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What Is an Assignment of Contract?

Assignment of Contract Explained

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Assignment of contract allows one person to assign, or transfer, their rights, obligations, or property to another. An assignment of contract clause is often included in contracts to give either party the opportunity to transfer their part of the contract to someone else in the future. Many assignment clauses require that both parties agree to the assignment.

Learn more about assignment of contract and how it works.

What Is Assignment of Contract?

Assignment of contract means the contract and the property, rights, or obligations within it can be assigned to another party. An assignment of contract clause can typically be found in a business contract. This type of clause is common in contracts with suppliers or vendors and in intellectual property (patent, trademark , and copyright) agreements.

How Does Assignment of Contract Work?

An assignment may be made to anyone, but it is typically made to a subsidiary or a successor. A subsidiary is a business owned by another business, while a successor is the business that follows a sale, acquisition, or merger.

Let’s suppose Ken owns a lawn mowing service and he has a contract with a real estate firm to mow at each of their offices every week in the summer. The contract includes an assignment clause, so when Ken goes out of business, he assigns the contract to his sister-in-law Karrie, who also owns a lawn mowing service.

Before you try to assign something in a contract, check the contract to make sure it's allowed, and notify the other party in the contract.

Assignment usually is included in a specific clause in a contract. It typically includes transfer of both accountability and responsibility to another party, but liability usually remains with the assignor (the person doing the assigning) unless there is language to the contrary.

What Does Assignment of Contract Cover?

Generally, just about anything of value in a contract can be assigned, unless there is a specific law or public policy disallowing the assignment.

Rights and obligations of specific people can’t be assigned because special skills and abilities can’t be transferred. This is called specific performance.   For example, Billy Joel wouldn't be able to transfer or assign a contract to perform at Madison Square Garden to someone else—they wouldn't have his special abilities.

Assignments won’t stand up in court if the assignment significantly changes the terms of the contract. For example, if Karrie’s business is tree trimming, not lawn mowing, the contract can’t be assigned to her.

Assigning Intellectual Property

Intellectual property (such as copyrights, patents, and trademarks) has value, and these assets are often assigned. The U.S. Patent and Trademark Office (USPTO) says patents are personal property and that patent rights can be assigned. Trademarks, too, can be assigned. The assignment must be registered with the USPTO's Electronic Trademark Assignment System (ETAS) .  

The U.S. Copyright Office doesn't keep a database of copyright assignments, but they will record the document if you follow their procedure.

Alternatives to Assignment of Contract

There are other types of transfers that may be functional alternatives to assignment.

Licensing is an agreement whereby one party leases the rights to use a piece of property (for example, intellectual property) from another. For instance, a business that owns a patent may license another company to make products using that patent.  

Delegation permits someone else to act on your behalf. For example, Ken’s lawn service might delegate Karrie to do mowing for him without assigning the entire contract to her. Ken would still receive the payment and control the work.

Do I Need an Assignment of Contract?

Assignment of contract can be a useful clause to include in a business agreement. The most common cases of assignment of contract in a business situation are:

• Assignment of a trademark, copyright, or patent
• Assignments to a successor company in the case of the sale of the business
• Assignment in a contract with a supplier or customer
• Assignment in an employment contract or work for hire agreement

Before you sign a contract, look to see if there is an assignment clause, and get the advice of an attorney if you want to assign something in a contract.

Key Takeaways

• Assignment of contract is the ability to transfer rights, property, or obligations to another.
• Assignment of contract is a clause often found in business contracts.
• A party may assign a contract to another party if the contract permits it and no law forbids it.

Legal Information Institute. " Assignment ." Accessed Jan. 2, 2021.

Legal Information Institute. " Specific Performance ." Accessed Jan. 2, 2021.

U.S. Patent and Trademark Office. " 301 Ownership/Assignability of Patents and Applications [R-10.2019] ." Accessed Jan. 2, 2021.

Licensing International. " What is Licensing ." Accessed Jan. 2, 2021.

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Employment Contract Agreement Template

Free Simple Employment Contract Sample

• • Duties and responsibilities
• • Pay and compensation
• • Working hours and benefits

What is a simple employment contract, and why is it important?

An employment contract is a legally binding agreement between employer and employee that lays out the terms and conditions for all parties to have a successful working relationship.

What could have easily been mitigated with a contract can spiral into lawsuits and damaged reputations.

DISCLAIMER : We are not lawyers or a law firm and we do not provide legal, business or tax advice. We recommend you consult a lawyer or other appropriate professional before using any templates or agreements from this website.

Grab a copy of our Simple Employment Contract sample

The benefit of having a basic employment contract, the elements of an effective, simple employment agreement, 1. role duties and responsibilities of employee.

• • Prospecting and cleaning contact database for new leads
• • Arranging meetings and presentations to show a product to potential clients
• • Assisting lead sales consultants to administrative duties
• • Working to KPIs and revenue targets set by sales director

2. Pay and compensation

3. employee benefits, 4. working hours and location, 5. termination, faq about our basic employment contract, employment contract agreement, duties and responsibilities.

• ________________________________

Pay and Compensation

Working hours and location, term of agreement, termination.

• Immediately in case one of the Parties breaches this Agreement.
• At any given time by providing a written notice to the other party ______________ days prior to terminating the Agreement.

Confidentiality

Intellectual property, exclusivity, limitation of liability, severability, governing law, alternative dispute resolution, attorney fees, entire agreement, signature and date, related proposals and templates.

• Intellectual Property Agreement Template
• Non-Disclosure Agreement Template
• Retainer Agreement Template
• Contractor Proposal Template
• Internship Contract Agreement

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Legal Templates

Home Business Employment

Employment Contract Templates

Use our Employment Contract to hire an employee for your business, and define details like wages and working hours.

Updated May 14, 2024 Written by Josh Sainsbury | Reviewed by Brooke Davis

An Employment Contract (or employment agreement) is a legally binding agreement between an employer and employee that defines compensation, duration, benefits, and other conditions of the employment relationship. It outlines the rights and responsibilities of both parties during the employee’s tenure.

Employment Contract Key Takeaways

• A legal agreement between the employee and employer
• Outlines responsibilities, compensation, and benefits
• Different types of employment contracts for different work statuses
• Connecticut
• District of Columbia
• Massachusetts
• Mississippi
• New Hampshire
• North Carolina
• North Dakota
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• West Virginia
• By Employee Types (9)

Use a freelance contract to hire self-employed workers for your business or a specific project.

Hire temporary or seasonal staff, with clear terms on pay and set duration until the contract's end.

Create a contract between a company and a contractor with an independent contractor agreement.

Independent Contractor

Use an Internship Agreement to ensure both parties know what is expected of them if you’re hiring an intern.

List the responsibilities, expectations, and rights of the employer and part-time employee.

For employees who will work regular hours (part-time or full-time), are paid a salary or hourly rate, and are ongoing until terminated by either the employer or the employee.

A document used when the contractor on a project needs to subdivide the contract and assign part of the work to other companies or individuals

Subcontractor

For employees that work part-time or full-time and are employed for a fixed period of time or are employed temporarily with no fixed end date but termination is expected on notice.

Hire employees without guaranteeing any specific working hours.

• By Contract Terms (4)

Hire an employee that works with no set end date.

Use it to protect a company's competitive advantage by restricting an employee or former employee from working for a competitor.

Non-Compete Agreement

Non-Disclosure Agreement

Use it to outline the terms of the end of an employer-employee relationship.

• By Profession (3)

Use a Dentist Employment Contract iff you need to hire more dentists to help serve your clients.

Outlines contractual obligations and expectations between a usually highly compensated executive and an employer. It is typically negotiated between the two parties and can involve legal assistance.

Outlines a relationship between a staffing agency and a company to recruit and staff.

Staffing Agency

• Employment Contract Sample

What is an Employment Contract?

What does an employment contract include, standard clauses in employment contracts, how to hire an employee, how to write an employment contract, frequently asked questions.

An employment contract recognizes a  legal business relationship  between an  employer  and an  employee . The employment contract outlines the rights and responsibilities of both parties for the duration of employment.

For example, the functions an employee will perform and the wages the employer agrees to pay in return.

Before issuing an Employment Agreement, you should request that the candidate provide an  Employment Verification Letter  to verify their income and employment history.

Spanish Template

If you’re seeking an employment contract in Spanish, use our Contrato de Trabajo .

An employment contract will identify the following essential elements:

• Employee Details : Identifying information for the employee, including address, phone number, email address, and any other demographic information.
• Responsibilities : Title and description of employee’s role/s and day-to-day responsibilities.
• Compensation : Amount paid per hour, week, or month, including overtime, bonus(es), commission, and the compensation schedule.
• Start Date : When the employee will start working for the employer.
• Duration of Employment : An amount of time how long an employee agrees to work. In some cases, it might be indefinite; in others, an employee might be expected to perform a fixed amount of time. For example, you may have all new employees sign a 1-year employment contract with an option for extension upon review.
• Benefits : Details about disability protection, health insurance, vacation, sick days, paid time off (PTO), maternity leave, and other benefits.
• Probationary Period : The employee is essentially “on trial” and may be terminated if deemed unsuitable.
• Termination : The reasons why the employment relationship may be ended.
• Work for Hire Clause : Anything created by the employee at work belongs to the company.
• Data Protection: This will give the rules and procedures regarding the company’s data privacy policies. The employer must ensure they abide by the government’s Privacy Act . Confidentiality: Similar to data protection sections, confidentiality sections cover how the employer plans to safeguard any employee information.

Documenting clear expectations, job responsibilities, and employment agreements allows employers to discipline and fire employees who do not meet work performance standards.

An employment contract offers legal protection to both an employee and an employer. If a dispute arises, both parties can refer to the original terms agreed to at the beginning of the working relationship.

By drafting an employment contract today, avoid mistreatment and legal repercussions for both parties.

You may want to include additional clauses to help protect business interests:

• Confidentiality : A non-disclosure agreement or confidentiality agreement specifies that trade secrets, client lists, and sensitive information cannot be shared while working for this employer or future employers.
• Non-compete : A non-compete agreement prohibits the employee from working for competing companies or competing with the employer if they leave, including misusing confidential information.
• Non-solicitation : Employees may not recruit other co-workers to join them when they leave the company. Furthermore, the employee cannot ask the company’s clients or customers to follow them to their new company. However, if you live in California, Montana, North Dakota, and Oklahoma, restrictive covenants are not allowed, and employees are allowed to work for competitors.

IRS Requirements

If you’re a US company hiring citizens and residents, there are IRS requirements you need to follow:

• IRS Form W-4 – To be completed by employees at the start of employment.
• IRS Form W-9 – To be completed by independent contractors at the start of employment (if more than $600 is to be paid for services or labor).

