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Employment Contract Must Haves: Confidentiality and Termination Agreements

If you've been following along, over the past few weeks, we've been discussing some of the most critical items every employment contract should include. So far, we've discussed everything from the basics of employee contracts (such as job information, compensation, benefits, and paid leave) to employment classification and scheduling. If you still have hesitations about having an employment contract in play, today's article is for you.

employment contract

While you may not consider confidentiality or termination agreements necessary, a lack of such agreements can cause real damage to your business. Furthermore, what other HR practices should you be putting in place. If you're not sure where to get started, your Raleigh lawyer, Eldreth Law Firm, can assist. They can help you with all of your employment contract needs and provide guidance on other employment best practices so that you can hire smarter moving forward.

With that in mind, today we’ll discuss 2 more critical items every employment contract should include: confidentiality and termination agreements.

Your Employment Contract Should Include a Confidentiality Agreement

Think about your business' "secret sauce." Perhaps it really is a special ingredient or material, but it could also be a process, a proprietary element or clientele. Whatever the case, nearly every business has "trade secrets," including client records that need to be protected.

One way to protect your business is to add a confidentiality agreement and/or a non-compete into your employment contract that outlines any specific rules or regulations that employees must follow. For example, if you don't want employees to use their work device for personal matters (social media, personal email, etc), make sure that you specify those details in the agreement.

Make sure that this agreement also addresses how employees speak of your company on social media platforms. The employment contract should clearly define what can and cannot be said by employees, as well as any repercussions that may result in violation of these rules as a condition of employment.

It Should Also Include a Termination Agreement

While it may seem a little premature to think about termination when discussing an employment contract, you should never assume that a new employee will become a permanent fixture within your organization. Rather, be sure that you have effectively planned for their depature by clearly outlining how termination will be managed (especially considering the "Great Depature" we're in the middle of right now).

Should an employee choose to leave voluntarity, fantastic; however, if you should have to terminate an employee, the employment contract should provide a plan for action. The termination agreement should include what is required for either party (employer or employee) to terminate the relationship, how much notice is required, and whether or not the termination needs to be delivered in writing.

That said, take care of how you end an employee relationship. How you manage any sort of termination or severance is often communicated to the general public and could impede on your ability to make future hires or conduct business in the community should it be handled poorly.

Many times, a business will ofter a severagnce package or outplacement plans to help employees "land on their feet," should a company have to downsize. We've also heard of managers within organizations offering to write letters of recommendation or other services to help their employees find other work assignments after a layoff. Consider what your company can do in order to maintain a positive employer brand.

Also make sure that you include any restrictions or mandates that former employees must adhere to upon leaving your organization. For example, an employee may not be allowed to take their client contact information with them to their next place of business (common for hair salons), or allowed to start their own business in the same industry within a certain mile radius of your business for a specified period of time (including hiring company-specific personalities for events).  Whatever the case may be, make sure that you clearly define the terms of your agreement in order to best protect your business and your clientele.

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