discretion to modify or discontinue the handbook;

o Clarify that the handbook supersedes all documents containing terms of employment;

o Lay out policies for harassment, antidiscrimination, family and medical leave, affirmative action, and other issues relevant under state law, information and property protection, and workplace privacy.

• Since so many businesses are knowledgebased, other restrictive covenants can be helpful. Included are confidentiality, noncompetition, and nonsolicitation agreements.

• Other useful agreements include those to carve out specific exceptions to the atwill presumption and to arbitrate disputes. An employer can sometime compel arbitration of discrimination matters but those provisions will not be binding on the EEOC or a state agency, which could bring its own litigation. Most other matters can be submitted to arbitration as long as the arbitration clause:

o Is conscionable;

o Has a reasonable limitations period;

o Is mutual and bilateral;

o Is between the employer and the employee, rather than the employee and a third party;

o Is knowing and voluntary;

o Is limited in its scope and application; and

o Outlines how the process works.