The best way to hire an employee is to follow these simple steps:

Step 1 – Place a Job Listing

Make an employment posting that details your expectations of the individual and the job’s compensation. In some states, you must disclose the pay range in job postings due to pay transparency laws . Also, include an Equal Opportunity Statement in your job posting to encourage applicants from diverse backgrounds to apply.

You have several options for posting job listings. Many employers use online job sites like LinkedIn , Indeed , CareerBuilder , or Monster . Recruiters also can assist with finding eligible candidates for any vacant roles in your company. Maximize visibility by sharing your job listing on social media.

Step 2 – Review Applications

Filter through the received job applications, setting aside the ones that meet the job’s essential requirements. To narrow down the pool, you can run applications through AI tools. Data extraction programs scan resumes to search for specific keywords. The program can eliminate applicants who don’t have the experience or education required for the role.

Step 3 – Start the Interview Process

Set up interviews with the top candidates. You need to know the person behind the application and whether they will fit your company well. A phone chat works best for an initial interview to review the job’s basics. Avoid wasting your and the applicant’s time if the salary and expectations don’t work for either party.

If any phone interviews go well, you can move on to a formal interview in person or via video chat. Come up with a list of questions that touch upon:

• Accomplishments
• Career goals
• Hard and soft skills
• Strengths and weaknesses

Step 4 – Check References and Run a Background Check

Checking references is a great way to verify applicants and gain additional insights into their work experience and qualifications. Background checks alert you to past criminal issues that could affect the person’s candidacy. You also want to confirm that the person is legally eligible to work in the United States. An I-9 form will verify employee eligibility.

Step 5 – Prepare an Offer Letter

Once you’ve chosen the perfect candidate, send them an employment offer letter . The employment offer letter typically states:

• Disclosures such as NDA or Non-Compete

Based on the inclusions, the candidate may wish to negotiate terms before agreeing.

Minimum Wage

Most states have created and enforced laws that exceed the federal minimum wage under the Fair Labor Standards Act (FSLA).

Step 6 – Notify Rejected Candidates

Send an employment rejection letter to inform unsuccessful applicants of the bad news respectfully. Not all employers offer the courtesy, but it’s good practice to notify other candidates as soon as possible you don’t plan to move forward.

Step 7 – Complete and Sign the Employment Contract

Once you and the candidate have discussed the terms, you can present the employment contract. When the contract is signed, you may want a notary public present for top-level positions.

Here’s a step-by-step to writing an employment contract:

Step 1 – Initial Details

a) List the date this agreement is being made.

b) Provide the full name of the employee and the full name of the company or individual employing the employee.

c) Provide the employee’s job title or position.

d) Choose whether the employee will be employed part-time or full-time.

e) Describe the job duties the employee will be responsible for.

Step 2 – Term and Probationary Period

a) Choose whether the employment will be fixed, at will, or probationary:

• Fixed term if there is a specific end date to the agreement and employment.
• At will, unless there is no end date to the agreement, so unless otherwise stated, either party can terminate the contract without notice.

b) Choose whether or not there will be a trial period where an employee may be released if they cannot meet the job requirements. This typically lasts for three to six months.

Step 3 – Compensation

a) List the employee’s salary here and how the payment will accumulate.

b) Check the frequency at which the employee’s salary will be paid.

Step 4 – Overtime and Additional Compensation

a) If the employee will receive overtime compensation, choose this option and list how much will be paid and describe what frequency constitutes overtime.

b) Choose this option if the employee will not receive overtime pay. Be sure to check federal and state laws to determine whether or not overtime is mandatory in your situation.

c) Choose this option and explain any commission received for services rendered under this agreement.

d) Choose this option and explain any other commissions received for services rendered under this agreement.

Step 5 – Expenses and Work Location

a) Check if the employer will reimburse an employee for the expense(s).

b) Check all expenses that the employer will reimburse the employee for.

c) List the full address where the employee will perform their duties under this agreement.

d) List the required work days and hours.

Step 6 – Time Off

a) This option lists specific paid time off days allowed.

b) Choose this option to default to state and local law requirements for paid time off.

c) This option lists a certain number of paid sick days allowed.

d) Choose this option if the employee is not provided any sick leave.

e) This option lists a certain number of paid personal days allowed.

f) Choose this option if employees are not provided paid personal leave days.

g) List any other benefits provided.

h) Check if there is an employee handbook to refer to that will provide additional information about the employer’s leave policy.

Step 7 – Disability

a) List how many days that employee cannot perform their duties that constitute consideration for disability benefits.

b) Specify the amount of compensation due to the employee.

Step 8 – Non-Compete and Confidentiality

a) Initial here if you want to include this clause. Otherwise, cross it out.

b) Choose if the non-compete will remain in force for the entirety of the employment agreement and will end when the agreement is terminated or if the non-compete will stay in power beyond the termination of employment and list how many months it will remain in force beyond termination.

c) Check which activities are prohibited by the non-compete.

d) Choose this option if the employee is not exposed to sensitive information unknown to the general public.

e) Choose this option if the employee can access competitively sensitive information unknown to the general public.

Step 9 – Termination

a) Choose this if the employer can terminate the employment without cause.

b) Check if notice by the employer to the employee is required and list how many days’ notice is required.

c) Choose this option if the employee may terminate this agreement at any time but with written notice. List how many days’ notice is required.

d) Choose this option if the employee can terminate this employment agreement anytime and for any reason.

Step 10 – Severance

a) Choose this if the employee will be entitled to severance if terminated for reasons other than cause.

b) Choose this option if the employee is not entitled to severance after termination.

c) Check all applicable documents that set forth the rights and obligations of the parties.

Step 11 – Miscellaneous

a) List the state laws governing this agreement.

b) Choose this if litigation is a dispute resolution option and list the state where the dispute will be resolved.

c) Choose this if parties agree that the prevailing party will be entitled to recover its expenses incurred with any action taken regarding this agreement.

d) Choose arbitration if disputes will be resolved by a neutral third party selected by the parties, who evaluate the argument and determine a settlement. The decision by the arbitrator is final and binding.

e) Choose mediation if disputes will be resolved by using a mediator, a neutral third party selected by the parties who try to facilitate a compromise and agreement. The decision by the mediator is non-binding.

f) Choose this option if you wish to mediate first, and then if a resolution is not found, the arbitration will be pursued.

Employment Contract Example

The employment agreement example below details an agreement between the employer, Susan C Clarke, and the employee, Rudolph M Hettinger. Susan C Clarke agrees to employ Rudolph M Hettinger as a Personal Assistant.

This sample letter of agreement between employer and employee Susan C Clarke and Rodolph M Hettinger will become legally binding once both parties sign.

Note: You should use an Independent Contractor Agreement if hiring a business or self-employed person to accomplish a short-term project or task.

Read More : Independent Contractor vs. Employee

What is a Standard Employment Contract?

A standard employment contract is a legal agreement that covers the rights and responsibilities of both the employee and employer. The standard contract covers the expected job duties of the employee and the duration of their employment.

How do I Legally Hire an Employee?

Companies must have an assigned EIN before hiring new employees. Report new hires to your state’s registry by having each fill out a W-4 before starting work.

Is it Mandatory to Sign an Employment Contract?

No, employees can’t get forced into signing an employment contract. Under many state laws, verbal agreements between parties can also be employment contracts. However, oral agreements can prove challenging to prove in court.

Can an Employment Contract be Changed After it is Signed?

An employment contract can be amended, but a new one needs to be drawn up. The former agreement would become null and void. Both parties must agree to the terms and sign the new contract.

What Happens if an Employment Contract is Breached?

A court claim may be filed if one party fails to abide by the employment agreement terms. A breach of contract may allow the party to seek compensatory damages for any financial losses. The court could also order specific actions, like contract reformation.

What Documents Are Required When Hiring a New Employee?

The following are the basic documents you need to hire a new employee:

• W-4 or W-9 tax form
• I-9 employment verification
• Specific state tax withholding forms

What is a Typical Probationary Period for a New Employee?

A probationary period is between three and six months. This is usually a good time to see if a new employee fits your company.

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This employment agreement is between , an individual a(n) (the " Company ") and , an individual (the " Employee ").

The Company is engaged in the business of .

The Company desires to employ the Employee, and the Employee wishes to enter into that employment, as set forth in this agreement.

The parties therefore agree as follows:

1. EMPLOYMENT.

• (a) Position . The Company hereby employs the Employee in the position of and the Employee hereby accepts this employment as of the effective date (as defined in section , the "Effective Date" ). During his or her employment with the Company, the Employee shall devote his or her best efforts and substantially all of his or her business time and attention (except for vacation periods and reasonable periods of illness or other incapacities permitted by the Company's general employment policies) to the business of the Company.
• (b) Duties. The Employee shall perform duties that are customarily associated with his or her then-current title, consistent with the operating agreement bylaws organizing documents organizing documents organizing documents organizing documents of the Company and as required by the Company. The Employee shall perform his or her duties at any place or places as the Company reasonably designates.
• (c) Company Policies. The employment relationship between the parties will also be governed by the general employment policies and practices of the Company. If any terms of this agreement differ from or conflict with the Company's general employment policies or practices, this agreement will control.
• (d) At-Will Status. THE EMPLOYEE ACKNOWLEDGES THAT EMPLOYMENT WITH THE COMPANY IS FOR AN UNSPECIFIED DURATION AND CONSTITUTES "AT-WILL" EMPLOYMENT. THE EMPLOYEE FURTHER ACKNOWLEDGES THAT THIS EMPLOYMENT RELATIONSHIP MAY BE TERMINATED AT ANY TIME, WITH OR WITHOUT GOOD CAUSE OR FOR ANY OR NO CAUSE, AT THE OPTION OF EITHER THE COMPANY OR THE EMPLOYEE, WITH OR WITHOUT NOTICE.

2. TERM AND TERMINATION.

• (a) Term. The term of this agreement will begin on and continue until terminated by either party in accordance with subsection (b) or by law. The period during which the Employee is employed under this agreement is referred to as the " Employment Period ."
• (b) Termination. Either party may, at any time, with or without cause, terminate this agreement by giving days' written notice to the other party. If requested by the Company, the Employee shall continue to render his or her services pursuant to this agreement during this notice period, and will be paid his or her regular compensation until the last day of the Employee's employment (the "Termination Date" ). On the Termination Date, the Company shall pay the Employee a severance allowance of $ . Any amounts outstanding or owed by the Employee to the Company may be deducted from this severance allowance.

