Reading Time: 2 minutes

An employment contract should clearly define all terms and conditions of the employment relationship. The most common elements to any employment contract include the following.

  • Terms of employment
  • Employee responsibilities
  • Employee benefits
  • Employment absence
  • Dispute resolution
  • Nondisclosure agreements
  • Ownership agreements
  • Assignment clauses
  • Employment opportunity limitations
  • Grounds for termination

Specific Contract Terms to Include

Although the specific terms or articles required in an employment contract vary by state and by type of employment, the following terms and conditions are usually in these types of agreements:

  • Identification of the parties, including, in some cases, addresses and other identifiers.
  • Effective Date of the agreement
  • The type of employment, full-time or part-time, salaried or hourly, professional, and the type of services provided by the employee
  • Duties of the employee, including maintenance of professional licenses, ethical actions
  • The Extent of Services, including hours and days of work
  • Benefits provided to the employee. These may be specific or the agreement may refer to an employee handbook or benefits listing for all employees
  • Termination, describing the circumstances under which either party may terminate the relationship, and the notice required
  • Notices. How notices of actions must be sent and received by each party. This section describes the process of serving notice to the parties, including by mail, email, or other, and when notice is assumed to have been received.
  • Severability. This contract section states that one part of the contract is found to be invalid, the rest of the contract remains valid.
  • Dispute process. In many contracts these days, the dispute process is spelled out, including whether there is a mandatory arbitration process instead of having disputes tried in a court.
  • Applicable law. This section is a statement about the state in which the contract is effective. This is the state in which any disputes about the contract will be adjudicated (tried in court).

Restrictive Covenants in Employment Contracts

These agreements may be articles in an employment agreement, or they may be separate agreements. These agreements are not found in all employment contracts but depend on the type of employment and level of employment (executive employees or corporate officers, for example).

  • nonsolicitation agreement, in which the employee agrees not to solicit employer’s customers or other employees
  • A confidentiality agreement, in which the employee agrees to keep trade secrets, proprietary information private.