Employees manufacture products, close sales and keep customers happy. Every new addition to a company’s workforce is potentially an opportunity for significant growth. Unfortunately, employees can easily do significant damage to a company’s operations.
They could embezzle from company accounts, sexually harass a coworker or do a very poor job that leads to customer lawsuits against the company. They might also go on to start a competing business or badmouth the company online after leaving. Employers often perform due diligence to reduce the risk of hiring problem employees, but no background check method is universally successful.
Companies also need to protect themselves from common sources of liability. The right inclusions in employment contracts can help to protect organizations from these common forms of worker misconduct.
1. Restrictive covenants
Special contract inclusions that specifically prohibit certain worker actions can be very beneficial for an organization. Non-solicitation agreements protect a company’s client list and workers from attempts to lure them away.
Noncompete agreements can prevent a professional from starting a directly competing organization or going to work for a local competitor. Non-disclosure agreements will help keep certain important business records confidential so that workers can’t publish information online or shared company details if such information would damage the organization’s reputation or operations.
Adding the right restrictive covenants to a contract can drastically reduce how much harm one employee can cause a business.
2. Conflict resolution rules
Although binding arbitration clauses have fallen out of favor because employees often distrust such arrangements, requiring mediation or direct negotiations before either party files a lawsuit can be a viable means of keeping employment law disputes private. Issues that employers can settle with their workers won’t lead to costly litigation or public disagreements that could damage the business’s reputation with the community.
Companies that include both conflict-resolution clauses and restrictive covenants in their employment contracts can reduce how much risk they assume when hiring a new worker. Discussing a company’s plans and functions with an attorney can help an organization implement the right contractual terms for optimal employment law protection.