№ AUSTTX
DS
Attorney
Derek Sullivan
Sullivan & Associates
Business LawIntellectual Property
- City
- Austin
Business Law · Sub-Practice
Employment Agreements & Business HR Law
The most expensive employment problems for businesses are the ones that start with a bad agreement — or no agreement at all.
§ Overview
What your situation actually involves.
Employment agreements, offer letters, non-competes, separation agreements, and workplace policies define the legal relationship between a business and its people. Getting these right from the start is far cheaper than litigation.
Business employment law from the employer's perspective covers a wide range of documents and policies: offer letters and employment agreements (at-will vs. for-cause, compensation structure, duties, and benefits); confidentiality and non-disclosure agreements (protecting trade secrets and business information); non-competition agreements (restricting where employees can work after leaving — highly state-specific, with some states barring them entirely); non-solicitation agreements (restricting the ability to recruit colleagues or pursue customers after leaving); equity compensation agreements (stock options, restricted stock, and vesting schedules); severance and separation agreements (releasing claims in exchange for additional compensation); employee handbook and workplace policies; and independent contractor agreements (designed to properly classify the relationship and document the scope of work). An employment attorney advises on which agreements are enforceable in the relevant state, how to structure them to withstand legal challenge, and how to handle terminations and separations in a way that minimizes litigation exposure.
§ Key considerations
- ▸At-will vs. for-cause employment — the default and how agreement language affects it
- ▸Non-compete enforceability — varies dramatically by state; unenforceable in California, limited in many others
- ▸Non-solicitation agreements — generally more enforceable than non-competes but still state-dependent
- ▸IP assignment — employees should assign all work IP to the employer; contractor agreements require explicit assignment
- ▸Equity documentation — option grants, vesting schedules, and 409A valuation compliance
- ▸Separation agreements — OWBPA requirements for employees over 40; consideration period and revocation rights
§ How attorneys approach this
- ›Identifying the employment relationship and what legal protections are appropriate
- ›Drafting agreements that are enforceable in the states where employees work
- ›Reviewing existing offer letters and agreements to identify gaps and risks
- ›Creating compliant employee handbooks and workplace policies
- ›Advising on termination procedures to minimize wrongful termination exposure
- ›Drafting and reviewing separation agreements with proper release language
“Non-compete agreements are the most misunderstood document in the employment attorney's toolkit. Many businesses use them universally — every employee, at every level, signs the same non-compete — without understanding that (a) courts in many states won't enforce overly broad non-competes regardless of what the agreement says, (b) California, North Dakota, Oklahoma, and several other states ban most employment non-competes entirely, and (c) the FTC has proposed rules that would limit them nationwide. A non-compete that is unenforceable provides no actual protection — it just creates friction and potential liability for the employer. A well-targeted non-solicitation agreement protecting specific customer relationships and trade secrets is often far more defensible and more practically useful than a broad non-compete.”
§ What to look for in an attorney
- 01Multi-state employment law experience — if you have employees in multiple states, the laws vary significantly
- 02Non-compete expertise — enforceability is state-specific and actively changing (FTC rulemaking)
- 03HR compliance experience — wage and hour, classification, and leave law compliance
- 04Equity plan experience if you grant options or restricted stock
- 05Termination and separation experience — this is when employment law risk is highest
- 06Proactive approach — an attorney who helps you build systems, not just react to crises
⚖️
§ Ask these at your consultation
6 questions that matter
- ❓Are my non-compete agreements enforceable in the states where my employees work?
- 💰Do my offer letters or employment agreements inadvertently create "for cause" employment?
- 🔍Do I have proper IP assignment from all employees and contractors?
- 📋What should my employee handbook cover to protect the company?
- 💬How should I handle an upcoming termination to minimize legal risk?
- 💡Are my workers properly classified as employees vs. contractors?
§ Frequently asked questions
Common questions about employment agreements & business hr law.
Q 01
Can I require all new hires to sign a non-compete?
You can require it as a condition of employment, but whether it's enforceable depends on the state. California, North Dakota, Oklahoma, and Minnesota (as of 2023) generally prohibit employment non-competes. Many other states enforce them only to the extent "reasonable" in scope, duration, and geographic area — and courts often narrow or void provisions they find excessive. Colorado requires disclosure of non-compete terms before the offer stage. The FTC's proposed rule (status evolving as of 2025) could further limit them nationwide. For senior employees with access to genuine trade secrets, a carefully tailored non-compete may be enforceable. For rank-and-file employees, a non-solicitation agreement is typically more defensible.
Q 02
Does my employee handbook create contractual obligations?
It can — and often does, unintentionally. Employee handbooks that describe progressive discipline procedures ("we will issue a written warning before termination"), for-cause termination standards, or specific complaint processes can be interpreted by courts as implied contracts that limit at-will employment. This is why well-drafted handbooks include explicit disclaimers that the handbook is not a contract, that at-will employment is preserved, and that the employer retains the right to modify policies. An employment attorney can review your handbook to identify and fix provisions that inadvertently create unintended obligations.
Q 03
What is the WARN Act and when does it apply?
The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100 or more employees to provide 60 days' advance notice of plant closings or mass layoffs affecting 50 or more employees. Many states have "mini-WARN" acts with lower thresholds — New York's WARN Act covers employers with 50 employees, for example, and California's triggers at 75 employees. Failure to provide required WARN notice results in liability for back pay and benefits for the notice period. Exceptions exist for unforeseeable business circumstances, natural disasters, and faltering companies seeking capital — but these exceptions are narrowly interpreted. Any significant workforce reduction should be reviewed with employment counsel before announcement.
Q 04
What should a separation agreement include?
A separation agreement (sometimes called a severance agreement) exchanges additional compensation or benefits for the employee's release of legal claims against the company. Key components: a clear description of the severance consideration; a comprehensive release of all known and unknown claims; confidentiality provisions; non-disparagement language (often mutual); cooperation requirements for ongoing litigation or audits; and reaffirmation of existing obligations (non-compete, non-solicitation, confidentiality). For employees 40 or older, the Older Workers Benefit Protection Act (OWBPA) requires: the release must specifically mention ADEA (age discrimination) claims, the employee must have 21 days to consider (45 days in group layoffs), and 7 days to revoke after signing. Failure to comply with OWBPA invalidates the age discrimination waiver.
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