FOR EMPLOYERS OF COMPUTER EMPLOYEES + CONTRACTORS
Employment agreements establish the basis for the employment relationship, setting forth the expectations and obligations of both sides, together with the terms of dismissal and termination. The highly specific demands of the technology industry places added significance on negotiating a definitive and tight employment agreement, as it must protect your business while enabling you to hire the best people and get the most out of them. Ideally, employment agreements are drafted to meet the specifics of the business and the role of the employee.
CERTAIN RISKS *
Ä The value of your trade secrets, intellectual property and business strategies is of the highest priority. As such, you require confidentiality provisions that are clear and concise, thereby deterring employees from stealing your ideas. Also, you need to have an effective mechanism in place to prosecute any transgression for damages, while immediately halting any infringement.
Non-Competition & Non-Solicitation.
Ä Arising out of your confidentiality requirement, is the need to keep employees from using the knowledge they have gained to go directly into competition with yourself and undercut you in the market. Of further concern is the prospect of employees stealing your customers.
Ä The reasons and method for terminating employees is a core feature of every employment agreement. Unfortunately, this aspect of the contract is frequently not given sufficient attention, since there isn’t the interest to contemplate at the outset of a new hiring the negative scenarios that may arise. Fortunately, lawyers have no qualms about playing the devil’s advocate and are capable of structuring the termination provisions in your best interest.
Waiting to Negotiate.
Ä Employment agreements entered into after the employee starts working may not be enforceable, as the courts may hold that the employer’s promise to continue to employ an employee already on the job is not legally valid consideration. Likewise, subsequent changes to the employment agreement may not be enforceable without adequate additional consideration.
COMMISSIONED SALES STAFF
Independent contractor agreements and employee agreements are mutually exclusive contracts, which need to comply with specific operational and drafting requirement, or they can face significant scrutiny from the government and its regulatory operatives. Also, with the highly specific demands of the technology industry, these agreements need to protect your business while enabling you to hire the best people and get the most out of them.
CERTAIN RISKS *
Ä Independent contractor agreements have their own unique set of challenges that technology enterprises need to address, from tax remittances to WSIB contributions to the scope of work undertaken. Unless these are correctly addressed at the outset of independent contractor relationship, and thereafter strictly adhered to, the business can find itself facing significant financial penalties from government regulators.
Ä The value of your trade secrets, intellectual property and business strategies is of the highest priority. As such, you require confidentiality provisions that are clear and concise, thereby deterring your sales representatives from stealing your ideas. Also, you need to have an effective mechanism in place to prosecute any transgression for damages, while immediately halting any infringement.
CONSULTING / CONTRACTORS
When technology businesses engage consultants for individual projects, there is considerable risk of paying more than is necessary for work that does not need to be done. Consulting agreements thus serve to define the consultants’ work, and pay specifically for performance and not unnecessary excesses.
CERTAIN RISKS *
Ä Consultants all too often demand that their form of contract and method of payment be accepted. However, your business is paying the money and you should assume control of the contract and the expectations. Unless you assert your position from the outset, you will be paying more than is necessary and receiving less than you are entitled to.
Lack of Definition.
Ä The terms of a project need to be clearly spelled out in the contract. Every effort should be made to avoid ambiguity and uncertainty, since consultants will rely upon such uncertainty to justify their substandard performance.
Ä Consulting agreements can commit you to paying for inferior work, and even incomplete work. If you want the project done correctly and completed on time, this needs to be set out in the contract – with clear penalties in the event that the consultants fail to perform as agreed to.
* The preceding list(s) of risks is not meant to be exhaustive, to the contrary, it is meant to illustrate a few of the many dangers that can arise when a business fails to retain the legal services of an appropriate lawyer.
Contact computer lawyer Christopher R. Neufeld of Neufeld Legal Professional Corporation at firstname.lastname@example.org or 403-400-4092 for businesses situated in Calgary and Alberta or 416-887-9702 / 905-616-8864 for those businesses situated in the Toronto Business Triangle (Toronto-Hamilton-London, Ontario).
Christopher R. Neufeld, an attorney with Neufeld Legal Professional Corporation, is admitted to practice in both New York (U.S.A.) and Ontario and Alberta (Canada), and represents computer / information technology businesses in the United States and Canada, and foreign technology companies engaged in commercial operations in North America. The law firm has offices in Calgary, Alberta; Toronto, Ontario and Burlington, Ontario. See also www.employerlawyer.ca. COPYRIGHT 2008/12.