Employment Agreements: Best Practices in Florida

The Complex Nature of Employment Law

Labor and employment law is the name given to the set of laws that cover the relationship between workers and their employers. It’s an incredibly complex area of the law with overlapping applicable federal, state, and local laws and regulations that an employer may or may not be subjected to.

For example, many federal rules and regulations only apply to employers of a with a certain number of employees, or that make over a threshold amount, or that participate in interstate commerce. But, even if an employer does not meet any requirements to be governed by federal labor rules, they may still have to comply with the labor laws of the state they operate in.

But, state employment laws will only apply to employees working in that state. So, if you have a remote employee that lives in another state, your employer-employee relationship with that employee may be governed by the laws of the state where the employee lives, not the state you’re operating in.

To make the issue even more granular, local laws can vary employment requirements, so that an employer cannot lawfully engage in a course of action in one county or municipality but could lawfully do so in another, even though both counties are in the same state.

You'll Lose a Lawsuit Withot Properly Drafted Contracts

Given the highly localized nature of employment law, and the potential for fines that could easily reach into the tens of thousands or hundreds of thousands of dollars for violations, you should not just haphazardly download a template off the internet and hope it works.

Indeed, your human resource documents, which includes things like offer letters, employment agreements, employee handbooks, and restrictive covenants, should be customized and drafted for the applicable federal, state, and local laws of the counties your business is operating in.

Florida Employment Agreements

If you’re operating a business in Florida and you’re getting ready to start hiring employees, or you’ve been wondering if the employment agreements you’ve been having people sign would stand up in court, here are some considerations to ensure best practices.

To Define The Term of Employment Or Not?

Florida is an At-Will Employment state by default, meaning that the employer can terminate the employee at any time, no cause required. However, at-will employment gives the employee the same right, and allows them to quit at any time, no reason required.

If an employment agreement does not provide a term, Florida law presumes the employment is at-will. This can be changed by including a Term, or amount of time the contract is to be effective, in the employment agreement. During the Term of the employment agreement, however, you cannot fire the employee without cause. If you fire the employee without cause, you've broken the contract and could be found liable if sued. The opposite is also true, usually an employer cannot sue an employee for quitting their job, but if an employment agreement includes a term and the employer can prove the damages they've suffered, it may be possible to bring suit.

Once the term in the employment agreement has ended, both parties are relieved of their obligations, so you can fire the employee then. If you’d like to make any changes to the nature of your relationship with the employee, including retain the employee after the term of the employment agreement expired, you should have them sign a new contract, even if the only change is the effective date (the start date) of the contract.

Get It Signed and In Writing: Non-Competes Agreement & Arbitration Agreement Included!

It should go without saying that your employment agreement should be in writing and that your employees should sign these agreements. This is doubly true your employment contains a term that is longer than one year. Contracts that cannot be completed in a year are subject to the Statute of Frauds, which requires certain contracts to be in writing and signed by the party to be charged to be enforceable. If you reserve the right to fire an employee for “cause” you should define what “cause” means in that context.

You may want to include a Noncompetition Agreement, which is a contract that can prevent an employee from leaving you to work for a competitor. Or, perhaps you want an Arbitration Agreement, which is a contract that can resolve many employee lawsuits through arbitration, a quicker and more cost-effective alternative to going to court.

However, to be enforceable these agreements must be signed by the party they will be enforced against. So, if you want to stop a former employee from competing against you, you absolutely must have their signature on a Non-Compete Agreement where the former employee agrees to not do so. Similarly, if you’d like to save time and money by resolving an employee's lawsuit through arbitration, you will not be able to do so if you don’t have that employee’s signature on an Arbitration Agreement covering the type of lawsuit the employee has brought.

Odds are you’ll have the most leverage at the start of your employer-employee relationship, when it is new, and the employee may be on introductory probationary period. Since they will already be expecting to sign other paperwork when they sign the Employment Agreement, including your Noncompete Agreement and Arbitration Agreement along with it is an effective way get all of these contracts signed at once.

Keeping the Employment Agreement and Employee Handbook Separate From Each Other

Your Employment Agreement and Employee Handbook should be two separate documents and should be treated as such.

An Employment Agreement is a contract between you and your employee. It should include at least: the start date, duties & responsibilities, salary & benefits, and the term of duration or statement employment is at will. If an employer violates an employment agreement, the employee can sue them for breaching the Employment Agreement. This potential for breach of contract liability is why you want to limit the scope of an Employment Agreement.

Employee Handbooks, on the other hand, do not give rise to enforceable contract rights. This is well-established under Florida law. An employer cannot be sued for breach of contract if they violate a policy statement in an employee handbook. However, if a violation of an Employee Handbook policy statement also constitutes a violation of federal, state, or local, another cause of action could be maintained.

You need to keep your Employment Agreement and Employee Handbook separate because if you place policies that should be in an Employee Handbook in your Employment Agreement, you’re turning these policies into enforceable contract terms.

So, while you want your employees’ signatures on both your Employment Agreement, you should put in writing that the Employee Handbook is not a contract and get a signed acknowledgement from your employees that they’ve received your Employee Handbook, even if it is not required by Florida law.

PLEASE NOTE: This is a general overview of private employment agreements for non-executive employees under Florida law, there may be additional or different requirements based on the industry you work in or if your company falls within the scope of federal labor regulations.

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