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Understanding Important Contract Provisions in Employment Contracts in Texas

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Most employees in Texas are at-will employees, meaning there is no contract between the employee and employer. This gives a worker the right to quit for any reason. It also gives the employer the right to terminate an employee for any reason, as long as it does not violate state or federal law, such as anti-discrimination laws. However, more companies in the Dallas-Fort Worth area are starting to utilize employment contracts when hiring.

What Are Common Provisions in Employment Contracts?

If you are asked to sign an employment contract—or any other type of contract—it is critical that you understand the terms, because contracts are legally binding in Texas. Here are some common provisions that may be in yours:

Job Duties 

Your employment contract will most likely have a provision that explains your job description and the duties you will be expected to perform. It may also limit your ability to seek any other employment during non-work hours.

Salary and Benefits

The contract should also state how much compensation and other benefits, such as health insurance, vacation time, and sick leave, you will receive. It should clearly specify whether you are a salaried or hourly worker.

Drug Testing

Depending on your job, your employment contract may include a clause specifically prohibiting the use of illegal drugs and may require you to submit to some type of drug testing program.

Length of Employment

An employment contract can set the length of the employment period. When there is such a provision, employment would be terminated at the end date unless the contract is renewed.

Termination of Contract

Your contract will most likely have a clause that sets out under what circumstances you can be terminated. It may limit the right of your employer to fire you only for cause, which means there must be a good reason for the termination, or without cause, which can be for no reason. If you can be fired without cause, your contract may give you the right to severance pay or other benefits. You may also have to follow certain rules, such as giving a certain amount of notice, if you decide to leave your job.

Arbitration

Some companies will include a provision that any disputes, such as for wrongful termination or an on-the-job injury, must be resolved through binding arbitration rather than a civil lawsuit. This is a type of dispute resolution where the parties select an impartial third-party to make a decision on the dispute after evidence and testimony is presented. When enforceable, an arbitration clause precludes a trial by jury, and there is seldom any opportunity for appeal.

Confidentiality/non-disclosure

Your contract could contain a confidentiality clause that requires you to protect trade and other corporate secrets both during and after your employment. There may be a number of civil penalties for violation of this provision.

Non-compete.

A non-compete clause may prohibit you from working for a similar company after you leave your job. To be valid in Texas, the scope, time period, and geographical area stipulated in the clause must be reasonable and no broader than necessary to protect the employer’s good will.

Non-solicitation.

A non-solicitation provision could prohibit you from soliciting clients or co-workers of your employer if you quit and start a new job, or even if you are terminated, with or without cause.

You should never sign an employment contract or other employment document without having an experienced employment attorney review it for you. Attorney Walt Taylor has many years of experience helping employees protect their legal rights. To schedule your free consultation with him, call our office at 817.380.4888 or contact us online.

Walter L. Taylor
Employment & Medical Peer Review Lawyer helping workers, doctors, nurses, dentists and pharmacists in Texas.
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