WHY ARE EMPLOYMENT AGREEMENTS IMPORTANT?
WHY ARE EMPLOYMENT AGREEMENTS IMPORTANT?
Today’s employment market can be highly competitive for employers looking for top-tier talent. In Georgia, most employment relationships are “at-will”, meaning either party can terminate the employment relationship at any time for any reason. Having a solid employment agreement in place can serve to both protect the employer’s interest and provide some certainty to the employee regarding the conditions of their employment. Some of the key features and benefits of having a binding employment agreement in place are discussed below.
A confidentiality provision in the agreement protects a business with regard to proprietary information and trade secrets, client/customer lists, and other confidential and sensitive company information, preventing them from disclosing it to third parties or using it for their advantage. A non-solicitation provision can prevent leaving employees from taking other employees with them when they leave. Meanwhile, a non-compete agreement can prohibit former employees from working for competitors or starting a competing business for a specific period after the company.
Businesses spend a lot of time and money on new hire onboarding and training, not to mention costs like sign-on bonuses and recruiting expenses. The total costs increase when employees resign in the first three to six months. A well-drafted employment agreement can reduce the chances that this will occur. Although courts will not require a person to continue working for a company they desire to leave, provisions providing incentives or consequences for leaving early may be included.
A solid employment contract reduces the chances of a dispute between the employer and employee because it allows for pre-employee negotiation over issues that might have been a problem down the road if they had not been previously discussed and agreed to. Ultimately, an employment agreement protects the interests and rights of the employer and the employee, establishes a working relationship between them, promotes employee efficiency, allows both parties to review their rights and obligations, and reduces upfront costs.
This article is intended to provide you with general information; it does not constitute any type of legal advice. For recommendations related to your specific matter, we encourage you to review our Practice Areas page for additional information and then contact us to discuss your company’s legal needs.