Employment is presumed to be on an at-will basis unless the employer and employee have agreed to an employment contract. An employment contract specifically dictates the terms of employment between an employee and employer. Employment contracts can include any variety of terms and often times include: duration of the position, responsibilities of the employee, reasonable grounds for termination, whether employment benefits are included, and arbitration agreements (to solve disputes if they arise). As with any contract, there are pros and cons to hiring an employee on a contractual basis.
Employment contracts are very useful to employers who wish to control the duration and nature of the employee's employment. They also provide an added layer of security for employers who wish to maintain confidentiality of trade secrets or other work product. The contract grants greater control to an employer because it can state the standards for employment, which, if not complied with, can create grounds for termination.
Though a contract can grant greater power to an employer, the contract also implicitly empowers an employee because the employee is bound to his or her position. For instance, if an employer decides that he or she no longer needs the employee's services, the employment contract binds that employer to maintain employment.
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