3. COMPENSATION.

The Employee will be compensated for his or her services as follows:

• (a) Base Salary. The Company shall pay the Employee an annual base salary of $ (the "Salary" ), payable in equal monthly bimonthly semi-monthly weekly biweekly installments at the end of each period during the Employment Period. The Salary may be subject to increases, as those may be determined from time to time by the Company.
•   (b) Signing Bonus. Within days of the effective date, the Employee shall receive a sign-on bonus of $ . If the Employee is terminated for cause or if the Employee terminates employment within year(s) of the Effective Date, the Employee must make a pro-rated repayment of the sign-on bonus.
• (b) (c)   Incentive Compensation.   In accordance with the Company's practices, policies, and procedures, the Employee may be eligible for a discretionary bonus award (the " Bonus "). The Bonus, if any, will be based on the performance of the Company and the Employee and will be subject to typical payroll deductions and withholdings. A Bonus is not guaranteed compensation.
• (b) (c) (c) (d) Other Nonmonetary Benefits.  The Employee is entitled to certain other nonmonetary benefits, including vacation days, sick days, holidays, and paid time off, and medical plan   and    and  dental plan   and  other : , in accordance with Company policies, which may be amended from time to time.
• (c) (d) (d) (e) Stock Options. After full year(s) of employment, the Employee will be considered for participation in the Company's stock option plan in accordance with the terms of that plan.
• ( c d d d e e e f ) Withholding. All sums payable to the Employee under this agreement will be reduced by federal, state, local, and other withholdings and similar taxes and payments required by applicable law.

4. OTHER EMPLOYMENT.

The Employee shall devote all of his or her time and attention solely to the Company's business and interest. During the Employment Period, the Employee may not engage, directly or indirectly, in any other business activity, regardless of whether it is pursued for gain or profit. Nothing in this section 4 limits the Employee's right to invest his or her money in real estate or in other companies if that investment does not oblige the Employee to assist in the operation of the affairs of those companies.

5. EXPENSES.

The Company shall reimburse the Employee for all business expenses incurred by the Employee in connection with his or her duties under this agreement in accordance with the Company's normal policies. The reimbursement of these expenses is subject to the Employee's provision to the Company of receipts, statements, and vouchers to the Company's satisfaction.

6. CONFIDENTIALITY.

• (a) Confidentiality. During the Employment Period, the Employee may have access to or receive certain information about the Company that the Company designates as confidential or that, under the circumstances surrounding disclosure, ought to be treated as confidential by the Employee (" Confidential Information "). Confidential Information includes information relating to the Company or its current or proposed business, financial statements, budgets and projections, customer identifying information, potential and intended customers, employers, products, computer programs, specifications, manuals, software, analyses, strategies, marketing plans, business plans, and other confidential information, provided orally, in writing, by drawings, or by any other media. The Employee will treat the Confidential Information as confidential and will not disclose it to any third party or use it for any purpose but to fulfill his or her obligations in this agreement. In addition, the Employee shall use due care and diligence to prevent the unauthorized use or disclosure of that information.
• (i) was or becomes publically available other than as a result of a disclosure by the Employee in violation of this agreement;
• A. the source of that information is not bound by a confidentiality agreement with the Company or
• is not otherwise prohibited from transmitting the information to the Employee by a contractual, legal,
• fiduciary, or other obligation; and
• B. the Employee provides the Company with written notice of his or her prior possession either (I)
• before the effective date of this agreement or (II) if the Employee later becomes aware (through
• disclosure to the Employee) of any aspect of the Confidential Information as to which the Employee
• had prior possession, promptly on the Employee so becoming aware;
• A. provide the Company with prompt notice of these requests or requirements before making a
• disclosure so that the Company may seek an appropriate protective order or other appropriate
• remedy; and
• B. provide reasonable assistance to the Company in obtaining a protective order.
• If a protective order or other remedy is not obtained or the Company grants a waiver under this agreement, the Employee may furnish that portion (and only that portion) of the Confidential Information that, in the written opinion of counsel reasonably acceptable to the Company, the Employee is legally compelled or otherwise required to disclose. However, the Employee shall make reasonable efforts to obtain reliable assurance that confidential treatment will be accorded any part of the Confidential Information disclosed in this way; or
• (iv) was developed by the Employee independently without breach of this agreement.
• (i) Confidentiality. At all times during his or her employment with the Company, the Employee shall hold in strictest confidence, and not use, except for the benefit of the Company, or to disclose to any person, firm, or corporation without the prior written authorization of the Company, any of the Company's Confidential Information.
• (ii) Term. The Employee shall maintain the confidentiality and security of the Confidential Information until the earlier of: (A) such time as all Confidential Information disclosed under this agreement becomes publicly known and is made generally available through no action or inaction of the Employee or (B) the  anniversary of the termination of the Employee's employment with the Company. However, to the extent that the Company has disclosed information to the Employee that constitutes a trade secret under law, the Employee shall protect that trade secret for as long as the information qualifies as a trade secret.
• (d) Remedy. Money damages may not be a sufficient remedy for a breach of this section by the Employee and, in addition to all other remedies, the Company may seek (and may be entitled to) as a result of that breach, specific performance and injunctive or other equitable relief as a remedy.

7. INVENTIONS.

• (a) Inventions Retained and Licensed. Attached as Exhibit A to this agreement is a list of all intellectual property that the Employee made before his or her employment with the Company (the "Prior Inventions" ) that belong to the Employee, that relate to the Company's proposed business, products, or research and development, and that are not assigned to the Company under this agreement. If no list is attached, the Employee represents that there are no Prior Inventions. If disclosure of any Prior Invention would cause the Employee to violate a prior confidentiality agreement, the Employee will not list the Prior Invention in Exhibit A but will provide a name of the invention, a list of the party or parties it belongs to, and the explanation why full disclosure was not given. A space is provided in Exhibit A for this purpose. If in the course of employment with the Company, the Employee incorporates into a Company product, process, or machine a Prior Invention owned by the Employee or in which the Employee has an interest, the Company will be granted and have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use, and sell that Prior Invention as part of or in connection with that product, process, or machine.
• (i) while the Employee is or was performing duties for the Company;
• (ii) during the Employee's employment with the Company, if it relates to the Company's areas of business or investigations;
• (iii) that results from or is suggested by any work that the Employee does for the Company or at the Company's request; or
• (iv) that was aided by the Employee's use of the Company's equipment, supplies, facilities, or trade secret information, whether or not during working hours.
• This Employee-created intellectual property is referred to in this agreement as "Inventions."
• The Employee acknowledges that any Invention the Employee makes within the scope of and during his or her employment with the Company and that is protectable by copyright is a "work made for hire," as that term is defined in the United States Copyright Act.
• (c) Maintenance of Records. The Employee shall keep and maintain adequate and current written records of all Inventions the Employee makes (solely or jointly with others) during the term of employment with the Company. The records may be in the form of notes, sketches, drawings, and any other format specified by the Company. The records will be available to and remain the sole property of the Company at all times.
• (d) Patent and Copyright Registrations. The Employee shall help the Company or its designee, at the Company's expense, secure the Company's rights in the Inventions and any copyrights, patents, mask work rights, or other intellectual property rights relating to the Inventions in all countries, including by disclosing to the Company all pertinent information and data about any of those, by signing all applications, specifications, oaths, assignments, and all other instruments that the Company may deem necessary to apply for and obtain those rights and to assign and convey to the Company, its successors, assigns, and nominees the exclusive interest in those Inventions, and any copyrights, patents, mask work rights, or other intellectual property rights relating to those. When it is in the Employee's power to do so, his or her obligation to sign or cause to be signed any such instrument or papers will continue after the termination of this agreement. If because of the Employee's mental or physical incapacity or for any other reason the Company cannot secure a signature to apply for or pursue any application of any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, the Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as the Employee's agents and attorneys in fact, to act for and on behalf of the Employee to sign and file those applications and do all other lawfully permitted acts to further the prosecution and issuance of patent or copyright registrations on them with the same legal force and effect as if signed by the Employee.

8. RETURN OF PROPERTY.

Within days of the expiration or earlier termination of this agreement, the Employee shall return to the Company, retaining no copies or notes, all Company products, samples, models, property, and documents relating to the Company's business including reports, abstracts, lists, correspondence, information, computer files, computer disks, and other materials and copies of those materials obtained by the Employee during and in connection with his or her work with the Company. All files, records, documents, blueprints, specifications, information, letters, notes, media lists, original artwork or creative work, notebooks, and similar items relating to the Company's business, whether prepared by the Employee or by others, remain the Company's exclusive property.

9. USE OF TRADEMARKS.

The Company may use, reproduce, and distribute the Company's service marks, trademarks, and trade names (if any) (collectively, the "Company Marks" ) in connection with his or her employment. Any goodwill received from this use will accrue to the Company, which will remain the sole owner of the Company Marks. The Employee may not engage in activities or commit acts, directly or indirectly, that may contest, dispute, or otherwise impair the Company's interest in the Company Marks. The Employee may not cause diminishment of value of the Company Marks through any act or representation. The Employee may not apply for, acquire, or claim an interest in any Company Marks, or others that may be confusingly similar to any of them, through advertising or otherwise. At the expiration or earlier termination of this agreement, the Employee will have no further right to use the Company Marks, unless the Company provides written approval for each use.

10. NONSOLICITATION.

During the Employment Period and for a period of year(s) after, the employee may not:

• (a) canvass or solicit the business of (or procure or assist in the canvassing or soliciting of) any client, customer, or employee of the Company who is known to the Employee because of his or her association with the Company during the Employment Period for the purposes of competing with the Company;
• (b) accept (or procure the acceptance of) business from a client, customer, or employee of the Company known to the Employee because of his or her association with the Company during the Employment Period for purposes of competing with the Company. However, the Company may consent to this competition in writing; or
• (c) otherwise contact, approach, or solicit (or procure the contacting, approaching, or soliciting of) an entity known to the Employee because of his or her association with the Company before the Effective Date in a way that could be detrimental to the Company.

11. NONCOMPETITION.

At the end of the Employment Period, by expiration or termination, the Employee may not engage, own, manage, control, operate, be employed by, participate in, or be connected with the ownership, management, operation, or control of a business similar to the type of business conducted by the Company for a period of years and within miles from the present location(s) of the Company's business. If the Employee breaches or threatens to breach this section, the Company will be entitled to a preliminary restraining order and injunction preventing the Employee from violating its provisions. Nothing in this agreement prohibits the Company from pursuing any other available remedies for a breach or threatened breach, including the recovery of damages from the Employee.

12. FIDELITY BOND.

At the beginning of the Employment Period, the Employee shall apply for a fidelity or surety bond from a company and in amounts that the Company may specify in its sole discretion. The Company shall pay all premiums on this bond. The bond will continue in force and in the amounts as the Company requires. If the bond is refused or is ever canceled without the Company's prior written approval, the Employee's employment may be terminated immediately and the Employee will be entitled to compensation to the date of that termination only.

13. DEATH DURING EMPLOYMENT.

If the Employee dies while employed by the Company, the Company shall pay to the Employee's estate any Salary otherwise payable to the Employee, up to the end of the month in which his or her death occurs. In addition, the Company shall pay $ to the Employee's widow or widower, or, if he or she is not survived by a spouse, to the Employee's surviving children in equal shares, or, if he or she is not survived by any children, to the Employee's estate, within days of the Employee's death.

