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Employment Contracts

Good-faith treatment for all is good policy, and good protection against lawsuits, too


Employees who claim they have been discriminated against typically have to show that their employers singled them out for poor treatment because of a protected characteristic. It’s easy for employers to counter that if they can show they always act in good faith. The best way to do that is to apply the rules equally to every employee.

Take 17 steps to protect your trade secrets

Confidentiality agreements and covenants against disclosing trade secrets aren’t just concerns for high-tech companies like H-P and Oracle. Chances are, your organization has proprietary information and intellectual capital that it wants to keep away from competitors. Here are tips on how to do it the right way.

Can we make this hire? Confidentiality agreement doesn’t include a noncompete

Q. We want to hire an applicant, but received a letter from his employer stating that working for us would violate a confidentiality agreement he signed with that employer. Since he doesn’t have a noncompete agreement, can we hire him?

Don’t write overly broad restrictions into noncompetes

Noncompete covenants in Texas must be limited to a reasonable geographic area or they aren’t enforceable. Unfortunately for employers, that geographic area is usually fairly small.

Upside of unions: No suing for wrongful termination

In North Carolina, union employees have to use their contracts to pursue claims they were unfairly fired. They can’t do what at-will employees can do—sue for wrongful termination.

If you discover wrongdoing after the fact, you can use it in court to justify termination


Sometimes, you don’t know how lousy an employee was until he or she is gone. That may be when you find out about missing work, or even missing money. Or you may discover that the employee was essentially dishonest. If that’s the fact, promptly document what you discovered—just in case there is a later lawsuit.

Call lawyer before considering anything like a noncompete–even a gentlemen’s agreement


California lawmakers—and courts—don’t like noncompete agreements because they limit employee mobility and career growth. Most employers understand that they can’t enforce such agreements if an employee leaves. But what about an informal “gentlemen’s agreement” between competitors to refrain from hiring employees who signed agreements?

What elements need to be included in a claims waiver associated with a severance agreement?

Q. We are considering providing an enhanced severance package to a group of employees if they agree to waive all potential claims against the company, including age discrimination claims. Are there any specific steps we need to take in connection with these releases?

Waiver in handbook prevents contract formation

Make sure your employee handbook includes a disclaimer specifying that the handbook is not a contract. Then have employees sign that disclaimer, acknowledging that they’ve read it. That way, you won’t accidentally create an employment contract.

Changing arbitration plan? Get every employee’s signature


In Texas, employees can be required to arbitrate employment disputes instead of going to court. When they start work, employees typically sign a document indicating they received and read the agreement. But employers often change arbitration agreements. Every time they do so, employees must receive a new copy—and sign an acknowledgment that they got it.