Defining Relationships: Drafting Employee Contracts

Martindale-Hubbell posed the following question to provide a variety of views on this important topic:
How do companies avoid common problems when drafting employment agreements?

In their eagerness to snare the perfect candidate, companies neglect critical elements of a successful employment agreement, including:

• Failure to incorporate reasonable post-employment restrictions. Prospective employees need to be aware of and agree to these prior to starting employment. Seeking restrictions afterward is not allowed in certain states without additional consideration.

• Ambiguity in compensation terms. Leaving the specifics of bonus plans and perks for later can be a prescription for disaster and can lead to breach-of-covenant of fair dealing litigation.

Finally, include a well-thought-through exit strategy such as termination, severance and mandatory arbitration provisions.