Employment Contracts in an At-Will Employment State
January 27, 2013
Please consult an attorney in your jurisdiction before acting on any information in this article. No attorney-client relationship results from the dissemination of information contained herein. This article is an expression of my opinion and should not be considered “legal advice.”
I am always a little shocked at how little many business owners know about employment contracts, especially employers who have several, or even many, employees. Many business owners simply assume that, because their business is located in an at-will employment state, a contract for employment is either infeasible or otherwise undesirable. Often, nothing could be further from the truth.
If your business is in an at-will employment state, that, in a nutshell, merely means that the default rule is that an employment relationship can be terminated any time for any reason, as long as you’re not discriminating against a member of a protected class. Nothing prevents employers from going around this default rule by using employment contracts to structure the nature and attributes of the employment relationship between themselves and their employees. Such contracts can, in fact, provide distinct benefits and protections to both employee and employer.
Consider a tattoo parlor that employs several tattoo artists, who tend to be highly creative, Type-A individuals. Managing strong personalities in close proximity on a daily basis is a challenge, especially when trying to navigate the troubled waters of conflict resolution. In many ways, managing a business like a tattoo parlor is like managing a band. Everyone is an artist, each an individual, a beautiful and unique snowflake that must be protected, nurtured, and made to feel special and important, without allowing the creative talent to dominate in business matters. Employment contracts can address the legal risks involved with dealing with intelligent, creative people with strong, Type-A personalities by establishing expectations, responsibilities, and obligations clearly from the beginning of the employment relationship.
The employer has no greater power at any time than at the moment he is considering whether to hire an employee. Making the right decisions the right way at he beginning of the hiring process will have long-lasting and far reaching effects on the quality of the work environment and the nature of the employer-employee relationship as long as the employee hired works for the employer. This is, therefore, the time to consider how best to take care of that relationship and the workplace environment while meeting the needs of the employee.
For many employers, the efforts made to maximize benefit and minimize damage in the hiring process stop at the end of the interview process. Some may require their employees to sign statements acknowledging they understand key company policies. None of these efforts or strategies have the efficacy an employment contract has.
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Employers balk at employment contracts, in some cases, because they mistakenly believe employment contracts are too rigid, expensive, or unwieldy to implement and maintain. If that was ever true, it is longer the case. As the costs of hiring (and firing) employees has dramatically risen in recent years, making costly mistakes in the hiring process has become a make-or-break issue for businesses, especially small businesses. Having an attorney draft and manage an employment contract for your business can be an affordable way to reduce the risk to your business that comes from the hiring (or firing) process.
Executive Legal Professionals offers both employment contract drafting and employment contract management services for relatively low, flat monthly rates with several of our packages of legal services that can be customized to fit the needs of your business. Call ELP today at (615) 669-6566 for a no-risk, no obligation consultation.
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