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February 2016 • www.CPAPracticeAdvisor.com 33 FEATURE • Non-solicitation agreements prevent a former employee from soliciting a company 's clients, customers, or co-workers afer the employee leaves the company. Employment agreements can also lay out grounds for termination and what qualifes as being fred for cause, such as conviction of a felony, commit- ting theft or fraud, or breaching the employment agreement. Creating an Agreement that Will Not Lead to Lawsuits There are several things employers should consider when creating employ- ment agreements. — TALK TO THE EXPERTS If employers are considering using employment agreements for the frst t i me o r h a v e no t r e v i e w e d t he i r employment agreements in a while, it's a good idea to consult with HR profes- siona l s a nd i n-hou se a nd out side counsel. Tey will have insights into current legal trends and best practices for particular industries, as well as making sure any employment agree- ment complies with applicable law. — THINK ABOUT INCENTIVES Agreements should not be one sided and only beneft employers. Tere needs to be something in it for employees, too. In a 2014 case, an Illinois state appeals court ruled that employees needed to work for a company for at least t wo years in order to have an enforceable non-compete agreement, if there wasn't some other beneft like a bonus. In the case of Prairie Rheumatology Associates, S.C. v. Maria Francis, D.O., Dr. Francis signed an employ ment agreement with PR that included a two-year non-compete. She gave her resignation afer working there for 15 months and resigned afer 19 months. PR sued her to enforce the noncom- pete. Te court sided with her, fnding she did not work there for 24 months a nd t hat she "received l it t le or no a d d i t i o n a l b e n e f i t f r o m P R A i n exchange for her agreement not to compete." — MAKE ARBITRATION AGREEMENTS FAIR Many employment agreements include a n a r b i t r a t i o n c l a u s e , r e q u i r i n g employees to use alternative dispute resolution approaches instead of litiga- tion. Arbitration tends to be cheaper, and the entire process can be much less stressful than going to court. However, a rbit rat ion ag reement s t hat favor employers against employees can be thrown out of court or get employers in trouble with regulators. In 2014, the U.S. Equal Employment Opportunity Commission ("EEOC"), the agency that enforces federal anti- d iscr i m i nat ion law, sued Doher t y Enterprises Inc., which operates more than 140 franchise restaurants, over its bi nd i n g a r bit r at ion e mploy me nt agreements. According to the EEOC, the agreements unlawfully violated employees' right to fle charges of dis- crimination w ith the commission. "Employee communication with the EEOC is integral to the agency's mission of eradicating employment discrimina- tion," said EEOC Regional Atorney Robert E. Weisberg in a statement at the time charges were fled. "When an employer forces all complaints about employ ment d i sc r i m i n at ion i nto confdential arbitration, it shields itself from federal oversight of its employment practices. Tis practice violates the law, and the EEOC will take action to deter further use of these types of overly broad arbitration agreements." In September 2015, a federal judge denied Doherty's motion to dismiss the case. — CONSIDER ALL STATE AND LOCAL LAWS Employers also need to keep state laws in mind. Some states have specif ic leg islation governing employ ment agreements around trade secrets and non-compete agreements. For example, the California Business and Professions Code bans non-compete agreements, with a few exceptions. All aspects of an employ ment ag reement shou ld be thoroughly reviewed by a labor and employment atorney experienced with the particular state's laws. — BE SPECIFIC Te more specifc language and less "legalese" an employment agreement contains, the less likely employees will be able to say they were confused by its terms. With specif ic lang uage and targeted approaches, employers can also better ensure that employment ag reements a re w r it ten to protec t legitimate business interests. Tat also means employment agreements will be m o r e l i k e l y t o s t a n d u p t o l e g a l challenges. Companies should also consider w h e t h e r t h e y n e e d e m p l o y m e n t agreements for each employee. For example, according to media reports, fast food franchiser Jimmy John's has b e e n s u e d o v e r it s non - c om p e t e agreements, which requires employees not to work for a competitor, defned as any business that derives at least 10 percent of its sales from sandwiches and that is located within a prescribed radius of the Jimmy John's shop where the employee formerly worked. While the company's non-compete agreement survived a legal challenge in U.S. Dis- trict Court in Illinois in April 2015, several members of Congress have asked the Federal Trade Commission and U.S. Department of Labor to investigate the legality of these agreements. Conclusion A solid employment agreement should protect the employer's interests, while a l s o b e i n g f a i r t o e m p l o y e e s . I f employers decide that employees need an employment agreement, it should be drafed with the help of experienced employment counsel, in order to help ensure the company avoids litigation and does not end up in court or become the victim of bad publicity. Richard D. Alaniz is senior partner at Alaniz Schraeder Linker Farris Mayes, L.L.P., a national labor and employment frm based in Houston. He has been at the forefront of labor and employment law for over thirty years, including stints with the U.S. Department of Labor and the National Labor Relations Board. Rick is a prolifc writer on labor and employment law and conducts frequent seminars to client companies and trade associations across the country. Questions about this article, or requests to subscribe to receive Rick's monthly articles, can be addressed to Rick at (281) 833-2200 or ralaniz@alaniz-schraeder.com. For more information, please visit CPAPracticeAdvisor.com/10015271