Understanding the Different Types of Employment Contracts

Man filling out an employment agreement contract - types of employment contracts concept

Employment contracts are commonly used in companies to outline the rights, responsibilities, and obligations of the employees and employer. However, there are a variety of contracts that can be used, depending on the specific employment situation. Each type of agreement serves a distinct purpose and outlines the terms a party must abide by in order to be compliant with the contract. It’s important to understand the types of employment contracts that can be used and the legal implications that come with each.

The following types of employment contracts may commonly be used in a workplace setting:

Non-Compete Agreements

A non-compete agreement restricts a worker from seeking employment with a competitor or starting their own competing business for a specified period of time. The purpose of these types of employment contracts is to safeguard an employer’s business interests, trade secrets, and confidential information. Under Ohio law, these agreements are usually enforceable as long as they are reasonable and do not impose an undue hardship on an employee.

Severance Agreements

In contrast with an employment contract that is signed by a worker at the time of hiring, a severance agreement is entered into upon separation with the company. It details the rights and responsibilities of each party and specifies any benefits to which the employee will be entitled. Critically, a severance agreement should be carefully negotiated at the outset of the employment relationship.

Fixed-term Contracts

A fixed-term contract is an employment agreement that comes with a start and end date. These contracts often include some of the benefits that would come with a full-time contract but are limited to the period in which the contract is in place. Fixed-term contracts are often used in situations involving seasonal employment and other jobs that are associated with short-term staffing needs.

Freelance Contracts

A freelance contract is a type of employment contract that outlines the terms, conditions, and scope of a project between a freelancer and their client. Unlike with an employee-employer relationship, a freelancer is in business for themselves and not subject to anyone else’s supervision when carrying out their work. A freelance contract is usually limited to a specific project or task and outlines the scope of work, deadlines, and payment terms associated with it.

Consulting Agreements

A consulting agreement is a contract that allows two parties to engage in a business relationship, with one side working as a consultant. While the types of services offered by a consultant can vary, they typically provide advice that is helpful to another individual or company. The agreement entered into between the parties should specify the criteria that they will need to comply with throughout the business relationship, as well as details about pay, expenses, and any fundamental objectives.

Contact an Experienced Ohio Employment Law Attorney

If you are entering into an employment relationship, it’s essential to carefully review any agreement with which you are presented before you sign it. A skillful employment law attorney can evaluate the terms of the contract and negotiate more favorable conditions. Located in Westlake and offering reliable representation to clients throughout Ohio for a wide variety of employment law matters, attorney Chris Lalak is dedicated to advising workers regarding their rights and protecting their interests. Contact Lalak LLC today to schedule a free, confidential, no-obligation consultation and learn how we can help.