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Should you use employment contracts?

| Nov 25, 2020 | Business Law |

As an employer, you know that you do not have to offer your employees a contract. Massachusetts is an at-will employment state. Most employees have no contracts at all.

There are benefits to at-will employment. If you want to fire an employee for almost any reason, you can do so. You’re allowed to do it whenever you want. You don’t even have to have a reason. You simply cannot break the law with the firing — letting an employee go because of their race, for instance, or their gender. Employees get the same freedom. They can quit whenever they want.

The positive sides of a contract

Why would you use an employment contract? After all, it’s going to make it harder to fire that person because you need to adhere to the formula set out on the contract. You may only be able to fire them for cause, for instance, or after a set amount of warnings. It all depends on the details of the contract.

There are positive aspects that go along with contracts, though. Your employee cannot just quit and run to the competition whenever they want. They have to abide by the length of the contract or face potential legal action if they fail to do so.

The contract also ensures that all details are clear to both sides. These details could include compensation, hours, duties and much more. Having a contract helps to avoid disputes.

Finally, the employment contract can be used along with other documents. When used with a non-disclosure agreement, for instance, you can protect your intellectual property. When used with a non-compete agreement, you ensure that an employee can’t take what they have learned and start a directly competing company.

Understanding the process

You certainly do not have to use contracts at your company, but you can see that they may offer some advantages. If you decide to do so, or if you need help enforcing one that you already have in place, be sure you understand every step of the legal process.