Some Maryland readers might regard employment agreements as a hiring procedure that applies only to high-level executives. Yet in today’s modern workplaces — where employment disputes all too frequently erupt into litigation — many corporations in Maryland and nationwide have adopted employment agreements as standard practice.
Standard practice does not necessarily mean standard implementation, however. Employers and employees alike should take the time required to thoroughly review and negotiate all material provisions in an employment agreement.
As a preliminary matter, at least one commentator recommends consulting with an employment attorney before entering into negotiations. An outside voice can highlight provisions that might pose a risk, or other areas that should be included in an agreement. Should a dispute arise later, the terms of a well-drafted employment agreement may determine the outcome.
An employment agreement should also proactively plan for a wide variety of employment contingencies. For example, market volatility — especially in today’s fiscal climate — may require occasional labor adjustments, such as a reduction in force or relocation. An employment agreement that thoroughly describes the context and procedures for this personnel action may help to minimize the risk of a wrongful termination claim. Other material terms typically found in employment agreements may include salary information, equity-based compensation plan information, benefits and incentive policies, retirement benefits, severance, restrictive clauses, and best practices.
With the assistance of an employment agreement lawyer, an employer can ensure that all material employment terms are contained in an offer of employment. An attorney can also ensure that policies and procedures are consistent throughout all corporate communications, including employment agreements and employee handbooks.
Source: Forbes, “Negotiating an Employment Agreement,” Stacey Hawley, March 11, 2013