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Employment Contracts

Talk with a Hoffman Estates Lawyer to Learn More About Employment Law

Employment law does not require written contracts for all employees, and in fact, most employees are “at will” and do not operate under specific employment contracts. However, employment contracts can be beneficial for employers to clarify the employee’s responsibilities for protection of confidential company information and intellectual property such as customer lists. Employment contracts are also frequently used with executive employees to record the parties’ agreement on the fundamental characteristics of the job. Executive contracts typically outline the details of employment, such as the employee’s duties in the job, benefits the job grants, compensation computation, bonus structure, stock options, nondisclosure agreements that prohibit the employee from revealing certain information to non-employees, restrictions on competing with the company after the job ends, severance benefits, as well as many other matters related to the job.

As an employer, you must create a contract that meets your company’s needs and is legally sound. As an employee, you must ensure that a contract grants you certain rights. Non-competition clauses are particularly sensitive and require careful drafting. Our attorneys regularly work with businesses and employees to draw up, review and resolve employment contract disputes or breach of employment contracts. Our lawyers have many years of experience working in employment law and strive to find solutions that satisfy the best interests of our clients.

Why are Employment Contracts Useful?

Contracts can help clarify the parties’ expectations, establish procedures and include a variety of measures that can provide protection for both parties. For example, contracts can:

  • Prevent employees from revealing sensitive information or competing against your company – Nondisclosure agreements, or confidentiality agreements, keep employees from divulging certain information that you want to keep within the company and from misusing that information to compete against the employer. Illinois also permits employers to enforce non-competition agreements within certain parameters. The combination of the two types of provisions can provide significant protection against a key employee usurping the employer’s business.

  • Clarify economic issues – Many contracts specify the details of compensation, including bonuses, stock options and payments due on termination. This helps to avoid confusion and lawsuits.

However, to come to a sensible agreement, employers may need to give up certain privileges and grant more rights to their employees than are required by law. For example, Illinois law requires consideration to make a non-competition provision effective. Employers may offer severance as compensation for a non-compete provision even though employers have no legal obligation to provide severance to at will employees.

In executive employment contracts, employers typically offer incentives to key employees, such as defined performance standards with greater severance payments for a “no-cause” termination, in addition to certain benefits, such as paid vacation time or stock options. In general, employment contracts can be useful for both employers and employees, but it is essential that both sides find suitable compromises with the assistance of an experienced employment law attorney.

I Need Attorney Advice from a Business Lawyer with Employment Law Experience

The details of an employment contract are crucial for an employer and employee, which is one reason why those involved may need to consult with legal counsel before drawing up or signing any contracts. The Hoffman Estates lawyers at Pluymert, MacDonald, Hargrove & Lee, Ltd. can assist in issues relating to employment contracts and employment law. Reach out to our lawyers today to learn more about what we can do for your business.

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