The goal of an employment contract is to establish a working relationship between an employer and an employee. The vast majority of New Jersey workers, whether they are professionals or blue-collar, are at-will employees and do not have employment contracts. However, if you own or run a business and you want your employees to sign a contract, you should work with a business law attorney to draft a litigation-proof contract—to the extent that is possible. At Steinberg Law, we help employers write legal, binding contracts that protect them from potential wrongful termination litigation down the road.
Elements of a Strong New Jersey Employment Contract
Your contract should clearly define the terms and conditions of employment and can include anything else you think is important. However, you want to make sure the language is clear and that it does not violate New Jersey employment or anti-discrimination law.
Some of the most common elements of employment contracts include the following:
- Term and scope of employment. This section of the contract lays out the length of employment, which may be limited for a freelance or contract worker or indefinite for a traditional hire. It might also detail at which company location the employee will work, whether remote work is possible and/or necessary, and a timeline for completing training or certification requirements.
- Employee responsibilities. An outline of job duties should be unique to each position within the company, if not to each individual employee. This is the meat of the contract and should provide a detailed description of the work expected from the employee, an explanation of the criteria used for performance reviews, and possibly a timeline for setting and achieving goals.
- Compensation and benefits. This is the section where the employer lists their responsibilities to the employee in the form of a salary, schedule of salary increases, bonuses, and the benefits package, which may include health, dental, and vision insurance, retirement plans, life insurance, long-term disability insurance, health club memberships, a company car, company stock options, and a host of other perks.
- Non-compete and non-disclosure clauses. Especially common in the tech industry, these clauses prohibit the employee from disclosing company information to people outside the company and block the employee from working for a similar company or in a similar field for a certain amount of time after leaving employment. It is essential that these clauses are worded precisely so that they adhere to New Jersey employment law.
- Grounds for termination. The contract will also spell out what employee actions could constitute grounds for being fired, as well as under what circumstances the employee can choose to leave the company. Again, this section must be written clearly and be comprehensive in listing just causes for termination.
It is important that both the employer and employee know what they are agreeing to before an employment contract is offered or signed. If the terms of the contract are broken by either party, legal action could be warranted. It is also important for employers to understand when they might be bound by an unwritten contract such as a verbal agreement or an implied contract such as that provided by an employee handbook. When companies work with an experienced business and employment lawyer, all of these practices will be reviewed to ensure that you are protected from legal action as much as possible.
We Are Here to Help
A solid employment contract can go a long way to prevent legal action by an employee or former employee, but it’s only one step in the process. The best way to mitigate the risk of employee litigation is to focus on policy development, consistent practices, regular employee training, and prompt action when problems arise. Our business law team can help with all those steps.
When you invest the time and money in these processes upfront, you could save your company in the long run. Contact our Somerville office to learn more about how we can help.