For the business owner, especially small, family-run businesses, relationships with employees need to be handled properly so as to avoid unnecessary litigation and turmoil within the workplace. As a starter, even with a small business, you should have an employee handbook, which clearly explains the duties and obligations of both employer and employee. Set forth in the handbook should be the company policies regarding holidays, sick days, maternity leave and vacation. Retirement is also an issue which should be explained in the handbook. What is expected of an employee can be generally stated in a handbook–i.e., a duty of loyalty, and agreement not to compete with the business, to not make disparaging remarks, etc. For specific duties of a particular employee, that can be spelled out in more detail in a simple employment agreement.
Besides containing a non-compete clause in the handbook, it should also contain a provision which states that an employee who leaves the company may not solicit the company’s customers, at least not for a specified period of time. It should also state the procedure for an employee who wishes to leave. Lastly, important to the employer, is a provision which states that employees are at-will and can be terminated for any reason. Of course, a business can not legally terminate an employee based on age, sexual orientation, race, etc., one should also be able to terminate an employee who is not performing well.
Of course, the employee handbook should be accepted and signed by the employee, so that the terms are enforceable.