What is an Employment Contract?
An employment contract is an agreement between two parties – an employee and an employer, that involves terms and conditions of employment. Some employment contracts may be oral, whereas others are written and contain many descriptive provisions. Oral employment contracts are enforceable but could be much more difficult to prove in court. Some employment contracts may even be “implied”. In such cases, a court would look at the combination of factors around the implied contract, such as payments being made, duties undertaken by the employee, term of the employment, etc.
Most employment contract in the United States are presumed to be “at-will” contracts, which means that the employee has the right to quit his job at any moment and the employer has the right to fire an employee almost at any time.
Florida statute 448.101 governs the definitions of the parties to an employment contract. Under this statute, an “employee” is a person who performs services for and under the control and direction of an employer for wages or other remuneration. The term does not include an independent contractor. An “employer” means any private individual, firm, partnership, institution, corporation, or association that employs ten or more persons.
What are the Requirements of an Employment Contract?
Certain states have their specific requirements for employment contracts. However, there are some provisions that are highly advisable to be included in every written employment contract. Such provisions include the job description of the employee, the term of employment, if such a term exists, the description of the employee’s duties, termination policies, as well as benefits that the employee receives under the contract. Additionally, it is highly advisable to have an added confidentiality provision that would protect the employer’s “trade secrets” and other confidential company information as well as a non-compete provision (that has to closely follow local regulations), and a dispute resolution provision that would state the law governing the contract and whether the parties choose arbitration or litigation as a dispute settling mechanism.
Generally speaking, it is recommended for an employment contract to be in writing, so that the interests of both the employee and the employer are protected.
Why is an Employment Contract so Important?
A written employment contract protects the interests of the employee and the employer. It includes the description of the compensation and benefits of the employee as well as guards the employer from liability of a potential lawsuit in different scenarios of a dispute arising out of the employment relationship. Courts all over the United States defer to the common law principle of the freedom of contract, making contracting the most effective tool to help protect your interest in any business relationship.