Employment and Severance Agreements
Most non-union, private sector employees in California are "at-will," meaning that there is no contract of employment and they are free to quit, and can be terminated, at any time, and for any or no reason. However, employers and employees may sometimes benefit from entering into a contract of employment to provide stability and certainty to the arrangement, and to contractually fix terms of employment and compensation for a set period of time. Such contracts often contain post-employment promises to protect the trade secrets of the employer or to limit access to employees and customers, and they may also state the circumstances under which employment may be terminated and the severance benefits that he or she is entitled to receive.
Many employment contracts cover the payment of commissions including when the right to receive a commission vests and the percentage and calculation of the amount. Contractors and consultants also often sign contracts with employers defining the scope of work they will perform and how they will protect the interests and information of the employer.
Even where there is no contract, many employers offer employees severance payments in exchange for the employee's promise not to sue the employer. Because such agreements waive potentially valuable legal rights of employees they must meet specific requirements under federal law, particularly in the area of age discrimination. Such agreements normally direct the employee to consult with an attorney before signing, which is a wise idea. Severance agreements are normally binding if signed.
Other common agreements signed by employers and employees include agreements to submit employment claims to arbitration in lieu of a lawsuit, and agreements to protect the trade secrets of employers. If properly drafted and properly presented, such agreements are normally enforceable whether presented prior to being hired, or later during the employment period.
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