Most employees do not need an employment contract because their employment positions are governed by state and federal law.
However, there are some instances when an employer might want to give an employee a contract.
- If an employer needs to entice individuals with specialized skill and knowledge: Employment contracts can be used to entice employees who have specialized skill and knowledge. If an employer is willing to promise individual job security and beneficial terms in writing, it will “sweeten the deal” for potential employees.
- If an employee would be difficult to replace: An employer might want to give an employment contract to an employee who would be difficult to replace because of her specialized skill or knowledge. Under these circumstances, an employer can use a contact to limit the employee’s ability to leave without notice so the employer has time to find a replacement.
- If an employee will learn confidential and sensitive information: An employer might want to give an employment contract to an employee who will receive confidential and sensitive information about the business. An employment contract can be used to limit the use and/or disclosure of the confidential and sensitive information for as long as the information remains confidential, in most cases.
- If an employer wants to limit competition: An employment contract can be used to limit competition by an employee during and after employment.
Employers should always proceed with caution because an employment contract could limit the “at will” employment relationship. Legal advice is essential.