Drafting Employment Agreements
Carrie Pixler Ryerson
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Overview
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We will discuss provisions you should
consider when drafting employment
agreements
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Bonus topic: severance agreements and
releases
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Introduction
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Be familiar with the applicable State law
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Offer, acceptance and consideration
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Offer Letter v. Employment Agreement
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Independent Contractor Agreement v.
Employment Agreement
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Preamble & Recitals
–  Establishes the parties to the agreement
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This Employment Agreement (“Agreement”) is made as of
July 17, 2013 (“Effective Date”), by and between John Doe
(“Employee”) and Fennemore Craig, P.C. (“Employer” or
the “Company”).
–  Establishes the reason for entering into the
agreement
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The Company is . . . [description of company] (the
“Business”). The Company has developed certain knowhow, techniques, programs and other information relating
to the Business that is proprietary and valuable to the
Company.
Define the relationship between the employer and
employee. Is this an existing employee or new employee?
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Term of the Agreement
–  Specified number of years?
–  At-will?
–  Renewable term?
–  Automatic renewal?
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Termination of the Agreement
–  At-will?
–  Either party may terminate upon ___
days written notice?
–  For cause termination?
–  Death or disability of employee?
–  Sale of assets or dissolution or
bankruptcy of the employer?
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Compensation
–  Salary
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Waiver of treble damages under Arizona law
Benefits
Business expenses
Auto allowance
Professional development expenses
Bonus
Stock
Deferred compensation (ERISA)
Professional liability insurance
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Confidential Information
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Define confidential information
Non-disclosure
Non-use
Return of confidential information
Assignment of employee inventions
Any other unique/proprietary information
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Restrictive Covenants
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Non-solicitation (Limited in California)
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Customers? (anti-piracy or hands-off)
Employees? (anti-raiding)
Length?
Non-compete (Invalid in California)
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Scope?
Length?
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No work?
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Consideration for existing employees
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Restrictive Covenants
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Ensure that the covenants survive termination of the
agreement
Enforcement provisions
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Restrictions are reasonable and necessary to protect . . .
Blue Pencil Rule
Employee acknowledges that the Employer will be
irreparably harmed and that monetary damages are an
insufficient remedy.
Employee consents to enforcement of the covenants
through injunctive relief.
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Additional Representations and
Warranties
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Employee is not subject to another non-compete or
confidentiality agreement
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Cooperate with transition if employee is separated
from the employer
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Exclusive services provision
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Best effort covenant
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Conflicts of interest
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Additional Provisions
–  Remedies
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Arbitration
Waiver of jury trial
–  Indemnification
–  Return of company property
–  Confidentiality of provisions in agreement
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Additional Provisions
–  Choice of governing law
–  Recovery of attorneys’ fees
–  Assignment
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The employer should reserve the right to assign
the agreement to successors to allow for
mergers, consolidations, etc.
If a personal services contract, prohibit the
employee from assigning the contract
–  Severability
–  Choice of forum
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Additional Provisions
–  Non-waiver provision
–  Amendment/Modifications
–  Counterparts
–  Entire agreement
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Severance Agreements & Releases
–  Generally, only offer severance in exchange
for a release
–  Terms of severance
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ERISA issues
–  Cooperation clause in event of government
investigation/litigation
–  ADEA
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Over 40/Under 40
RIF
–  Fair Labor Standards Act claims
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Severance Agreements & Releases
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Non-admission clause
Non-disparagement
Return of company property
Restrictive covenants
Transition clause
Workers’ compensation
EEOC charges (an agreement cannot
prohibit the individual from filing a charge of
discrimination)
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Questions?
Carrie Pixler Ryerson
[email protected]
602-916-5385
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