Employment agreements establish the terms and conditions of an employment relationship between an employer and an employee. Depending on the circumstances, an agreement may address compensation, job responsibilities, benefits, confidentiality, intellectual property, termination, dispute resolution, and other matters affecting the employment relationship.

A carefully drafted employment agreement can help both employers and employees understand their rights and obligations and can reduce uncertainty if a dispute later arises.

What Can an Employment Agreement Include?

The terms of an employment agreement depend on the position, the employer, and the nature of the employment relationship. An agreement may address:

• Job duties and responsibilities
• Compensation, bonuses, and other forms of payment
• Benefits and leave
• The duration and conditions of employment
• Confidentiality and protection of business information
• Intellectual property and ownership of work product
• Termination of employment
• Dispute-resolution procedures
• Applicable law and venue
• Other terms negotiated by the employer and employee

Employment agreements may also contain separate provisions or agreements addressing confidentiality, non-solicitation, intellectual property, or other post-employment obligations. The enforceability of these provisions depends on the language of the agreement and applicable law.

Non-Compete Agreements

A non-compete agreement, or covenant not to compete, is a provision that restricts an employee’s ability to compete with a former employer after the employment relationship ends.

Virginia law places important restrictions on the use and enforcement of non-compete agreements. In particular, employers generally may not enter into, enforce, or threaten to enforce a covenant not to compete against a low-wage employee or health care professional. Virginia law also provides that a non-compete is not enforceable when an employer discharges an employee without providing the required severance or other monetary payment, unless the employee was discharged for cause. 

Virginia’s definition of a low-wage employee includes certain employees whose average weekly earnings fall below the statutory threshold, employees who are entitled to overtime under federal law, and certain interns, students, apprentices, trainees, and independent contractors compensated below the statutory hourly threshold. 

Because Virginia’s non-compete requirements are specific and can change depending on the employee and circumstances, both employers and employees should have a proposed non-compete reviewed before signing or attempting to enforce it.

Confidentiality and Non-Disclosure Agreements

Employers may use confidentiality agreements or non-disclosure agreements (NDAs) to protect confidential, proprietary, and trade-secret information.

A confidentiality agreement may identify:

• The information considered confidential
• How the information may be used
• Who may receive or access the information
• How long confidentiality obligations continue
• Exceptions to confidentiality
• Requirements for returning or destroying information
• Remedies for an unauthorized disclosure

Confidentiality agreements can protect information that extends beyond the definition of a trade secret. However, an NDA must still comply with applicable law, and certain disclosures may be protected by law.

For example, federal law provides certain protections for employees, including contractors and consultants, who confidentially disclose trade-secret information to government officials or attorneys for the purpose of reporting or investigating a suspected violation of law. 

Negotiating Employment Agreements

Employment agreements are often negotiable, particularly when an employer and employee are discussing compensation, benefits, responsibilities, termination provisions, confidentiality obligations, or other terms of employment.

An attorney can review a proposed agreement, explain its provisions, identify terms that may affect the client’s rights, and assist with negotiating changes before the agreement is signed.

Enforceability of Employment Agreements

Signing an employment agreement does not automatically make every provision enforceable. The enforceability of an agreement depends on the language of the contract, the circumstances under which it was entered into, and applicable federal and state law.

Certain employment provisions may be restricted or prohibited by law, while other provisions may be subject to specific requirements. For example, Virginia law contains restrictions on non-compete agreements and also regulates other aspects of the employer-employee relationship. 

An attorney can help determine whether the terms of an employment agreement are consistent with applicable law and whether a particular provision may be enforceable.

Breach of an Employment Agreement

Disputes may arise when an employer or employee believes the other party has failed to comply with an employment agreement. Depending on the agreement and circumstances, a dispute may involve compensation, confidentiality, intellectual property, termination, restrictive covenants, or other contractual obligations.

When an employment agreement has allegedly been breached, the parties may have options for resolving the dispute through negotiation, mediation, arbitration, or litigation, depending on the agreement and applicable law.

How Raheen Law Group Can Help

At Raheen Law Group, we assist both employers and employees with employment agreements and related disputes. Our attorneys can help with:

• Reviewing employment agreements before signing
• Explaining contractual rights and obligations
• Drafting customized employment agreements
• Negotiating employment terms
• Reviewing confidentiality and non-disclosure provisions
• Evaluating non-compete and other restrictive covenants
• Advising employers on contractual protections
• Advising employees regarding proposed employment agreements
• Enforcing contractual rights
• Defending against claims involving an alleged breach of an employment agreement

Whether you are an employer seeking to create an employment agreement or an employee considering an agreement before signing, Raheen Law Group can help you understand the terms and evaluate your legal options.

If you need assistance with reviewing, drafting, negotiating, or enforcing an employment agreement, contact Raheen Law Group for a consultation.