Confidentiality agreements in Texas play an important role in running a business legally. Today's business world is connected globally and is very competitive, so it's critical that companies secure their intellectual property, trade secrets, customer relationships, human resources, and technology. One of the most common ways to ensure that a business's assets are secure is through non-competition, non-solicitation, and confidentiality agreements.

However, these documents aren't as powerful as they once were. Confidentiality agreements can restrict where a person can work, so many courts have started to limit their scope and how strictly the documents can be enforced. Many business leaders don't realize that their non-competition and confidentiality agreements don't fully protect their company until it is too late.

In order to draft a contract that protects confidential information and trade secrets and that can actually be enforced, it is often useful to hire an experienced business transactions lawyer.

Texas Employment Contracts

Because Texas is considered a “right to work” or “employment at will” state, employees and employers don't have to sign employment contracts. That means that an employee who is classified as “at will” can quit at any time for any reason. On the other hand, an employer can also terminate an “at will” employee for any reason, except for illegal bases like racial or gender discrimination.

Although employment contracts aren't required, a large number of employers in Texas still use them. These contracts can be long and full of legalese, making them difficult to understand for employers and employees, but they often come with many advantages and protections for both parties.

Job Descriptions

Describing an employee's job title and responsibilities is the most important part of an employment contract. Adding this clause makes it clear to the employee what tasks they will be expected to complete and what things aren't part of their job responsibilities. The job description can also include things like how the employee's performance will be measured, the level of performance that is expected, and the quotas the employee is expected to achieve.

Clarifying these details at the beginning can help prevent confusion and mistakes later. The employee knows what is expected of them and knows that their employer can't just change their job duties later for no reason.

Compensation Clause

Another vital aspect of the employment contract lays out how an employee will be paid and what benefits he or she qualifies for. Important things to identify in this section include:

  • Whether the employee is salaried or paid by the hour
  • If overtime will be paid
  • How much (if any) sick and vacation time is given
  • What other benefits are offered, such as insurance or retirement plans
  • Any perks, such as bonuses or raises.

Drug Testing Clause

It is common for employers to require their potential employees to pass a drug test before they can begin working. Many of these employers also prohibit their employees from doing drugs while they are employed and may subject their employees to random drug testing.

The details of these tests should be outlined in the employment contract. The employee is also required to sign a medical release form that allows their employer to access the results of the tests.

Employee Termination Clause

An optional clause for an employment contract includes a specific time period that the employment will last. Once that time period has elapsed, the employee's employment automatically ends. This can be avoided if both parties agree to renew the existing contract or extend it for another set period of time.

However, most contracts don't include a set time period for employment. When this is the case, the contract should detail the scenarios that would cause the employee to be terminated for good reason. Legally, this type of termination is known as “for cause.” The contract should also state what would cause an employee to be terminated without a justifiable reason, or “without cause.”

If an employee is terminated without cause, they typically receive severance pay and other benefits, which should be outlined in the contract. An employee's right to challenge their termination should also be included, with steps the employee can take to fight the decision.

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