14. INDEMNIFICATION.

• (i) the Employee's negligence or willful misconduct arising from the Employee's carrying out of his or her obligations under this agreement; or
• (ii) the Employee's breach of any of his or her obligations or representations under this agreement.
• (i) the Company's operation of its business;
• (ii) the Company's breach or alleged breach of, or its failure or alleged failure to perform under, any agreement to which it is a party; or
• (iii) the Company's breach of any of its obligations or representations under this agreement. However, the Company is not obligated to indemnify the Employee if any of these Claims result from the Employee's own actions or inactions.

15. FORCE MAJEURE.

A party will not be considered in breach or in default because of, and will not be liable to the other party for, any delay or failure to perform its obligations under this agreement by reason of fire, earthquake, flood, explosion, strike, riot, war, terrorism, or similar event beyond that party's reasonable control (each a " Force Majeure Event "). However, if a Force Majeure Event occurs, the affected party shall, as soon as practicable:

• (a) notify the other party of the Force Majeure Event and its impact on performance under this agreement; and
• (b) use reasonable efforts to resolve any issues resulting from the Force Majeure Event and perform its obligations under this agreement.

16.   ARBITRATION; EQUITABLE RELIEF. CHOICE OF LAW; ATTORNEYS' FEES; EQUITABLE RELIEF.

• (a) ARBITRATION. EXCEPT AS PROVIDED IN SECTION (b) BELOW, ANY DISPUTE OR CONTROVERSY ARISING OUT OF, RELATING TO, OR CONCERNING THE INTERPRETATION, CONSTRUCTION, PERFORMANCE, OR BREACH OF THIS AGREEMENT WILL BE GOVERNED BY LAW AND SETTLED BY ARBITRATION TO BE HELD IN  (a) Choice of Law. The laws of the state of govern this agreement (without giving effect to its conflicts of law principles). COUNTY, , IN ACCORDANCE WITH THE THEN-EFFECTIVE RULES OF THE AMERICAN ARBITRATION ASSOCIATION. THE ARBITRATOR MAY GRANT INJUNCTIONS OR OTHER RELIEF IN THAT DISPUTE OR CONTROVERSY. THE DECISION OF THE ARBITRATOR WILL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. JUDGMENT MAY BE ENTERED ON THE ARBITRATOR'S DECISION IN ANY COURT HAVING JURISDICTION. THE PARTIES SHALL EACH PAY ONE-HALF OF THE COSTS AND EXPENSES OF THAT ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY COUNSEL FEES AND EXPENSES.
• (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in County, .
• (c) Attorneys' Fees. If either party employs attorneys to enforce any rights arising out of or relating to this agreement, the losing party shall reimburse the prevailing party for its reasonable attorneys' fees.
• (d) Equitable Relief. The Employee's breach of this agreement will cause irreparable harm to the Company and monetary damages may not be a sufficient remedy for an unauthorized disclosure of the Confidential Information. If the Employee discloses the Confidential Information in violation of this agreement, the Company may, without waiving any other rights or remedies and without posting a bond or other security, seek an injunction, specific performance, or other equitable remedy to prevent competition or further disclosure, and may pursue other legal remedies.
• (i) ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;
• (ii) ALL CLAIMS FOR VIOLATION OF A FEDERAL, STATE, OR MUNICIPAL STATUTE, INCLUDING TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, AND THE FAIR LABOR STANDARDS ACT;
• (iii) ALL CLAIMS ARISING OUT OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
• (b) EQUITABLE REMEDIES. IT WOULD BE IMPOSSIBLE OR INADEQUATE TO MEASURE AND CALCULATE THE COMPANY'S DAMAGES FROM ANY BREACH OF THE COVENANTS SET FORTH IN SECTIONS , , ,   AND ,   AND    AND     AND    OF THIS AGREEMENT. ACCORDINGLY, IF THOSE SECTIONS ARE BREACHED, THE COMPANY WILL HAVE AVAILABLE, IN ADDITION TO ANY OTHER RIGHT OR REMEDY AVAILABLE, THE RIGHT TO OBTAIN AN INJUNCTION FROM A COURT OF COMPETENT JURISDICTION RESTRAINING THAT BREACH OR THREATENED BREACH AND TO SPECIFIC PERFORMANCE OF ANY SUCH PROVISION OF THIS AGREEMENT. NO BOND OR OTHER SECURITY WILL BE REQUIRED TO OBTAINING THAT EQUITABLE RELIEF AND THE EMPLOYEE HEREBY CONSENTS TO THE ISSUANCE OF THAT INJUNCTION AND TO THE ORDERING OF SPECIFIC PERFORMANCE.
• (c) CONSIDERATION. EACH PARTY'S PROMISE TO RESOLVE CLAIMS BY ARBITRATION IN ACCORDANCE WITH THIS AGREEMENT, RATHER THAN THROUGH THE COURTS, IS CONSIDERATION FOR THE OTHER PARTY'S LIKE PROMISE. THE EMPLOYEE UNDERSTANDS THAT THIS OFFER OF EMPLOYMENT IS MADE IN CONSIDERATION OF THIS PROMISE TO ARBITRATE CLAIMS.

17. AMENDMENTS.

No amendment to this agreement will be effective unless it is in writing and signed by both parties.

18. ASSIGNMENT AND DELEGATION.

• (a) No Assignment. The Employee may not assign any of his or her rights under this agreement, except with the prior written consent of the Company. All voluntary assignments of rights are limited by this subsection.
• (b) No Delegation. The Employee may not delegate any performance under this agreement, except with the prior written consent of the Company.
• (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made, or if both are made, in violation of this section, it is void and they are void.

19. COUNTERPARTS; ELECTRONIC SIGNATURES.

• (a) Counterparts. The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
• (b) Electronic Signatures. This agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

20. SEVERABILITY.

If any provision in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if the invalid, illegal, or unenforceable provisions had never been contained in this agreement, unless the deletion of those provisions would result in such a material change that would cause completion of the transactions contemplated by this agreement to be unreasonable.

• (a) If any provision in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if the invalid, illegal, or unenforceable provisions had never been contained in this agreement, unless the deletion of those provisions would result in such a material change that would cause completion of the transactions contemplated by this agreement to be unreasonable.
• (b) If the restrictions against   solicitation in section    and   competition in section    of this agreement are found by a court of competent jurisdiction to be unenforceable because they extend for too long a period of time or over too great a geographical area, or because they are too expansive in any other respect, these sections should be interpreted to extend only over the maximum period of time for which they are enforceable and over the maximum geographical areas as to which they are enforceable, and to the maximum extent in all other respects as to which they are enforceable, all as determined by that court in that action.

21. NOTICES.

• (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
• (b) Addresses. A party shall address notices under this section to a party at the following addresses:
• If to the Company:
• If to the Employee:
• (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.

22. WAIVER.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

23. ENTIRE AGREEMENT.

This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement with respect to the subject matter of this agreement. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.

24. HEADINGS.

The descriptive headings of the sections and subsections of this agreement are for convenience only, and do not affect this agreement's construction or interpretation.

25. EFFECTIVENESS.

This agreement will become effective when all parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this agreement.

26. NECESSARY ACTS; FURTHER ASSURANCES.

The parties shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this agreement.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this agreement on the date stated opposite that party's signature.

[PAGE BREAK HERE]

1. Except as listed in section 2 below, the following is a complete list of all Prior Inventions that were made, conceived, or first reduced to practice by the Employee, alone or jointly with others, before its agreement with the Company:

2. Because of an existing confidentiality agreement and the duties of confidentiality that the Employee owes to the parties listed below, the Employee cannot complete the disclosure in section 1 above with respect to the inventions or improvements listed generally below:

Free Employment Agreement Template

From salaries to confidentiality, craft clear terms for your new hires with an employment agreement. ensure a good work relationship from day one..

Complete your document with ease

How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.

Employment agreement: How-to guide

Having a good start to an employment relationship and making a positive first impression on a new hire is essential to establishing a productive, successful, and professional workplace. An important part of this process is creating an employment agreement. 

There are many advantages to having a well-crafted employment agreement, the most obvious of which is the legal protection it provides to a company or business. By providing written employment terms that include details of compensation, position, employment policies, and at-will status, the company creates a legal document that, when signed, can prove valuable if disputes occur. 

What is an employment contract?

An employment agreement, commonly called an employment contract or employee contract, contains all the essential terms and conditions of the employment. From an employee agreement, an employee understands their duties towards the company. It also provides employees with information about the: 

• Company policy
• Employee’s job title
• Salary details 
• Probationary period
• Sick leave, personal leave, and vacation time off
• Date of joining 
• Confidential information that employees should keep a secret

A written employee agreement lists employment terms, limiting later confusion and disagreement about those provisions. Clearly drafted employment contracts not only eliminate ambiguities but also establish a better employer and employee-working relationship. Employment contracts are created in the best interests of the company and the new employees. It helps to build mutual understanding and promotes good faith.

Difference between an employment agreement and an independent contractor agreement

An employment agreement differs from an independent contractor agreement . 

An employment contract hires an individual as a part-time or full-time employee. On the other hand, through a contractor agreement, professional experts are hired as independent contractors. An independent contractor doesn’t get any of the employee benefits like:

• Paid vacation time
• Personal leave and sick leave
• Health insurance 
• Retirement plans and benefits
• Monthly salary. An independent contractor is paid for the services rendered for the company they are hired by.
• Employee’s job title       

Guidelines to create an all-inclusive employment contract

Clarify and reach a consensus before making the agreement in writing.

A good employment agreement is one that captures the intentions of the parties accurately. It’s a good idea to clarify the potential employee’s job duties and responsibilities, and his or her compensation package, before writing them down.

Refrain from adding unmet promises in your contract

Do not promise raises, bonuses, or other business perks if those are not guaranteed. Do not include anything that is not an absolute. Many lawsuits are predicated on misunderstandings related to expected bonuses. If you have a simple bonus calculation applicable to this employee, include that information in the agreement.

Provide reimbursement details    

If the company will reimburse or provide funds for moving expenses, include that information here and make your language precise.

Avoid customizing legal clauses on your own  

Do not alter the at-will language or insert terms that conflict with that language (for example, references to long-term employment). Nothing in the contract should contradict your arrangement for at-will employment. 

Add non-disclosure clause

A non-disclosure clause in which the employee agrees to keep the company’s private information private is effective from the beginning of the employment. A departing employee’s ability to use confidential information will continue to be effective, and you will not need to negotiate with a potentially hostile party to ensure this limitation.

