Employment Operations

How to Write and Work With Employee Contract Templates

Written by gilahalleli

 

First, writing. Don’t.  Just do not write employee contracts templates.  Step away from that computer. Have your legal counsel do it instead. Unless you are a lawyer, in which case I’ll allow it.

Drafting Templates

You don’t need to go to your legal counsel every time you hire an employee.  Go once. Ask them to write up a few templates, one for each type of employee you plan to hire (e.g. salaried, hourly, full-time, part-time,  etc.).

But…not just some boilerplate template. You want your templates to be fine-tuned to meet your company’s needs.  To that end, tell your counsel about what your company (and by definition, your employees) are going to be doing.  Are you going to be designing software?  In that case, you will want to make sure that all employment contracts include an iron-clad assignment of inventions agreement, in which employees give you the full rights to any development they do on the job.  Are you in sales? Consider beefing up your confidentiality and non-compete clauses  so that employees cannot leave and immediately approach your clients.  You can also have counsel fill in benefits terms, such as the number of vacation or sick days you plan to offer and incorporate key company policies and procedures, such as the company’s policies on sexual harassment or permitted use of company equipment.

Finally, in every area of the contract in which you will need to fill out terms and information specific to a particular hire, have your counsel add colored blank fields, like this [_________]. The details you are going to need to complete are likely to be scattered across the document; the color makes it harder for you to inadvertently miss one.   You can also ask them to highlight sections which cover items likely to be applicable to only some employees, such as a company phone or car, option grants, bonuses or commissions, ability to work remotely and the like.   These sections should be drafted in such a way that you can easily delete the section if it is inapplicable. (Kind of like Legos, if Legos were legal documents and not toys).

You will want to do this process separately for each country in which you have employees, as the labor laws are country-specific and vary massively.  Every 18-24 months, touch base with counsel and see if there have been changes to the law that needs to be incorporated into your templates. You can also update the templates for changes to your standard terms (e.g. increasing the number of vacation days).

Managing Templates

Now that you have the templates, for the love of all that is holy, don’t touch them.  Save them in a separate “templates” file.  Whenever you need to sign up a new employee, open your template file, select the template and save a copy of it to a new, separate file.  Give it a new name, such as the name of the employee. Go through the contract, look for all those lovely, colored spots and fill in the relevant terms and delete inapplicable sections.  Remember to remove the brackets and the colored highlighting!

Why Employment Contracts Rock

A statutory listing of terms  might seem on the surface as an easier and cheaper option.  The downside is that the statutory listing protects the employee. It doesn’t really protect you, the employer. For example, the employee doesn’t sign off on it and while it spells out the employee’s rights, it does not impose any employee obligations, such as confidentiality, assignment of inventions or non-compete terms.   You are often better served by investing a small amount of time and money getting the terms right from the get-go than having potentially invest a large amount of time and money litigating with an ex-employee because your contracts were not drafted properly in the first place. This is especially so in the case of post-termination restrictions or language protecting your intellectual property.

For more on why employment contracts are just wonderful and loads better than a sad, paltry listing of terms, see this lovely article.

My thanks to Will Steed and James Williams from the Employment Law team of Hill Dickinson for their assistance with this post.

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gilahalleli

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