Texas is an “employment at will” or “right to work” state, meaning there’s no legal obligation for the employer and employee to have an employment contract. Employers and employees can terminate the employment relationship at any time for any reason. The exception: An employer cannot terminate an employee for an illegal reason (such as gender, age, or racial discrimination).
Employers Want Protection
An employment contract is not a requirement in the state of Texas, but many employers choose to use contracts to avoid misunderstandings and better protect themselves and their employees. Each company will have its own unique contract to meet the specific needs of its business, but in general, it’s good practice to make sure the contract includes the following five components:
- Delineated Position Description and Job Duties
The most basic need for an employment contract is to clearly delineate the position the employee is accepting and the job duties involved. This is the best defense against possible misunderstandings in which employees claim the job they are being asked to do is not the one for which they were hired.
This section is a good place to detail the performance expectations for the job. Best practice for future flexibility is to include “other duties as assigned” when describing the duties of the position.
- A Clear Compensation Package
Employee compensation includes salary, sick pay, vacation, health insurance, retirement plan, bonuses, and any other perk of employment. You should include signing bonuses, relocation reimbursement, and performance raises in this section. Be sure to detail whether benefits such as vacation and sick time are accrued or awarded at the beginning of each year.
- A Specified Contract Length
An employment contract can be open-ended, or it can specify a time covered by the contract. If a time period is specified, the employment will end at the date specified unless both parties decide to renew the contract and continue the employment relationship.
- Specified Grounds for Termination
The contract should specify the grounds for termination of employment. Some contracts may indicate that an employee terminated “without cause” will receive a specific severance package.
This area should detail what the employee’s responsibility is if he or she chooses to terminate employment. Most employees must return property issued by the company, such as a laptop computer, cell phone, vehicle, and identification badges.
- Any Additional Clauses
Additional clauses some businesses may want include confidentiality agreements, no compete clauses, and no solicitation clauses.
Writing up an employment contract is not a do-it-yourself project. The attorneys at Bennett, Weston, LaJone & Turner, P.C., can help draw up any type of contract your business may need.