Include non-compete clause

If you include a clause that limits a departing employee’s ability to compete with the company, make sure the scope and reach of this clause is reasonable. Although some states’ courts enforce these clauses as a matter of course, many others (including California) view them unfavorably and will not enforce them unless the restrictions are very narrow. There must be a correlation between the time period for the limitation and the need for the clause. In other words, this clause can only be for as long as it would take for an employer to overcome any potential competitive disadvantage.

Mention state law for dispute resolution

If you want a specific state’s laws to resolve any employment disputes, specify that state in the employment agreement. Courts will generally honor the parties’ choice of law if the state selected has a connection to the dispute.

Enforce obligations under the employee agreement

The provisions of an employment agreement will bind your employee strictly only if you follow them to the letter. In other words, you can enforce its terms against your employee if you do not violate your own obligations under the agreement. For example, your employee will not be bound by the terms of a non-competition clause if you try to end the agreement without giving the required notice or termination date.

Make the exit interview a part of the process

Nothing lasts forever, and this is certainly true of employment. At the end of an employment relationship, your company should conduct an exit interview, and you should consider putting this as a requirement in his or her employment agreement. At this meeting, the employee should be reminded of his or her continuing obligations to the company, including maintaining the confidentiality of information beyond the termination of the employment period. You can also use this time to resolve misunderstandings and smooth ruffled feathers, perhaps limiting later termination-related lawsuits.

Provide ample time to review the employment contract

Allow the employee to spend time reviewing the agreement. This will reduce the likelihood, or at least the efficacy, of a claim that he or she did not understand any terms or how those might affect the agreement as a whole.

Both parties should review the completed document carefully to ensure that all relevant points have been included. It is better to be over-inclusive than under-inclusive. Do not assume that certain expectations or terms are agreed to if they are not stated expressly in the document.

Produce two copies of the signed employment agreement

Once the employee and employer agree to the terms of the employment, they can sign the agreement and make it official. The employer and the employee must sign two copies of the agreement, one is kept by the employer, and the other is given to the new employee. 

If your agreement is complicated, it is always good to contact an attorney to help you draft a document that will meet your specific needs.

Get the contract signed

Regardless of the nature of your arrangement, the employment agreement should be signed before the employee starts work.

Key elements of an employment agreement  

The following instructions will help you understand the terms of your employment agreement. 

Introduction of parties

This part gives employer and employee details like their name and contact information. The employer is the party that will be hiring the employee. While giving the employer details you can also mention what type of entity it is, e.g., corporation, limited liability company, etc. 

You must also write the date on which the document is effective (usually when it is signed). 

Recitals are the “whereas” clauses that define the agreement's world and offer key background information about the involved parties. In an employment contract, this section includes a simple statement of the parties’ intent to enter an employment relationship.

In the background section, describe the employer’s business activities in detail. Note that this description could have a long-term impact on both parties.

There are also certain clauses in an employment contract that restrict the employee’s ability to compete with the employer in its industry after his or her employment ends. If the employer’s business is defined too broadly, the employee might not be able to find any employment at all! Make sure both parties agree on the business definition that is provided.

This section confirms the parties’ agreement to enter into an employment relationship. Note that the employment will be “at will.” This means that it can be ended by either party at any time for no specific reason.

Enter the date on which the agreement starts. Note that there is no definite “term” for the relationship. Unless either party ends the agreement, it will continue.

Compensation

Provide details of the employee’s salary and other benefits to be received in exchange for his or her work.

• Base salary : Enter the employee’s annual salary and explain how this will be paid (e.g., weekly, bi-monthly, monthly, etc.). 
• Non-salary benefits : This subsection allows you to list any other compensation the employee may receive. For example, if the employee will receive pension benefits or relocation expenses as part of his or her compensation, you can detail those here.
• Vacation : Enter the number of paid vacation days the employee is entitled to in a given year.
• Signing bonus : An optional provision requiring the employer to pay the employee a certain amount for agreeing to work at the employer’s offices.  This may be included in an executive agreement as an additional incentive for accepting a job. If you include this section, enter the amount of the signing bonus that will be paid and when it will be paid. Note that if the employee stops working for the employer within a certain amount of time, he or she will be required to pay back this signing bonus. You also need to mention what time period it would be. 
• Performance bonus : This provision rewards the employee for hitting certain specified performance goals. According to the terms here, the employee’s bonus compensation will be calculated according to the employer’s bonus plan.  Note that most employment agreements do not include specific information about an employee’s bonus. However, if you want to add additional provisions about the employee’s performance bonus, feel free to do so here. 
• Stock options : This section allows the employee to participate in any stock option plan the employer has after a certain number of years. If you want to include this clause, enter the length of time it will take for the employee to qualify for this plan.
• Other benefits : A catch-all provision simply stating that the employee may receive other benefits of the sort that other employees of his or her position receive.
• Withholding : States that the amounts that will be paid to the employee may have deductions taken from them to satisfy tax requirements.

Responsibilities and duties

Describe what the employee is expected to do as part of his or her job. This should be as specific as possible for both parties’ benefit. 

For the employee, it is important to know what is expected of him or her. 

For the employer, defining the employee’s work duties will make clear, from an intellectual property perspective, what the employer can claim to own under the work-product doctrine (which states that things created in the course of the employee’s employment are owned by the employer). 

Provide the location where the employee will provide his or her services, which may simply be the employer’s main place of business.

Other employment

This section clarifies that the employee is not allowed to work for other companies during the employment period. However, they can invest in other companies if they don’t require the employee’s help to operate.

Working amenities

An optional provision indicating that the employee will be given certain extras to create a more comfortable work environment (e.g., a private office, personal computer, etc.). 

If the employee pays his or her own money to cover any reasonable expenses relating to official employer business (e.g., travel expenses, client dinners, etc.), the employer promises to reimburse that money. The employer agrees to provide proof of payment of these expenses to the employer’s satisfaction.

Confidentiality

During the employment period, the employee is not allowed to give any private information to outside parties without the employer’s consent. “Confidential information” includes any information about the employer not generally available to the public.

Non-solicitation

This provision is meant to prevent the employee from luring away key employees or customers from the employer if he/she stops working for the employer. According to this, the employee should not ask or lure any such individuals to accept positions as employees or clients of the employee. 

This provision lasts only for a certain time after the employment period ends. Enter the amount of time this restriction will last. Make sure this is a reasonable time period: courts may overturn a provision that is for too long or for too large an area.

Non-competition or non-compete clause

An optional provision providing that the employee will not enter any business that competes with the employer for a certain period of time after the end of the agreement.

This clause is subject to very specific state guidelines. Please conduct additional research to ensure that the language is drafted very narrowly and according to state law. 

In addition, non-compete clauses may be unenforceable for certain professions (e.g., in Delaware and Massachusetts, non-compete clauses for doctors are generally not allowed).

You also need to mention the time period for which this non-competition restriction runs. 

Fidelity bond

A fidelity bond protects employers from losses they might experience because of their employees’ bad behavior (e.g., theft of company property). 

Termination

Details the circumstances under which the agreement may be terminated. If the agreement is for “at will” employment, either party can end the agreement simply by giving the other party notice. You need to mention the notice period that must be given. 

If the employer asks, the employee will continue to work during this notice period and will continue to receive salary payments until his or her last day of work. 

There is also an optional clause where the employer can offer the employee a severance package. If the employee owes any money to the employer, the employer is given permission to deduct this amount from the pay offered.

Return of property

This is an extremely important provision, and although it may seem obvious to you that company property should be returned after an employee’s termination, it may not be as obvious to your employee. It is thus essential to communicate your return policy in the agreement (and reiterate it in your employee handbook, exit materials, and severance agreements), stating specifically that employees must return all company property before leaving your employment.

This section states that if the employee can’t perform his or her duties for a certain period of time because of an injury or illness, the employer can reduce his or her salary by a specific percentage. 

Enter this amount of time (in weeks or months) and the percentage by which the salary would be decreased. Note that the employee will be entitled to full salary once he or she returns to work full-time. 

The employer can end the agreement entirely if the employee’s absence lasts longer than a certain period. Mention the maximum time period that would lead to terminating this agreement. 

Death during employment

This provision states that if the employee dies during the employment period, the employer will pay his or her salary to the employee’s relatives until the end of the month in which the death occurred. The employer also promises to pay a certain additional amount, which the parties have agreed upon.

Arbitration

A commonly used optional provision that requires the parties to resolve any disputes in arbitration (rather than in the courts). Arbitration can be quicker and cheaper than litigation for both parties. However, there may be local restrictions (or limitations in your industry) about using these clauses, so it’s a good idea to review laws governing arbitration in your area and in your field.

Lists the addresses to which all official or legal correspondence should be delivered. Write a mailing address for both the employer and the employee.

Successors and assigns

In the life of a company, there may be mergers, acquisitions, or sales of business divisions. On such occasions, the company may assign its agreement to a surviving entity or affiliate without obtaining the employee’s consent. Simply put, if the employer is purchased, the new company will not need to renegotiate this agreement: it will continue to be effective as is. 

No implied waiver

Explains that even if one party allows the other party to ignore or break an obligation under the agreement, it does not mean that party waives any future rights to require the other party to fulfill those (or any other) obligations. 

For example, say the agreement requires the employee to work 45 hours a week, but the employer only requires the employee to work 40 hours a week. Later, the employer could tell the employee to work 45 hours a week, as required in the agreement. If the employee claims that this right was “waived” because the employer didn’t enforce it, the employer can point to this section: its failure to enforce the provision at one point doesn’t mean it can’t enforce it later.

Governing law

Employees may work in one state and their employers in another. A governing law provision allows the employer to choose the state laws that will be used to interpret the agreement. 

Counterparts; electronic signatures

This section says that even if the parties sign the agreement in different locations, or use electronic devices to transmit signatures (e.g., fax machines or computers), all of the separate pieces will be considered part of the same agreement. 

In a modern world where signing parties are often not in the same city - much less the same room - this provision ensures that business can be transacted efficiently without sacrificing the validity of the agreement as a whole.

Severability

Protects the terms of the agreement as a whole, even if one part is later invalidated. For example, if a state law prohibits arbitration clauses, it will not undo the entire agreement. Instead, only the section dealing with arbitration would be invalidated, leaving the remainder of the agreement enforceable.

This part also discusses the non-competition and non-solicitation clauses. Because these clauses are delicate and run the risk of being termed too broad or overreaching, this subsection allows a court to limit the reach of these clauses rather than delete them altogether. 

Entire agreement

The parties’ agreement that the document they’re signing is “the agreement” about the issues involved. Unfortunately, the inclusion of this provision will not prevent a party from arguing that other enforceable promises exist, but it will provide you some protection from these claims.

This part mentions that the headings at the beginning of each section are meant to organize the document. Any interpretation of the agreement should not be based on the headings.

