As a business owner, there’s a lot to think about. With so much else to prioritize, many businesses fail to establish strategic, enforceable employment contracts. But this failure can be costly.
Employment agreements outline the terms and conditions of employment and protect both the employer and employee. Neglecting to draft such contracts can result in significant negative consequences for businesses.
A huge number of businesses don’t have an employment contract in place. Many more use boilerplate templates which offer little actual strategic benefit.
Making the investment to work with a qualified attorney to establish an employment contract that is right for your business and your goals can help you avoid poor outcomes in the future.
Need Help with Your Employment Agreements?
Schedule a consultation with Wood Edwards LLP today to get started.
7 Pitfalls an Employment Contract Attorney Can Help You Avoid
Here are seven ways that businesses can be hurt by neglecting to draft strategic, lawful employment contracts.
Increased Risk of Litigation
When employment contracts are not drafted strategically and lawfully, businesses may face a higher risk of litigation. This can result in significant costs associated with legal fees, damages, and lost productivity. Employment contracts are legally binding documents that outline the expectations and obligations of both parties. They are essential in reducing the likelihood of legal disputes between employers and employees. Failure to include crucial provisions in employment contracts, such as non-compete clauses or termination policies, can result in employees suing their employers.
To mitigate the risk of litigation, businesses should consider hiring an employment contract lawyer to draft employment contracts. An employment contract lawyer can ensure that the contracts comply with federal and state employment laws and contain the necessary provisions to protect the employer’s interests.
Loss of Key Employees
Without well-drafted employment contracts, key employees may leave the company, taking with them valuable skills, knowledge, and customer relationships. This can result in a loss of revenue and a decrease in overall productivity. A well-drafted employment contract can ensure that key employees are appropriately compensated and incentivized to stay with the company. This can include clauses such as non-compete agreements, severance packages, and bonuses.
An employment contract lawyer can help businesses draft employment contracts that are attractive to key employees and help retain them. They can also help ensure that the contracts protect the employer’s interests in the event that a key employee decides to leave the company.
Lack of Protection for Company Assets
Employment contracts can be used to protect a company’s assets, including intellectual property, confidential information, and customer lists. Neglecting to include adequate protections in employment contracts can result in the loss of valuable assets. For example, if an employee leaves the company and takes sensitive information with them, the company may suffer reputational damage or even legal consequences.
Related: The Texas Uniform Trade Secrets Act (TUTSA)
To protect their assets, businesses should work with an employment contract lawyer to draft employment contracts that include confidentiality and non-disclosure clauses. An employment contract lawyer can also ensure that the contracts protect the employer’s intellectual property rights.
Failure to Comply with Employment Laws
Employment contracts must comply with federal and state employment laws. Neglecting to include required provisions in employment contracts can result in legal penalties, fines, and damage to a company’s reputation. For example, Texas law requires employers to provide certain benefits to their employees, such as workers’ compensation insurance and unemployment insurance. Failure to include these benefits in employment contracts can result in legal consequences for businesses.
To ensure compliance with employment laws, businesses should work with an employment contract lawyer who has in-depth knowledge of federal and state employment laws. An employment contract lawyer can help ensure that the contracts comply with all legal requirements and protect the employer’s interests.
Decreased Employee Morale
When employment contracts are not drafted strategically and lawfully, employees may feel undervalued and disengaged. This can result in decreased productivity, increased turnover, and a negative impact on the company’s culture. A well-drafted employment contract can make employees feel valued and invested in the company’s success.
An employment contract lawyer can help businesses draft employment contracts that are fair, transparent, and employee-friendly. They can also ensure that the contracts include competitive compensation packages, benefits, and other incentives
Unclear Expectations
Employment contracts can set clear expectations for both employees and employers, outlining job duties, performance expectations, and compensation. Neglecting to include these provisions can result in confusion and misunderstandings, leading to decreased productivity and potential legal disputes.
An employment contract lawyer can help businesses draft employment contracts that are clear, concise, and easy to understand. They can also ensure that the contracts include all necessary provisions, such as job descriptions, compensation details, and performance expectations.
Inability to Attract Top Talent
Well-drafted employment contracts can be used to attract top talent to a company. Neglecting to include competitive compensation packages, benefits, and other incentives can result in an inability to attract the best candidates for open positions. This can lead to decreased productivity, increased turnover, and a negative impact on the company’s culture.
An employment contract lawyer can help businesses draft employment contracts that are attractive to top talent. They can also ensure that the contracts comply with federal and state employment laws and protect the employer’s interests.
Neglecting your employment contracts can result in significant negative consequences for businesses in Texas. These consequences can include increased litigation risk, loss of key employees, lack of protection for company assets, failure to comply with employment laws, decreased employee morale, unclear expectations, and inability to attract top talent.
To avoid these consequences, businesses should consider working with an employment contract lawyer to draft employment contracts that protect their interests, comply with employment laws, and attract top talent.
Contact Wood Edwards online anytime to speak with an attorney.