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What are some common employment contract clauses?

On Behalf of | May 22, 2020 | Employment Law |

Sometimes it is in the best interests of employers in Florida to enter into an employment contract with new hires, rather than relying on “at-will” employment.

However, an incomplete or vague employment contract can cause problems. The following are important clauses to consider including in your employment contracts.

Some employment contracts include confidentiality clauses to protect the employer’s secret processes and plans and proprietary formulas, data and equipment.

Noncompete clauses may be included in employment contracts, if such clauses are reasonable in scope and nature. These clauses bar employees from working for a competing employer or soliciting your customers and clients if they leave your company.

Similarly, clauses on ownership of inventions may be included that state that anything an employee invents while in your employment belongs to you, not the employee.

Another common clause in employment contracts is a best efforts clause. This states that the employee will perform to the best of their ability and will exhibit loyalty to their employer.

Also, exclusive employment clauses may be included that state the employee will not work for anyone else in a similar type of business while in your employment.

Employment contracts may also include “no additional compensation” clauses. This means if the employee is elected to be a director or officer of your business, they will not receive additional compensation for doing so.

A “no authority to contract” clause clarifies this is solely an employer-employee relationship, not an agency relationship.

Not all employees end up being a good fit for a company, so many employers include termination clauses in employment contracts. These clauses say the employer can fire the employee for any reason, if a specific amount of notice is given or if the employee violates the employment contract.

Employment contracts may also include arbitration clauses that cover employment disputes and choice of law clauses in the event of litigation.

Keep in mind this list is not all-exclusive and is for educational purposes only. Ultimately, you may want to seek legal advice for more information on employment contracts.