Employment Contract

k130a · November 2004

Company "A" a non U.S. Corporation has two subsidiaries in the U.S. - "B" (a GA corp) and "C" one had no employees and the other "B" (a Delaware corp) had about three employees.

Company "A" had opportunity to snatch up former employees of a bankrupt company in Feb/March and thought it would be a great idea to enter into Employment Contracts to show the employees that Company "A" was a solid company.

There were about 40 employees including Executive members.

Since March - the "B" subsidiary filed to do business in Texas and the U.S. corporate office was set up and all W-4, etc are with Company "B" Other new hire paperwork was completed I-9's or W-4 not consistently on the original group hired but under Company "B". Health Insurance, Dental, Life, 401(k) is all in Company "B"

Newly hired employees are hired to work under Company "B" - some have contracts under Company "A" and some don't.

Executive Team wants to have Employee Handbook, but not be an employer-at-will - because they (the Company "A" group have not operated in U.S. and not clear about the employer-at-will) and want a solid non-compete/confidentiality Agreement and think it's bad business to not have Employment Contracts even for receptionist, etc.

Question? Are the original employees still covered under the Contracts with Company "A"? Should they all be "rehired" under Company "B" - and start all over?

This is more difficult to explain in a forum, I have other issues... like employees that are hired out of the Texas office, but reside in other States and are seasonal in a sense - fliing for unemployment; Work comp issues in Oregon and myriad of other fires I put out daily!!!!!

System · November 2004

My appologies, but I could not follow the company - I lost myself in Delaware or Texas somewhere. But your question in reference to employment contracts is a bit vague. Why do you have them? Are they contracts that commit an employee for a certain length of employment or are they reimbursement contracts; meaning that the employee agrees to reimburse the company if he/she leaves prior to the end of the term?

I think we can help with a little more information.

KathiHR · November 2004

I'm sorry to say that this is just too complicated for me to sort through on a Monday morning...but I did catch one part - bad business to not have employment contracts on all employees??????? I'd say just the opposite - its bad business to enter into employment contracts with all employees. There's a good reason why we vigorously maintain the at-will relationship. And as for a "solid" non-compete agreement, I'm not sure that's possible. You can get them signed, but they're very difficult (if not impossible) to enforce. I'm assuming you had an employment attorney that drew up all those contracts, so I'd say its time to give them a call & have them sort through all this. If you don't have an employment attorney, then you most definately need to consult one. Good luck!

Don D · November 2004

You need an attorney who is at minimum an American citizen to speak to all of this. I agree that it's terribly unwise to have all these employment contracts, even, you say, for the receptionist. What in blazes is your executive team thinking? And they want to avoid the at will relationship. Sounds as if they are trying to find a way to bind employees to them. HR shouldn't be in the middle of this one until after the company attorney, an American citizen, has sorted it out and put it all in place.

Employment Contract

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