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Employment contract law governs agreements between employers and employees, including non-compete, waiver, and severance agreements. At-will employees can be terminated at any time. Lawyers are often hired to review contracts and ensure compliance with laws. Non-compete agreements are significant and can be enforced unless too restrictive. Employers use employment contract law to protect their business, including through waiver agreements and classification of independent contractors.
Labor contract law is the body of legislation relating to agreements stipulated between employers and employees. Written, oral or implied agreements often give rise to disputes in an employment relationship and in some cases the end result is wrongful termination. There are several types of employment contracts, including non-compete agreements, waiver agreements, and severance agreements. An at-will employee is a worker who is not offered an employment contract or who is offered a contract but who can be terminated at any time. Workplace issues relating to free-will employees or employees on long-term contracts often fall outside the scope of employment contract law.
Employees often hire lawyers to review an employment contract to avoid legal pitfalls and to ensure their rights are protected and the contracts are in their best interests. For example, an employee may have waived his rights to trial in the contract and must go to arbitration where a panel of judges decides the issues. Attorneys representing both sides of an employment contract law dispute often need to sue for breach of contract issues, but some employment contracts require alternative dispute resolution methods in lieu of litigation. Non-compete agreements are also significant to employees and employment contract law, because in such agreements, employees often agree not to work for existing or future competitors for a specified period of time. Once a non-compete agreement is signed, courts often enforce it unless it proves too restrictive under regional employment contract laws.
Employers often employ lawyers to ensure that the contracts offered comply with national and regional laws and regulations, such as anti-discrimination laws. They often use employment contract law as a way to protect their business. For example, a non-compete agreement may include a restriction on the employee to solicit the employer’s clients for a period of time after termination of employment. The rationale is that if such a restrictive pact doesn’t exist, employees could steal customers and cause losses for the company. Waiver agreements are often included in termination agreements to protect employers from future lawsuits by employees after paying them additional sums upon termination.
Employment contract law also includes issues relating to independent contractors. Some employers run the risk of an independent contractor being classified as an employee for tax purposes. Disputes can arise between employers and government tax agencies regarding independent contracting, as well as if the employer’s actions contradict the contractor status.
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