An employment contract is a legally binding agreement between two parties, generally between an employer and employee, and is designed to protect both parties.\u00a0 For employees, having an employment contract gives them security by clearly outlining his or her duties and obligations of employment.\u00a0 It also helps protect the employers\u2019 clientele and intellectual property.<\/p>\n
Because laws vary from state to state and an employment contract\u2019s enforceability is often under scrutiny, careful considerations should be taken when drafting these contracts.\u00a0 Not every contract is enforceable simply because it was signed.\u00a0 Courts have the discretion to strike down all or part of a contract if it is found to be unreasonable or against public policy. \u00a0It is important to seek counsel from a knowledgeable Silicon Valley employment attorney who can help draft employment contracts<\/a> that protect a company\u2019s best interests. \u00a0The following are four examples of common provisions in employment contracts:<\/p>\n Non-Compete Provisions<\/strong><\/p>\n A non-compete<\/a> provision is part of an employment contract that states the employee is agreeing not to use anything learned on the job to join or start a new company that competes in the same market as the original employer.\u00a0 In many states, non-compete provisions are entirely legal; however, California is a notable exception to this rule.\u00a0 In few circumstances, a California non-compete provision is legal and enforceable.\u00a0 Because non-compete provisions are usually void in California, many companies try to find ways around these laws.\u00a0 Non-compete provisions are particularly notorious for being struck down by courts as overly broad in duration or geographical location.<\/p>\n When drafting a non-compete provision, it is pertinent that the language is limited if an employer hopes to draft an enforceable non-compete provision.\u00a0 Having the assistance of the Silicon Valley employment attorneys at Startup Company Counsel, who are distinguished for their success in employment related matters, such as drafting contracts, can greatly increase the chances of having an enforceable non-compete provision.<\/p>\n Non-Solicitation Provisions<\/strong><\/p>\n While non-solicitation provisions in California are generally void, California courts have upheld narrowly drafted non-solicitation provisions.\u00a0 Whether or not the non-solicitation provision is enforced depends on what the provision deems \u201csolicitation\u201d, whether the identity of an employer\u2019s customers and\/or employees can be considered \u201ctrade secret<\/a>\u201d, and the extent of the employee\u2019s personal knowledge.\u00a0 California courts have also held that customer information and identity may qualify as trade secrets, and have such held that the use or disclosure of a former employer\u2019s customer information to solicit customers is a misappropriation of trade secrets.\u00a0 In other words, a California business can legally require that former employee to maintain confidentiality of trade secrets and confidential information<\/a>.<\/p>\n Ownership of Intellectual Property<\/strong><\/p>\n It is important that employers draft employment contracts to protect their intellectual property<\/a>, trade secrets, customers, and goodwill. \u00a0While a non-solicitation provision is generally unenforceable, an employee can be prohibited from using and disclosing trade secrets and confidential information.\u00a0 With a well drafted \u201cconfidentiality clause\u201d, a company can protect its intellectual property from being exposed.\u00a0 In addition, invention assignment provisions can greatly protect a company from employees using company resources to create their own businesses.\u00a0 Our experienced Silicon Valley employment attorneys know how to include the proper provisions to your employment contract to protect any business and its intellectual property.<\/p>\n Employee vs. Independent Contractor Status <\/strong><\/p>\n An employment contract will specify whether a worker is being hired as an employee or an independent contractor<\/a>. \u00a0As we previously discussed, there are significant differences between an employee and independent contractor<\/a>.\u00a0 If a situation ends up in litigation, a judge is not bound by the term used in the contract language.\u00a0 He or she can look beyond the title (and even beyond the W-2 or 1099 tax form used) to determine if the relationship is actually that of an employee or independent contractor.\u00a0 It is crucial to draft an employment contract to define the worker properly, whether as an employee or independent contractor, and subsequently, treat the employee consistent with the employment contract.<\/p>\n Contact Experienced Silicon Valley Employment Lawyers <\/strong><\/p>\n Employment law can be complicated and has many obligations to be followed. \u00a0Let the experienced employment law attorneys at Startup Company Counsel ensure your company\u2019s compliance with California employment law by advising you on how to protect your company\u2019s interests<\/a>.\u00a0 Having a legally binding employment contract helps avoid misunderstandings and gives both parties clarity about both the rights and responsibilities expected.\u00a0 The Silicon Valley employment lawyers at Startup Company Counsel are recognized for their outstanding reputation for success in employment law matters.\u00a0 Call (408) 441-7555, or use our online contact form<\/a> to schedule your consultation with a Silicon Valley employment lawyer today.
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