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Employment law is a vast area of law with extensive federal, state, and local regulation. Employment law covers everything related to the employer-employee relationship. Employment law should not be confused with labor law, which is an entirely separate area of the law dealing with the negotiation process, unions, collective bargaining, and other issues regarding organized labor. As an employer, it is extremely important to have at least a rudimentary understanding of the basics of employment law and its provisions to protect your business.
Two critical areas for any employer or business owner to consider are hiring the right people and protecting the intellectual property / trade secrets that give your business a competitive advantage. To that end, employment contracts and NDAs can help protect the rights and interests of an employer. Both employment contracts and NDAs are legal contracts crafted by the employer to best protect their business. Let’s explore employment contracts and NDAs a little further and discuss what happens if there is a contract breach.
Employment contracts lay out the relationship between employer and employee. These contracts establish the parameters of what you expect of your employees and what the employees can expect in return from the company. An employment contract will frequently include provisions related to the scope of work, duration of employment, general responsibilities, work schedule, salary or wages, benefits, and employment being at-will or otherwise. Sometimes, an employment contract will include a stipulation regarding confidentiality and non-disclosure of sensitive, company-protected information. In other situations, it may be useful to have your employees sign a separate non-disclosure agreement, also known as an “NDA.”
NDA is an acronym for non-disclosure agreement. An NDA is a contract between employer and employee that protects the business’s trade secrets and/or proprietary information from being divulged by an employee. It is commonplace for companies in the tech field – as well as many other industries where proprietary technology and information distinguishes the business from its competitors – to require new employees to sign an NDA prior to or on the day of their employment start date.
Both NDAs and employment contracts are legally binding so it’s important to understand the critical elements to include while making sure to avoid penciling in illegal expectations. The point of employment contracts and NDAs being legal contracts is the protection afforded to either party should there be a contract breach by the other party. An employee’s breach of contract – or breaking the terms of the agreement – may cause significant damage to your business, especially when it comes to leaking trade secrets or misuse of sensitive information.
Employment lawyers can help employers navigate the extremely complex and shifting legal regulatory scheme in employment law. From writing your employee handbook to dealing with representatives from government agencies (especially when they show up unannounced at your door), employment lawyers can prevent your business from running afoul of the law and protect you from frivolous lawsuits. When you need to fire an employee or lay off part of your workforce, it is ideal to check with an employment attorney to make sure you are abiding by all the procedures and requirements in your state. Investigating an illegal harassment claim by an employee is not always a simple, straight-forward affair. An employment lawyer can advise you on whether you are in compliance with the law and conducting the investigation properly. In situations where there has been a breach of contract by an employee, an employment lawyer can suggest a practical course of action, depending on the type of breach.
Employment law is one of the most complex areas of the law. The landscape of employment law is a constantly evolving mash-up of federal, state, and local regulations. Keeping abreast of these changes can be exhausting and not an efficient use of an employer’s time. As an employer, enlisting the services of an employment attorney can be one of the best choices you make. Despite the expense of keeping a lawyer on payroll or retaining an independent employment lawyer as needed, the cost to an employer is likely justifiable. Being blindsided by a lawsuit could do significant damage to a business’s finances and reputation – something an employer would prefer to avoid.