Important Clauses in Employment and Independent Contractor Agreements

Many Massachusetts employers and business owners are now turning to at-will employment contracts and independent contractor agreements to protect their interests and govern its relationship with employees and contractors. These types of employment agreements are commonplace in most management and professional job positions, as well as for skilled outside, independent contractors.  In all likelihood, if a business provides a lucrative job position to an employee, an employment agreement may become a condition prior to commencement of employment. 

What are the types of clauses that businesses, employees, and contractors can expect to see in a well-drafted employment agreement? 

Term of Service or At Will or Terminable Status - Typically, most employment agreements or independent contractor agreements are "at will." In other words, you are not provided to any continuing right to employment or payment for a certain term. In most cases, a business can terminate its relationship with employees according to the terms of the contract; the company's own policies; and within the bounds of Federal and State laws. So long, as businesses are compliant with these covenants, policies and laws, then the business can terminate employment for any reason. Some employment or independent contractor agreements do contain a set term of service.  If you are drafting an agreement or signing one, and you contemplated a term of service, make sure that this is clearly reflected in the document. 

Confidentiality - Most businesses and employers will take measures to put their employees and contractors on notice that its considers its data, systems, processes, lists, diagrams, and other information as confidential.  The Employer will restrict the employee or contractor's use of that information by setting terms on how such information may be used, and set limitations on that person's authority to use that information.  These clauses typically contain a continuing duty in perpetuity for an employee or contractor to maintain the confidentiality of information. 

Non-Compete / Non-Competition - Most businesses and employers will restrict an employee or contractors' ability to work or sell information to its competition or set up a competing enterprise.  Any non-compete must be reasonable.  It cannot impose draconian conditions that eliminate a person's ability to work for a different employer. Non-compete agreements are reviewed on a case by case basis, and a well-drafted and reasonable agreement will be enforced by a Court. In other words, the business or former employer may obtain an injunction that legally prohibits you from working for a competitor.  Most, if not all, employers now ask whether you are subject to a non-compete agreement prior to commencement of work.  The reason is that a potential employer can also incur liability by hiring an individual who is subject to this type of restriction.  

If you are a business that desires to set out the terms of your engagement with employees or contractors, or have questions about an agreement, please contact the Law Office of Stefan Cencarik, PLLC at 617-669-9780. We represent clients in the Boston and North Shore areas, including Boston, Cambridge, Lynnfield, Woburn, Burlington, Andover, Saugus, Peabody, and the surrounding towns and communities.