As a business owner, finding ways to protect your company isn’t just a good idea—it’s essential to your success. And one of the most important things you can do is make sure the people you hire will keep your company’s sensitive information safe and out of the hands of your competitors. Employment contracts can help you do just that. But are they truly legal and enforceable in New York? Your trusted Albany business law attorney explains.

employee contract

What Is an Employment Contract?

Before we take a look at whether employment contracts are legal, you first need to understand what they are and what they can cover. Employment contracts are legally binding documents that explain both the employer’s and employee’s obligations, responsibilities, duties, and expectations. 

The contract may also outline common company policies like paid time off, required working hours, compensation, and the types of benefits you’ll offer.

The contracts must be in written form and signed by both the employer and the employee. Note that these contracts are different from offer letters. Even signed offer letters simply prove that you and the employee agree to the offer’s terms.

Are Employment Contracts Legal?

In New York, employment contracts are legal and they’re something many employers should consider using as part of their hiring process. They can protect you from liability and give employees guidance and a firm point of reference for how they need to conduct themselves when working for your company. 

But there are some provisions that are not enforceable. This includes the following:

  • Non-compete agreements: These agreements restrict employees’ ability to work for your direct or indirect competitors while they’re working for you or after they leave your company. These agreements used to be standard, but New York attempted to make them illegal in 2023. While this was ultimately was vetoed by the Governor, it stands to reason that further changes to this part of the law are forthcoming.
  • Old and outdated laws: If the contract hasn’t been updated to reflect recent labor law changes, the agreement may be unenforceable. 
  • Unreasonable duration: In some instances, contracts without clear end dates can be invalid. 
  • Verbal-only agreements: Contracts must be written and signed by both parties to be legally enforceable in New York. Verbal contracts and agreements are not typically enforceable unless the term of employment is temporary or shouldn’t last for more than one year.

If you’re not sure if your current contract is enforceable, the best thing you can do is work with an Albany business law attorney and let them review your contract for you.

Contact gold law firm today to schedule a consultation

Employment contracts are something that can be hugely beneficial for businesses of all sizes. They protect both your company and your employees in the long run while also providing a clear outline of expectations for both you and your employees. But creating those contracts so they’re fully enforceable isn’t always simple. That’s why working with an Albany business law attorney is a good idea.

At Gold Law Firm, we’re proud to help New York business owners and employees make sure their contracts are legally enforceable. Contact us today to schedule an appointment and let us review your contracts before you send them out or sign on the dotted line.