Making Business Happen

3 Valuable Inclusions for Texas Employment Contracts

On Behalf of | Aug 4, 2023 | Business And Commercial Litigation

Finding the right candidate for a vacant position at an organization can lead to profound relief or even excitement among managers and executives at that company. The right talent can help increase the company’s productivity or overall sales. They can help develop new technology or rebrand the organization for the better.

The skills and experience that they bring to the table may have a profound impact on the company’s future, but that new worker is also potentially a source of organizational liability. Therefore, it is of the utmost importance for organizations hiring new workers to include the right terms in contracts to limit the risk of future liability or employee litigation. The three contract inclusions below are popular among Texas employers for good reason.

Restrictive covenants

Especially when a company wants to hire an executive, manager, or other skilled professional, there may be concern about them misusing their role at the company or sharing trade secrets with others in the future. Restrictive covenants help companies limit that risk. Noncompete, nonsolicitation, and nondisclosure agreements are all popular contract inclusions that can limit a company’s risk of a new hire unfairly competing with the organization and thereby harming it in the future.

Digital and personal conduct policies

Including provisions in an employee contract that address someone’s online activity can be a very smart move. Companies may restrict workers from identifying their employer online or making any statements discussing the business’s operations on social media in special clauses. Some companies also include clauses discussing the personal behavior of their employees, such as imposing consequences for criminal convictions. Such policies can limit a company’s liability if they must take punitive actions over something that a worker does that could affect the company’s reputation.

Clear performance expectations and disciplinary policies

Companies that are very clear about what they expect from their workers and how they will communicate with them about failure to reach those expectations often have an easier time getting the best out of their workers. They also have less reason to fear push-back, like wrongful termination claims, if a worker ends up losing their job because of repeated disciplinary issues are poor performance. The more direct and clear an organization is when communicating its expectations to workers in its contracts and outlining how it will evaluate whether the workers meet those metrics, the less likely workers are to claim that the company engaged in some kind of misconduct.

Ultimately, creating custom employment contracts for different roles within an organization can be an important step toward limiting the liability that results from onboarding new recruits.