Employment Agreement

Illinois is an at-will work state, which means employers don’t need to provide a written employment agreement to employees. In most cases in the state, employees won’t have such a contract. However, there are circumstances when both the employer and potential employee will feel an employment agreement is worthwhile. Below are some of the typical clauses an employee can expect to find in such a contract.

Confidentiality Clause

Employee contracts are often used for employees who will have access to the company’s specialized knowledge that they’ll use in a way to give the employer a competitive advantage. This clause prohibits the employee from using that knowledge once he or she leaves the company’s employ.

Non-compete Clause

The non-compete clause is perhaps one of the most contentious of the employment agreement clauses. The non-compete clause restricts how and where the employee may find employment after leaving the company. Non-compete clauses will usually include a time limit in which the employee’s options are restricted. It will also specify either certain companies, geographic areas, or industry sectors in which the employee is prohibited from working.

As a restriction on the employee’s ability to find future employment, companies aren’t free to be as restrictive as they’d like to be. The law generally balances the rights of the company to protect its legitimate business interests with the person’s obvious interest in being able to find another job.

In Illinois, a legitimate business interest on which an employer can base its non-compete clause includes protecting confidential information, customer lists, company reputation, and goodwill. In fact, the Illinois courts are directed to assess the complete totality of the facts and circumstances of the specific case when deciding if the non-compete clause in question can be enforced or should be held invalid.

Works for Hire and Ownership of Inventions Clauses

These types of clauses give the employer legal ownership of any work product created by the employee during the course of his or her employment. This clause is particularly important in agreements regarding jobs that create intellectual property. For example, this type of clauses would mean that the company employing a writer owns the copyright to works created, not the writer. The same applies for engineer or inventors who create anything that can be patented. With this clause in the contract, the company owns both the right to file patent and will be the owner of the patent.

In some cases, employees who create intellectual property for their employers may also have a clause in their contract that allows them to share royalties or receive some other compensation for the commercial value of their work.

Other Common Employment Contract Clauses

  • Exclusive employment – prohibits employee from working for similar business while also working for this employer.
  • Termination – clarifies the scope of employment and the grounds on which either party can terminate the agreement.
  • Dispute resolution – specifies the method for the parties to resolve disputes arising regarding the agreement, which usually means arbitration.