What protective provisions belong in an employment contract?

Employees help you realize and reach your business’s full potential, but you want to ensure you hire the right people. Having a well-written employee contract helps, but how do you protect your company and your investment in employees?

The Council of Smaller Enterprises offers examples of common protective provisions in employment contracts. Learn how to take care of yourself and your business with the right legal documents.

Work for hire

If a position requires employees to create techniques, products or anything involving intellectual property, consider including a work for hire provision in the agreement. That way, you own the intellectual property and creation, not the employee.


With the non-competition provision, your employees cannot work for or invest in competitors while under your employ and for a time afterward. The employee also cannot start a competing company while the provision remains in effect. Take care to establish a sensible provision regarding geography and time.


Non-solicitation and non-compete agreements often go hand in hand. With a non-solicitation provision, an employee cannot talk about, solicit or accept a job from your competitors.


Do you expect employees to make personal creations using company time, equipment or funds? If so, you may want to include an assignment provision on the employment agreement. The provision requires your workers to assign the creation of anything that exists outside the work-for-hire provision.


You may need to share sensitive or confidential information with your staff for them to perform their jobs. A confidentiality provision forbids employees from sharing confidential information, and they must not reveal company secrets accidentally.

Employment agreements protect employees and companies equally. With the right provisions, you give yourself and your workforce peace of mind.