Do I Need an Employment Contract?

If you currently have employees, or if you are thinking of adding employees to your growing business, you have probably wondered whether you need a formal employment contract.  There are many benefits to having a written employment contract.  However, a formal written contract is not always necessary.  Written employment contracts make the relationship between employer and employee clear by ensuring each party understands its obligations to the other, but they can also result in added liabilities for the employer.

The first questions to consider are how long you anticipate the employment relationship will be and how much discretion you want to separate employees from their employment with you.  Generally, employment relationships in Montana are governed by the Wrongful Discharge from Employment Act (“WDEA”), which allows an employer to terminate an employee only in certain circumstances.  However, written contracts for a specified period of time are usually exempt from the requirements of the WDEA.  Thus, if you know an employee is only going to be employed by you for a finite period of time, a written employment agreement governing the terms of that relationship makes sense.

Other valid reasons for written employment agreements include defining the employment relationship when the employee will have a great deal of discretion and decision-making authority, such as a management position.  Although the WDEA may still apply to these written agreements (if they are not for a finite period of time), clarifying the authority, duties, and expectations for your employees makes good sense.  Additionally, if you intend to have an employee agree to other terms as a condition of his or her employment, it is a good idea to have an employment contract.  For example, if you have an employee handbook and a Non-Disclosure Agreement that you want the new employee to abide by, even if only for a short time, then it makes sense to append those documents to an employment contract that provides clarity for both employer and employee.  If you are hoping this employee will stay with your company for a long time, whether an employment agreement is necessary or advisable depends on the specific needs of your business.

A clear and thorough employment contract assists employers in defining the employment relationship because it takes out the guesswork for the employer, the employee, and any third party who may be helping resolve a dispute between them.  If you are not sure whether you need an employment contract for your growing business, or if you would like your current contracts reviewed and updated, Jones Law Firm can assist you in adding clarity and peace of mind to your employment agreements.

How to Collect when a Customer Does Not Pay

An issue that we regularly assist many of our business clients with is collecting on overdue invoices.  Many businesses end up writing off a substantial portion of overdue invoices because they do not want to deal with the headache and cost of collecting.  For this reason, it is important to include language in your invoices to make collecting overdue payments a little easier on you and your business.

Depending on the type of business you have, overdue invoices may be very large, or they could be fairly small.  For smaller invoices, the costs of collection can accrue quickly, often making it more economical to simply write off the amounts owed.  One way to combat having to take a loss in this way is to include language in all invoices allowing you to recover the reasonable costs of collection and attorneys’ fees, as well as interest on the amount owed or a late charge for a failure to timely pay the invoice.

Including these fairly simple terms within your invoice will ensure that if you do need to have your corporate attorney or a collection agency assist you in collecting on overdue invoices, you can recover the costs expended in collecting the debt.  Furthermore, it provides you with some negotiating power to encourage settlement of debts that are owed, in an effort to avoid litigation.

If you would like help modifying your invoice template to include these terms, Jones Law Firm is happy to help.  Or, if you have overdue invoices that you need help collecting, Jones Law Firm can also assist.  Collecting on overdue invoices does not have to be daunting or frustrating – with the right preparation and help, you can greatly reduce business losses resulting from unpaid invoices.

Confidentiality and Non-Disclosure Agreements: what are they, and do I need one?

For the first Jones Law Firm blog article in our “Business Owners’ Series,” we thought it would be best to start simple and discuss something we deal with regularly: Confidentiality and Non-Disclosure Agreements (“NDAs”).  Most of our business clients have dealt with at least one NDA in a range of contexts.  This article will explain when having an NDA is advisable and what is typically included in the NDA.  If you are a business owner, you should consider having a basic form NDA on hand to protect your valuable confidential information.

Most business owners are familiar with NDAs in the context of purchasing or selling a business, and this is certainly a circumstance in which an NDA is appropriate.  When confidential, proprietary, and financial business information is going to be shared with anyone outside your organization, you want to protect that information from public disclosure where your competitors could potentially access it.  However, purchase or sale of a business is not the only time you may want to protect your information.  Any time you enter into a contract with a vendor, subcontractor, or customer that requires disclosure of proprietary information, such as client lists, sales information, intellectual property, marketing strategies, training materials, industry specific methodology, or know-how specific to your business, an NDA is advisable.

Additionally, NDAs are extremely useful in the employment context.  Jones Law Firm regularly prepares NDAs for clients to protect proprietary information from dissemination by employees.  Just as you do not want your confidential and proprietary information getting out through a business transaction, you want to ensure your current and former employees protect this information both during and after their employment with your company.  This ensures that an employee can’t share proprietary information to competitors without clear consequences.

So, what things are covered in a basic NDA?  An NDA begins by listing the parties and describing the confidential or proprietary information that the parties agree not to disclose.  The NDA should provide instruction to the parties as to how to designate the protected information to avoid inadvertent disclosure.  The scope of protection needs to be defined: how will the parties protect the information?  Next, it is important to clearly state what will happen if the information is improperly disclosed.  Many NDAs provide for injunctive relief, allowing the parties to quickly prevent further disclosure and damage to the company, as well as damages for any monetary loss caused by the disclosure.  The NDA also needs to have a term – how long will the confidential information exchanged be protected?  Finally, NDAs will often include other miscellaneous terms such as exceptions to proprietary information, non-solicitation and non-compete clauses, choice of law, assignability, and attorneys’ fees.

If you are a business owner not currently using NDAs or if you are considering selling your business or a portion of your business, Jones Law Firm can help.  Please contact us and we would be happy to discuss your situation and assist you in putting together an NDA tailored to your specific needs.

Jones Law Firm Blog: Business Owners’ Series

The Jones Law Firm Blog seeks to provide short, easy to digest information on timely legal topics.  For 2021, Jones Law Firm’s blog articles will primarily focus on the needs of business owners.  Check back here regularly for informative articles in Jones Law Firm’s “Business Owners’ Series.”  We are excited to provide our clients and potential clients with this additional service!

Jones Law Firm Occupies Historic Montana Power Building

Jones Law Firm is pleased to be relocating to downtown Billings in the Fourth Floor of the Historic Montana Power Building. Jones Law Firm purchased the Fourth Floor at the end of 2020. We are excited to be joining the vibrant downtown Billings scene. Jones Law Firm’s new address is:

Jones Law Firm, PLLC
115 N. Broadway, Suite 410
Billings, MT 59101

Emily Jones tapped for AG Transition Team

Jones Law Firm’s Emily Jones has been selected to serve on the Transition Advisory Committee for Attorney General-Elect Austin Knudsen.  Emily is excited to bring her 12 years of civil practice and litigation experience representing Montana small business, cities and towns, nonprofits, and individuals to the table to assist AG-Elect Knudsen in his transition to the Montana Department of Justice.  Emily joins 11 other Montanans selected for the transition team.

“I’m excited to have such a great group leading our transition,” Attorney General-Elect Austin Knudsen said. “Our committee represents a broad cross-section of Montanans that will help us put together a capable, hardworking team to lead the Department of Justice.”

The Department of Justice is Montana’s top law enforcement and legal agency with nearly 900 employees across the state.