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General rules to note regarding your employee contracts

Your employees are an essential part of the proper function of your business. Therefore, it is critical that you maintain proper relations with them on all fronts. It may be beneficial to stay abreast of employment laws in your state for this purpose.

In general, there are labor laws that all states enforce. In the state of California, there are a couple of additional stipulations that apply. As you cultivate or develop your business, consider these labor codes and how they may affect you.

At-will employment

California is an at-will state, meaning that either the employee or the employer may terminate employment at any time. However, Labor Code section 2924 also states that either party may terminate employment due to a willful breach of duties. In other words, if the employer or the employee does not fulfill the agreed upon duties as laid out in an employment contract, the other party may terminate the agreement.

Noncompetition clauses

Across the country, many companies rely on noncompetition in their employee contracts to protect their businesses. As we discussed in June, noncompete clauses are void under California law. If a California business tries to insert a noncompete agreement into a contract, the clause may lead to costly litigation if the contract purports to restrict a worker from "engaging in a lawful profession" after leaving the business.

It is important to know and understand these codes in order for you to properly draft and enforce your employee contracts. Having a clear contract with limited conflicts may positively benefit your business and employee relations. Take some time to review the codes in detail to determine the best course of action moving forward.

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