Employment agreement template: Helping both the employer and the employee in the hiring process

Employment agreements are pretty long and exhaustive documents. Drafting them is often cumbersome and time-consuming. You must be careful while including various legal clauses in your agreement and should not leave room for misinterpretation. You also need to ensure that all important terms and conditions are included. For instance, you need to check whether certain important documents and clauses are included, like:

• Non-disclosure agreement (NDA) : Most employers include this document along with the employment agreement. A basic NDA makes the employee agree not to disclose information regarding the company.  It asks its employees that during the time of employment and after resigning, they should not divulge any trade secrets or such confidential information to any third party.
• Non-compete clauses : A non-compete clause is nothing but a mandate where the employee agrees not to work in another company that is from the same industry and is your direct competitor. You can either include a clause or even have a separate agreement specially created to include this provision.
• Confidentiality clauses : In a confidential clause, you need to mention what your company considers confidential and part of intellectual property.
• Non-solicitation clause : A non-solicitation clause restricts an outgoing or former employee from using the company’s client and customer information for personal gains. It prohibits the former employee from poaching or convincing the current employees to leave their jobs to join the new company.

The above clauses are some of the critical clauses of an employment contract. There might be other important clauses that you might want to include in your contracts. To avoid any misses in your employment contract, having a template handy with you can be helpful. 

LegalZoom offers a comprehensive employment agreement template, making the contract creation process much easier. You can use our template, answer some guided questions, and download the document for free. 

However, an employment contract template might not always meet your requirements. Oftentimes you have to edit and customize your employee agreement to suit your needs. For those scenarios, all you have to do is purchase our form templates plan and easily customize the template with the help of a rich editor.

Frequently asked questions

What's an employment agreement.

Give your new employees a clear understanding of hiring terms from day one. By providing employment terms such as compensation details, position title, and at-will status in a written employment agreement, your company creates a legal document that defines specifics for you and those who work for you. Additionally, a written agreement that lists employment terms may help prevent confusion or help resolve any later disputes. This could also offer some basic protections for you as an employer.

What information is required to complete a basic employment agreement?

Here's the information you'll need to have handy to complete your employment agreement:

• Who it's coming from : Determine if a business or individual is sending the document and have the name and contact information ready.
• Who it's going to : Know who this document is going to and have the individual name and contact info ready.
• Which state will govern it : Specify the state so it's clear which state's laws apply to the document.
• Subject matter : Have a summary of the general nature of the new employee's job ready (e.g., design services for your marketing department).
• Dates : Be clear about when this agreement takes effect.
• Compensation : Know the expected salary, frequency of payment, and any bonus they may be eligible for, as well as any additional benefits.

Related templates

California General Contractor Agreement (Cost Plus Fee)

Collaborate with a California-based contractor using a general contractor agreement. Define clear payment terms of the project, including the actual cost and contractor's fee.

Employee Non-disclosure Agreement

Keep your employees informed about what is confidential and can't be disclosed to third parties. Safeguard the proprietary information with an employee NDA and maintain trust in the people working for you.

Extension of Agreement

Keep your successful collaboration going with an extension of agreement. Our template allows you to extend your partnership for a new time period easily.

General Contractor Agreement (Cost Plus Fee)

Build accountability and allow adjustments to your construction project. A general contractor agreement (cost plus fee) covers all project details upfront, ensuring both parties have a transparent and collaborative construction experience.

General Contractor Agreement (Stipulated Fee)

Use a general contractor agreement (stipulated fee) when paying a contractor a fixed amount for their services. Clearly define the project and payment terms.

Independent Contractor Agreement

Clearly define project terms and responsibilities when hiring contractors for your company. An independent contract agreement helps to lay out work schedules, payment terms, and other essential details.

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Patent Assignments in Employment Agreements – a Sometimes Overlooked, but Always Important Component

• November 16, 2021

By: Peter C. Lando and Thomas P. McNulty

With assistance from summer intern Tyler Gruttadauria

Businesses, of course, have a strong interest in owning intellectual property created by their employees. Intellectual property—patents, copyrights, and other confidential and proprietary information including trade secrets—is often the most valuable asset a business can own, so it is important to ensure that employee developments and inventions belong to the employer. In the United States, inventions presumptively belong to the inventor, and any transfer of ownership (“assignment”) must be in writing to be effective. Rather than requiring employees to sign assignment agreements for each patent application filing, employers sometimes rely on employment agreements and handbooks to establish ownership in intellectual property created by an employee. Employers often provide employment agreements with assignment clauses that are intended to give the employer rights in inventions made by the employee during the period of employment. These assignment clauses are often treated as mere boilerplate, yet the precise wording of these clauses can have major impacts on the effectiveness and limitations of any assignment.

Ensure that you have an Assignment and not a mere promise to assign

When drafting an agreement to have an employee assign future inventions, it is vital that the language used in an assignment clause states a present-tense, actual assignment. Phrases such as “hereby assign,” “agrees to grant and does hereby grant,” or that inventions “shall belong” to the employer and employee “hereby conveys, transfers and assigns” have been deemed by the courts to be effective to transfer ownership of a future invention without the need for any subsequent agreement. Ownership effectively transfers immediately, once the invention has been made. Assignment clauses that use future tense language, on the other hand, generally will require an additional agreement to result in a transfer of ownership of the invention, and any intellectual property (“IP”) covering the invention. Terms such as “will assign,” “agree to assign,” “will be assigned,” and the like, have been found by numerous courts to constitute nothing more than a promise or contract to assign an invention in the future, but not to serve as an actual assignment.

In addition to the wording used in the assignment clause, the language of any carve-outs should also be scrutinized. Agreements may contain a carve-out clause to exclude a new employee’s prior inventions from being assigned, or to prevent assignment of inventions unrelated to the employee’s work from being swept into the assignment provision. A broad, non-specific carve-out clause may prevent an employee agreement from automatically assigning inventions of that employee, even where the assignment clause includes the proper “hereby assign” type of language, because this leaves open the possibility that an invention is not subject to the assignment clause. This contrasting language may create an ambiguity in the employment agreement that subjects it to construction under state law, which in turn may allow for the employee to introduce extrinsic evidence, such as conversations that took place during employment negotiations, to defeat the automatic assignment. While patent assignment provisions are governed by Federal Circuit law, resolution of contractual ambiguities is governed by state law, which varies considerably regarding the admissibility of such extrinsic evidence.

Failure to obtain an automatic assignment can have negative consequences

An assignment clause that is deemed ineffective to automatically transfer ownership of an invention can create significant problems for an employer. In such circumstances, a business would not have standing to bring a patent infringement suit until it has taken the necessary steps to obtain a valid assignment. This may require the filing of a breach of contract claim against the employee to require fulfillment of the contractual obligations, including execution of assignment documents. In the interim, infringers could continue practicing the invention; and if the infringing activity has gone on long enough, the six-year statute of limitations may prohibit full recovery of damages. Further, if an inventor/employee has made only a promise to assign, and instead transfers ownership to a third party who lacks knowledge of the assignment obligation, that second transfer of ownership may well prevail, leaving the original employer with no exclusionary rights at all.

Ineffective assignment provisions can affect more than just litigation. Businesses and investors typically conduct IP due diligence when entering into transactions involving the investment in or sale of IP assets, company divisions or entire entities, and any weaknesses in assignment provisions may affect the perceived value of the IP assets and/or business being considered.

Do not count on the “Hired-to-Invent” doctrine to result in ownership of employee inventions

Some employers do not require employees to sign an agreement containing an assignment of inventions because they believe that they automatically own inventions that they paid someone to create. Under the “hired-to-invent” doctrine, this will only occasionally be correct. Employees or contractors hired (and paid) specifically to create a particular invention or to solve a particular problem may be deemed to have implicitly assigned their rights in the invention to the employer. This is a highly fact-based determination, however, and applies only to inventions created in response to the specific thing the employee was hired to do. A mere title of “researcher” or even “inventor” will not, standing alone, suffice to ensure ownership of inventions by the employer. Further, until a court has ruled one way or the other, an employer relying on this doctrine will not have any certainty in its rights to the invention. Should the court rule against the employer, it would lose the exclusionary rights it believed it possessed and may face an infringement lawsuit from the employee or anyone to whom the employee may have assigned the invention/patent rights.

Absent an effective assignment, an employer may obtain limited “shop rights” in inventions made using the employer’s time, materials, facilities or equipment. Shop rights take the form of an implied license to practice the invention, precluding the employee from obtaining damages or injunctive relief on a patented invention. Shop rights are limited, however, and do not allow the employer to prevent others from competing by practicing the invention. Further, shop rights cannot be transferred via license or assignment, effectively devaluing the IP assets and, perhaps, the company.

Other Considerations

In addition to having the proper “hereby assign” language, employment contracts should ensure that inventions , rather than just patents or patent applications, are subject to the assignment clause. Language stating that all inventions, improvements, discoveries, and the like, whether or not patentable or copyrightable, are subject to the assignment, ensures that information that could be protected through other regimes, such as trade secrets, automatically become the property of the employer.

Intellectual property has taken on an ever-increasing role in determining the value of a business. A company’s ability to develop and protect its intellectual property is a key factor in its future success. Given this, it is important that businesses recognize that assignment provisions of employment agreements are not mere boilerplate, but instead may be one of the most important legal provisions that ultimately can impact not only an employment arrangement, but the value of the business itself.

• Peter C. Lando
• Thomas P. McNulty

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International assignments: Key issues to consider

What legal issues do you need to consider when it comes to sending employees overseas?

The number of employees working abroad is increasing. As it becomes more common, some assume this will lead to greater standardisation, with template assignment letters the norm.

However, the legal, tax, pension and other variables involved in international assignments require a more bespoke approach, leaving little room for standard documentation. We outline some key issues to address below.

What is an assignment?

Also referred to as a secondment or transfer, an assignment might be internal (to a different role abroad with the same employer) or to an external employer. A key characteristic of an international assignment is that an employee from one legal entity and country ('home' country) temporarily performs services in another country ('host' country).

Potential assignment structures

There are a number of different ways in which assignments can be structured and documented. Which approach is appropriate will depend on a range of issues including employment law, tax, pension, social security and regulatory implications as well as the expectations of employees. Five frequently used assignment structures are:

• the employee continues to be employed solely by the home employer;
• the contract with the home employer is suspended and the employee enters into a local employment contract with the host employer for the assignment;
• the contract with the home employer is terminated with a promise of re-employment at the end of the assignment. In the meantime, the employee enters into a local employment contract with the host employer;
• the contract with the home employer is suspended and the employee enters into a contract with an international assignment company (IAC) within the employer group; or
• the contract with the home employer is suspended and the employee enters into a contract with both an IAC and the host country employer.

Which is best?

