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A California employment contract is a legally binding contract between an employer and an employee that lays out the specific rights and obligations of both parties in the employment relationship. Employment contracts can be used when hiring permanent employees, temporary employees, contractors, and subcontractors.
Some employment issues that may covered in a California employment contract include:
A well drafted employment contract can be used to protect the rights of both the employee and the company. For example, the contract can lay out what circumstances constitute cause for termination which would take away an employer’s ability to fire an employee for no reason under “at-will” employment laws.
On the other side of the contract, non-disclosure agreements and non-compete agreements often included in employment contracts protect an employer’s business interests by limiting an employee from competing against the company or revealing trade secrets.
California has strict laws governing the relationship between employers and employees that can be found in the California Labor Code. California views all employment relationships as contract based even if the contract is verbal.
This means that all contracts – even oral contracts – are enforceable as long as the employee and employer had a “meeting of the minds” when creating the agreement. It is however strongly recommended that all contracts be in writing. Written contracts are more reliable and easier to enforce.
The legal requirements for a California employment contract are governed by California contract laws. This means an employment contract needs to show mutual intention of the parties, there needs to be an offer, acceptance, and an exchange for something of value.
The contract cannot include any unreasonable terms that violate the law or public policy like unreasonable limitation on an employee's ability to find future employment created by an unfair non-compete agreement. In addition, the employer cannot use undue influence or fraud to persuade an employee to sign the agreement.
Employers are not permitted to include provisions in an employment contract that are against the law or violate public policy. Common employment contract violations that will render an employment contract unenforceable include:
Employment contracts come in many forms based on the type of work the company does or the type of employee being hired to complete the job. The three most common types of employment contracts are permanent, fixed term, and consultant agreements.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
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