Enforceability of Employment Agreements

Contract law governs all employment agreements between an employer and their employees, which may include foreign citizens or nonimmigrants. A contract is defined as an agreement between two or more parties which creates obligations to do or not to do the specific things that are the subject of the agreement. The law provides a remedy for the failure to meet the terms of the agreement, or in other words, for the breach of the contract.

Typically, contracts do not necessarily have to be in writing to be enforceable, however, employment agreements are usually in writing to make them easier to enforce. Such agreements usually cover, for example, the type of work the employee will be engaging in, the amount of pay the employee will be receiving, vacation time, benefits, and a variety of other topics.

Employees are given many rights under the law. The usual examples are: the right to be free from discrimination, the right to not be unfairly dismissed, the right to a safe work environment, the right of being notified of layoff or termination, the right not to be sexually harassed and the right to compensation if injured on the job. It is important to note that labor and employment laws in the U.S. may vary from state to state, and as a result it is imperative to know the rules and regulations of your home state.

Furthermore, for an employee working under a work visa, such as an H-1B, there are certain items built in to such employment agreements under immigration law. In the employment agreement for a nonimmigrant, the employer is required to provide for the reasonable expenses related to relocation costs in the event the employee is let go from the company. These costs may include the payment of airline tickets and other related relocation costs. These clauses are enforceable so long as they are viewed as reasonable.

Employees are also liable in the event the employment agreement contains a restrictive covenant, such as a non-compete clause. The non-compete clause is designed to protect the interests of the employer, such as client lists, trade secrets and other vulnerable and often valuable information. This covenant not to compete essentially means that the employee will not compete with the employer during employment, and will additionally, not compete for a set period of time after employment. In the event of a violation, the employer can seek an injunction through the courts, which would prevent the employee from engaging in competition against the employer. So long as the non-compete clause is fair and reasonable, the courts may impose fines and penalties against the employee.

Due to the possibility of an employee or employer seeking relief from the courts for violations of an employment agreement, it is very important that all parties to a contract be fully aware of its provisions and the rights and obligations contained therein. An agreement should not be signed if the employer or the employee cannot agree in principle or in fact. If it is signed, and the terms of the agreement are reasonable, then it is very likely that U.S. courts would enforce the contract.