When deciding on the best structure for the circumstances, some questions to consider are:

• Do the host country’s laws require employment by a local entity, ruling out sole employment by the home employer?
• Where there is no contract of employment in place with the host employer, could local laws presume that the host is the de facto employer?
• If the home contract is “suspended”, is the home employer prepared to accept the legal uncertainty, in employment law terms, that this status brings?
• In a dual contract structure, who will bear the greatest risk of being liable for employment claims – host, home (or the IAC)?
• Will the employee accept the termination of his/her home contract?
• What is the impact on pension and benefit schemes, social security and tax?

Are there key terms in the home contract that require special consideration and protection, for example, restrictive covenants and confidentiality?

Which national law applies, when and to what? Which courts would have jurisdiction in the event of a dispute?

Who pays for, and manages, the employee during the assignment and will the employee return to the home country?

Looking forward

It is inevitable that documenting assignments will become a smoother process as employers become more familiar with the issues involved. However, the range of significant personal, legal and financial implications will mean that a degree of tailoring will always be necessary, in order to avoid negative repercussions.

Gareth Wadley is principal associate at Eversheds

Further reading

Paying your way: International tax and benefits

How HR can improve LGBT+ employees' access to international assignments

Companies expect to increase international assignments

How territorial jurisdiction works

Hot topic: Key issues for the new government

Rise of 'global nomads' causes problems for employee benefits strategy, Mercer study shows

Three-quarters of Europeans would consider international roles

Businesses fail to track cost of overseas assignments

• Assignment Abroad

Considerations when Assigning Employees to Work Abroad

There are a number of considerations for employers who wish to assign their employees to work abroad. These will include meeting the immigration requirements of the country of posting and any employment laws which are in place in that country. Often employers will develop a relocation policy or similar document to deal with all of the conditions and practices applicable to the posting.

It is usual for a number of issues to be agreed prior to the posting which will include:

1.  Remuneration  including any incentive payments, any additional benefits relating to relocation and the currency of the remuneration.

2.  The tax position  – the length of the posting may affect the employer’s tax status within the UK and this should be clarified if necessary.

3.  National insurance contributions and benefits  – the regulations in relation to this aspect of a posting are constantly changing and therefore both parties should ensure that the situation is clarified to ensure that any social security contributions to be made are paid in order that any state benefits can be preserved.

4.  The law applicable to the posting  should be clarified. The parties to a contract may choose which law will determine their respective rights and obligations. However, even if the parties agree that the law of the country outside the UK is to govern the contract a UK employee cannot be deprived of any UK statutory employment rights that may apply. Where employees carry out duties in more than one country, the place where the employee habitually carries out their work will be decided by the length of time the employee spends in each location and where they have worked the longest.

In relation to the enforceability of the employee’s UK statutory rights, it is generally necessary to look at the territorial jurisdiction from which the UK statutory employment right is derived to ascertain whether the employee can bring a claim to protect or enforce their rights within the Employment Tribunals in this country.

Whilst employees and employers are free to agree to enhance these conditions, they may not reduce or exclude them. Therefore the right of an employee not to be unfairly dismissed under UK employment law cannot be avoided by the parties agreeing that another country’s law will govern the employment contract.

Related Pages

• Secondments at Work
• Part-time Workers
• Fixed Term Contracts
• Breach of Contract

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Commuter assignments – the consequences beyond the financial cost

Cost is often the main concern when considering a commuter assignment as an alternative to a long-term assignment accompanied by family. But the financial implication is far from the only factor that matters when deciding if a commuting arrangement is right for both the employee and the company.

Multiple workplace vs. personal choice

Commuter assignments, where the employee works in the host country and travels back to their home country roughly once a week, can broadly be split into two types: 

1) There is the employee who lives and works in one country but has regular workdays in one or more other countries: a “multiple workplace commuter”. For example, a regional manager may live in the Netherlands where they work two days a week and spend the other three days in Belgium. As commuting is an integral part of their role and might even be an indefinite arrangement, they are often not considered as an assignee by the company. 

2) Then there is the employee who chooses to take up a position in another country without their family as an alternative to a more traditional long-term expatriate assignment, allowing them to return home every weekend. This employee could be defined as a “personal commuter”. 

This article focuses mainly on personal commuter assignments. However, even for a multiple workplace commuter where there is no question of relocating family (since the employee is still required to work in the country in which they live), some of the same issues arise which may not be considered beforehand by the company. 

A way to overcome barriers to long-term assignments

An employee is most likely to turn down a long-term assignment because of their family. ECA’s Managing Mobility Survey 2016 found that the impact on family, partner’s career or children’s education were the most common barriers to long-term assignments. Around a quarter of all participating companies, and 41% of European companies, reported that they use commuter assignments to overcome these kinds of challenges. 

If an employee turns down a standard long-term assignment, and if the distance between the home and host locations is relatively short (usually a maximum of three to four hours’ travel time), a commuter assignment might be suggested instead. This seems to be a logical solution: a commuter arrangement encourages the employee to accept the host country role while avoiding the huge impact that uprooting their family to another country would cause. But there is much more to a commuting arrangement than just leaving the family at home and weekly travel.

The financial cost 

Commuter assignments can often seem like a cost-efficient mobility solution for the company but what a company might save with one hand, it could spend with the other.

Convenient accommodation

Convenience is a priority for commuters to make the most of their work time in the host country, so they may need to stay in a small furnished central apartment close to their workplace. This may not come cheap. While it might cost less than renting a family home in the suburbs - a viable option if the assignee is accompanied by their family - it could negate the “savings” that are gained from not relocating a family. For multiple workplace commuters, depending on the number of days they typically spend in the host country, hotel or serviced accommodation close to the workplace is more likely to be provided, again at a high cost.

Higher living expenses

Not only is a commuter assignee likely to be living more “conveniently”, and therefore expensively, in the host location than at home or when on a long-term assignment, but they may also be dining out more or shopping in small, more expensive convenience stores in the city centre rather than large out-of-town supermarkets. On top of this, they will still be maintaining a household in their home country. Typically, a subsistence allowance or per diem will need to be paid to a commuter to cover their meals and the cost of other basic goods and services for the days that they spend in the host country. Alternatively, they could expense these costs, though this means administration for the company as well as for the employee.

Managing tax and social security compliance 

The tax position as well as the social security position of commuter assignees can be particularly challenging to manage, with possible liabilities and payroll obligations in both the host country (where they work) and their home country (where they are based and where they may also have work days). Tracking the number of days spent in each country is vital for ensuring compliance. The complexity of tax and social security of a commuting arrangement may not only mean more administration for the company but also more involvement from external tax specialists, all of which comes at a cost.

These costs apply whatever the reason for commuting. But when commuting is used purely for personal reasons and an alternative approach exists, there is more focus on the cost to the company.

The professional and personal impact

Then there are the costs that are harder to quantify: the impact on the job itself and the employee’s personal life.

From the employee’s perspective, the benefits of an international assignment accompanied by their family usually stretch beyond the job and their career. The opportunity for the whole family to live in a different country and to learn a new language and culture can be very attractive. If the assignment goes well, it can be a wholly fulfilling experience, with a healthy balance between personal and professional benefits. When ECA runs satisfaction surveys for long-term assignees on behalf of companies, non-work-related factors regularly feature just as highly as the job itself as being the most enjoyable aspects of an assignment. 

The assignee is appreciative of the opportunity given to them and their family by the company, and perhaps more likely to accept another assignment if asked. A successful assignment can engender loyalty from the assignee, which is particularly important if they are considered top talent and the company has long-term plans for them.  

So what can happen when the employee goes on assignment without their family as a commuter? That healthy balance between personal and professional benefits is lost; it becomes all about the job and then trying to get home to their family as soon as possible every weekend. The whole assignment experience is of a completely different nature to that of a long-term assignment accompanied by their family.

In this case, we could argue that at least the assignee can just concentrate on their job in the host location and they don’t have to worry about how their family is adapting to another country. Difficulties with family adjusting to the host country can be a distraction and typically one of the main reasons for assignment failure, so if the assignee goes alone, their employer should presumably be seeing the best possible results? 

Commuting could in fact have a detrimental impact on the employee’s ability to do their job, especially for roles that require strong relationship-building. Their host country colleagues may see them as an outsider: arriving on Monday, working late during the week to make up for lost time and then leaving early on a Friday (or earlier if they can work from home some days). That lack of professional and social integration with the host company could affect their performance in an unforeseen way, in addition to the stress of frequent travel. 

Then there are the pressures faced by the assignee’s family on their own in the home country. Their partner may feel unsupported in the day-to-day raising of any children, with frustration on both sides at the assignee’s absence. The precious little time that the employee is at home is spent catching up on all home-related matters, and not just with their family. Maintaining a healthy work/life balance becomes difficult and, eventually, there often needs to be a compromise. The commuter may even become resentful towards their employer because of the situation and start looking for other opportunities.

Using commuter assignments selectively

Bearing these points in mind, is it right for an employer to encourage or allow employees to commute? There needs to be transparency and pragmatism on both sides; the company and employee should acknowledge the potential impact on the employee’s performance, career, well-being and personal life. The employee may not think the arrangement will be a problem for them or their family, and for some it won’t be. Ultimately the company cannot decide this for them, but their insight and advice may help the employee to make a more informed decision.

The company also needs to weigh up the potential risks to the business of a commuting arrangement against the employee not accepting the role at all. If there are no other suitable candidates, then the company may have little choice. Some assignments are unsuitable for a family in any case, such as those in remote or dangerous locations. Likewise, commuting is rarely possible over long distances. But where it is practically possible, establishing clear criteria as to when commuter assignments are allowed can help ensure their use is limited.  

What is the nature of the assignee’s role? – Some companies will only allow commuter assignments for senior management due to the strategic nature of their roles. But others find that technical-based roles are better suited to a commuting arrangement as integration with the host company is not as important. 

How long is the assignment intended to last? – To minimise the risk of employee burnout, it is advisable to set a maximum length for any commuting arrangement, whether for personal reasons or due to multiple workplaces. One year or two years are often cited as maximum periods for commuting. 

Why does the employee want to commute? – Not all employees who request a commuting arrangement do so to avoid relocating a family. Some simply prefer to continue living in their home country as a lifestyle choice or perhaps they have other commitments unrelated to a partner or children. Every company will form a view as to what constitutes a good enough reason to support a commuting arrangement, considering the cost and other consequences, though it’s important to treat each request fairly and consistently. 

Can anything be done to overcome an employee’s concerns about relocating their family? – Perhaps the company could engage a specialist education consultant to find a solution to their concerns for their children’s education, perhaps considering distance learning of the home country curriculum. Maybe a specialist partner support consultant could help to identify professional training for the assignee’s partner to help them enhance their career, so that their return to the job market in the home country will be easier. If the company can address such issues to allow the family to accompany the assignee, the effort could pay off in the long term.

