Employment Agreements

Employment AgreementA properly drafted employment agreement can be a tremendous tool to set out the obligations and expectations of the employer and employee and to minimize the risk of future disputes. Since they are typically prepared at the outset of the employment relationship, this is the best time for the employer to memorialize the parties’ respective rights and obligations, and for the employee to utilize the leverage s/he has to negotiate for more favorable terms. The Atlanta employment agreement lawyers at Fidlon Legal are highly experienced at drafting and negotiating employment agreements for executives, professionals, business owners and others.

The following is a summary of key terms that should be included in most employment agreements:

1. Scope of Employment

  • Job title and responsibilities
  • Company’s right to modify employee’s responsibilities
  • Working hours and location
  • Employee’s ability to engage in outside business activities

2. Compensation

  • Base salary and any increases during the term of the contract
  • Circumstances under which base salary may be reduced
  • Any signing bonus
  • Quarterly or annual bonuses
  • Commissions

3. Equity Grants

  • Percentage of equity grant awarded
  • Form of equity used (e.g., stock options, stock appreciation rights, restricted stock)
  • Exercise price
  • Vesting period
  • Accelerated vesting upon termination
  • Exercise period following termination
  • Company’s right to repurchase shares upon termination

4. Benefits

  • PTO/vacation/sick leave entitlement, accrual and carryover
  • Health and medical
  • Disability
  • 401(k)
  • Pension
  • Cafeteria plan
  • Life insurance
  • Vision
  • Dental

5. Term and Termination

  • Employment term or employment “at will”
  • Grounds for termination by employer and employee
  • Definition of termination “for cause”
  • Severance in the event of termination without cause
  • Return of company property, documents and files

6. Reimbursement of Expenses

  • Relocation allowance
  • Types of expenses reimbursed by employer (e.g., car allowance, cell phone, travel, meals, mileage)
  • Timeframe for submission of expense reports and reimbursement

7. Liability

  • Directors’ and Officers’ (D&O) insurance coverage
  • Indemnification of employee for acts within scope of employment
  • Protection after employee is no longer employed by company

8. Confidentiality

  • Confidentiality and non-disclosure provisions
  • Invention assignment
  • Prohibition on use/disclosure of prior employer’s confidential or trade secret information

9. Post-Employment Restrictions

  • No use/disclosure of confidential information
  • Non-solicitation of customers and prospects
  • No raiding of employees
  • Non-compete

10. Dispute Resolution

  • Mandatory arbitration vs. lawsuit
  • Governing law
  • Location where disputes must be litigated/arbitrated

11. Change of Control/Golden Parachute

  • Benefits paid to employee upon takeover/change of control
  • Employer’s/employee’s right to terminate employment
  • Tax implications

12. Miscellaneous Provisions

  • Remedies for breach
  • Reimbursement of attorneys’ fees in the event of dispute
  • Entire agreement
  • Amendments must be in writing
  • Severability—invalid provisions don’t affect remaining provisions

An employment agreement is often the most important document between the employer and employee. It is therefore critical to ensure that is carefully drafted to protect your interests and comply with the law, that you understand everything you are agreeing to, and that you negotiate to obtain the most favorable terms. Whether you are a business owner looking to draft an employment agreement or an employee who has been presented with one, the Atlanta employment agreement attorneys at Fidlon Legal are ready to assist you.

DISCLAIMER: Material presented on this website is intended for informational purposes only. It is not intended as professional advice and should not be construed as such. Transmission of the information and material herein is not intended to create, and receipt does not constitute, an attorney-client relationship with Fidlon Legal or any member thereof.