CASE STUDIES

UTAH MANUFACTURING COMPANY NEEDED EMPLOYMENT CONTRACTS FOR KEY STAFFERS

PRACTICE AREA: BUSINESS TRANSACTIONS & CORPORATE GOVERNANCE

BACKGROUND

The founders of a unique specialty products and services company in the manufacturing industry were concerned because they had no formal written employment contracts with any employees, including their small, but critical, sales staff. While employee turnover had been rather limited up to that point, improvement in the economy and fast growth in the company’s industry made the founders fear that their greatest assets – their employees – had unclear legal duties to the company and could disclose the company’s critical trade-secret information, such as product formulas and its customer and vendor lists.

In addition, because competitors were beginning to recruit key employees to “jump ship” and leave the company, and because wages were rising rather dramatically in the industry, the founders needed an effective strategy to incentivize key employees to remain the company.

LEGAL STRATEGY

Richards Brandt’s business attorneys drafted written employment agreements for all employees that set out the most important employment terms for each employee, including compensation and confirmation that the lower-level employees were employed “at-will.” The employment agreements included intellectual property protection terms to protect the company’s proprietary information, such as its trade secrets. The employment agreements even confirmed that all ideas or inventions that employees developed pertaining to their employment with the company belonged to the company, and couldn’t be sold or used by a competitor.

To help the company incentive employees to remain with the company and be productive, our attorneys also helped the company establish a special bonus plan that tied the employees’ objective performance results to increased compensation. So as the employees would do better work or obtain improved results, they would earn more. Payment of that bonus compensation was dependent upon the employee’s continued service to the company.

Does your company have updated written employment agreements that protect your company? Does your company need strategies to recruit and retain the best employees? Please contact us to discuss how our firm may help you.

REVIEWS

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