Conclusion 

A commuter assignment can be an ideal way for an employee to further their career when their family can’t or don’t want to relocate on an international assignment. But if not managed carefully, it can potentially become a professional and personal burden producing a resentful employee. To help companies in determining whether to approve commuting arrangements, global mobility teams should raise awareness of the costs and potential risks of commuter assignments and consider building a policy which defines the circumstances in which commuting would be permitted, as well as the pay and benefits conditions. Companies will then be better equipped to ensure that commuter assignments are only used when necessary and not as the “easier” option.

Our Consultancy & Advisory team can help you design or review existing policies, as well as calculate weekly or monthly allowances for your international commuter assignees.

• Configuring and Extending HCM Using Autocomplete Rules

Overview of Worker Employment Contract

The Worker Employment Contract business object contains the details of a contract that is associated with an employment agreement based on the PER_CONTRACTS_F table.

This object is typically used to validate the number of contract extensions.

The Worker Employment Contract business object impacts these responsive flows:

Add Assignment

Change Legal Employer

Employment Contracts

Employment Information

Local and Global Transfer

The sections within the responsive flows, that use the Worker Employment Contract business object (Entry, Tab-out, Exit) may be named differently. The naming convention is based on the action, such as Assignment Details, Employment Details, Offer Details, Location, Manager, Working Hours, Contract Information, Transfer, Promote, and so on.

For more information about the Worker Employment Contract attributes, refer to the Tables and Views for HCM guide on the Oracle Help Center.

How to Write an Employee Invention Assignment Agreement

Jump to section.

Writing an employee invention assignment agreement requires a lawyer to draft a document showing who owns what and the rights between an employer and employee. This contract helps in clarifying the terms of intellectual property rights as it relates to inventions, artwork, innovations, published content, and software code, among others that can be done by employees. This post will talk about how you can write an employee invention agreement and matters relating to the same.

Steps for Creating an Employee Invention Assignment Agreement

An employer should enter into an employee invention assignment agreement to safeguard its interests with respect to any inventions, creations, or discoveries made while performing duties for the company. These are steps toward writing a sound employee invention assignment agreement:

• Recognize Objective and Scope. Understanding this requires drafting the contract itself. The main purpose of this document is to describe to whom certain rights pertaining to their IP goes when they work with the firm.
• Include Parties’ Identification and Definition. The names of the two parties involved, employers and employees, must be added to these documents, together with their legal addresses and other relevant corporate information. Furthermore, define some important words used within this paper so that there would not be confusion about anything said later on.
• Highlight Intellectual Property Covered. Differentiate what kind of intellectual property is meant here in clear terms. It may include such things as designs, writings, and software products, among others as far as concerns, business concern is one part that ensures all potential kinds of intellectual property are covered.
• Establish Timing and Ownership. The period within which this contract runs needs defining. As a rule, it usually encompasses IP created by staff during their employment term at such a corporation. Determine if ownership immediately vests in the company upon creation or whether there exists a process through which it can be transferred thereto.
• Detail Reporting Requirements. Specify how workers should submit information about their patents or works to supervisors/managers, etcetera, instead of them being kept secret from each other’s eyes alone, ensuring all valuable IPs are made known. Thus, indicate the way and period one is expected to convey.
• Clarify Consideration and Compensation. Find out if there is any amount, reward, or other forms of value being provided to staff in return for such IP that they become the company’s property. Besides a lump sum payment as may be agreed upon under the agreement, it could also involve sharing some part of future profits that emanate from the use of those innovations.
• Introduce Confidentiality and Non-compete Clauses. Some of the things you should add to this paper are clauses dealing with non-disclosure agreements and non-competition after termination. These protect trade secrets from competitors even if an employee leaves one company for another.
• State Jurisdiction and Dispute Resolution . You need to clearly mention where this contract falls in terms of jurisdiction, plus outline how conflicts between parties should be solved once they arise. Methods like mediation, arbitration, or litigation may be used. This helps in avoiding legal complications later on by setting what would happen during disputes within its text.
• Obtain Legal Review . It is important to consider engaging professional legal minds who will confirm their compliance with governing legislation. This can point out places that have been designed ambiguously or might contain loopholes leading to disagreements afterward.
• Get Signatures. When the employee invention assignment agreement has been written and reviewed, it should be executed by both parties. Putting signatures on the agreement is a way of demonstrating comprehension and consent to the terms that have been summarized in the invention agreement. It is also good to have signed copies retained for future reference.

Importance of Writing an Employee Invention Assignment Agreement

Intellectual property (IP) is normally considered the basis for success in online businesses due to their rapidly changing nature. As organizations continue to search for ways of creating new goods, services, and technologies, there has been a growing importance of employees’ input towards these developments. However, ownership and protection of intellectual property rights developed by employees during employment can become intricate. This is where firms exploit employee invention assignment agreements. Here are some reasons why drafting an employee invention assignment agreement is important:

• Protecting Intellectual Property: Employees may disagree with employers over ownership claims if they do not sign EIAAs, resulting in conflicts between them. An EIAA clearly defines who owns what and, therefore, avoids lawsuits.
• Facilitating Innovation: An EIAA encourages workers to provide creative ideas without fear of being discredited or controlled by setting out who possesses such ideas and how they are compensated for through it. Thus fostering an environment conducive to nurturing innovation.
• Enhancing Business Viability: Intellectual property is often at the core of corporate competitiveness. Therefore, this ensures that it does not lose its capabilities in terms of licensing or otherwise using its IP assets while keeping abreast of time.
• Avoiding Litigation: Ownership ambiguities can lead to expensive disputes between employees and companies; however, well-written EIAs eliminate the need for litigation, thus saving resources spent, time used as well and reputational harm suffered.
• Encouraging Innovation: However, while these contracts may favor organizations with respect to ownership rights in inventions, they occasionally contain provisions relating to providing reasonable compensation or recognition to inventors who make substantial contributions towards inventions. This strikes a balance for employees who may feel that their own inventions will be recognized or rewarded even though they are owned by the company.
• Attracting Investors and Partners: Companies with robust IP strategies, including sound EIAAs, are more likely to secure investors and potential partners. It is an indication of the organization’s commitment to protecting its assets.
• Complying with Legal Requirements: The lack of an EIA in some jurisdictions could give employees stronger claims on their intellectual property. Having a comprehensive EIAA in place helps companies to ensure compliance with local laws and regulations.

Benjamin W.

Key Terms for Writing an Employee Invention Assignment Agreement

• Intellectual Property (IP): Ideas, designs, inventions, and other works which are protected by law.
• Invention Disclosure: A formal report made by an employee specifying a new invention or idea to the employer.
• Prior Inventions: Innovations made by staff before commencing jobs, frequently not covered by the agreement.
• Work for Hire : Legal doctrine implying that the employer has automatic ownership over creations produced during work.
• Assignment of Rights: Employee’s conveyance of intellectual property rights to the employer as provided in the document.
• Exclusivity: The term restricting workers from transferring patents related to other organizations under contract.
• Inventorship: Identification of persons who contributed to the creation of something important for obtaining patents.
• Royalties: The amount paid to employees for inventions generating revenues for the company.
• Derivative Works: Intellectual property developed from existing creations, subject to the terms of the agreement.
• Termination Clause : It spells out what becomes of inventions in case of cessation of employment, including how rights will be passed on.
• Severability: Clause that ensures that if one part of the agreement is found to be invalid, others are still enforceable.
• Waiver : Often, written consent is required for one party to waive any right it has.
• Arbitration: A method of settling disputes outside a court, which is usually stated as this contract’s preferred approach.
• Verbosity: The article provides essential knowledge on drafting an employee invention assignment agreement.

Final Thoughts on How to Write an Employee Invention Assignment Agreement

In today’s knowledge-driven and competitive economy, where innovation is vital for success, organizations must proactively manage their intellectual property assets. An employee invention assignment agreement serves as a foundational document that outlines ownership, protects trade secrets, and fosters an atmosphere of inventiveness. What’s more, businesses can enable themselves to fully exploit their employees’ ingenuity and zeal while protecting their rights by creating a framework for ownership and associated rights relating to intellectual property.

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Should you give job applicants an assignment during the interview process? Be thoughtful about the ask

Hiring is a time-consuming and expensive endeavor. Companies need candidates who offer the right skills and experience for a given role, and who align with their organization’s vision and mission.

To find the best fit, many companies still lean on a strategy that continues to generate debate : the assignment. Some candidates believe their experience and interviews should give prospective employers enough information to determine whether they will fit the role. Employers have to ask themselves whether they are willing to turn off a strong candidate by asking them to do additional work.

Is the assignment valuable enough to the evaluation process that they cannot move someone forward without it? Sometimes it is—sometimes they help an employer decide between two strong candidates. And if they are necessary, how can employers make assignments fair and equitable for the candidate or candidates?

When done right, assignments help assess practical skills and problem-solving abilities, giving a clearer picture of a candidate beyond what their resume or interview reveals. But employers should be thoughtful about the ask. While it may make sense for roles that require specific technical expertise or creative thinking, it isn’t appropriate for all roles—so assignments should always be given with a clear reason for why they are needed.

Plus, they don’t just benefit the employer. For job seekers, an assignment during the interview process might also help them stand out from the competition. It can also offer a window into what their day-to-day in the new role might entail. Remember that the candidate should be interviewing the company, too. Having a test run of the work they’d be asked to do is a great way to see whether they believe the role is a fit.

However, there is a rift in how people perceive the assignment as part of the interview process. Workers today span many generations, each with unique values and expectations. Whereas older workers often prioritize stability and loyalty, younger millennials and Gen Zers are more focused on flexibility and work well-being, Indeed data shows .

This mindset impacts the amount of time and energy a candidate is willing to devote to each application. After multiple rounds of interviews and prep, taking on an in-depth assignment may feel like a bridge too far—especially if the expectations for the assignment are not clearly communicated ahead of time.

Some candidates are wary of providing free labor to a company that may use their work and not hire them. Hiring managers should be clear about how the work will be used. They may also consider offering compensation if the assignment requires more than a couple hours of someone’s time, or if they plan to use the work without hiring the candidate.

The key for early career candidates in particular is to ensure their time and efforts are respected. This is a win-win for employers: By providing clarity and transparency, they not only elicit the additional information they want from candidates, but they demonstrate that the organization is transparent and fair.

Equity is also imperative: Which candidates are being asked to complete assignments? Is the hiring team consistent in giving out assignments across ages, experience levels, and roles? There should always be a process and clear evaluation criteria in place to ensure fairness.

As we adapt to the rapidly evolving world of work, we must continue to think critically about each step in the hiring process. Candidate assignments can be a valuable tool, but only with appropriate respect for job seekers’ time and contributions.

With the right strategy, we can bridge the gap between generations in the workplace and build a hiring culture that values efficiency, talent, and integrity.

Eoin Driver is the global vice president of talent at Indeed.

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