McNamee Hosea News & Press


What Can Employment Contracts Protect?

People agree to the terms contracts more often than they probably realize. There are many products, services and relationships that come with some type of agreement that protects one or both parties involved in an exchange. In some cases, the stakes of agreeing to a contract seem relatively low, so people may not even skim the information provided

But when it comes to employment contracts, the stakes can be quite high, making it crucial that both an employer and employee thoroughly understand what it is they are agreeing to. 

Generally speaking, employment contract provisions are put in place to control information, assign roles and/or establish actions for terminating or enforcing the terms of a contract.

For example, contracts that are intended to control information can include provisions that protect confidential information from being shared, prohibit an employee from working at a direct competitor and specify ownership rights of an employee's inventions.

Contracts can also assign roles. For instance, they often clearly define an employee's job title and responsibilities, and may also ensure that an employee will perform a job as best as he or she is able. An employment contract may even include provisions that prevent an employee from serving in the same role for a different organization. There are also contracts that have "no authority to contract" provisions, which address the distinction between an employment relationship and an agency relationship.

There generally are also clauses in a contract that dictate what can happen if a contract is broken or comes to an end. For example, an arbitration clause can limit dispute resolution options only to arbitration. There may also be provisions written into a contract that specify the appropriate measures for resolving harassment or discrimination claims filed by an employee. A termination clause can establish when and if the terms of a contract or a person's employment can come to an end.

Employment contracts can be overwhelmingly complex and specific, but they can be powerful tools in protecting the rights of Maryland employers and employees. Employers would be wise to consult an attorney when drawing up a contract and employees may want to avoid signing anything before seeking legal advice. If a signed contract is in dispute, both parties will also want to seriously consider speaking with a lawyer.