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Is an employee contract needed in an at-will state like Colorado?

On Behalf of | Jun 11, 2020 | Uncategorized

Some states have strict parameters for employment relationships, while others allow both workers and employers to terminate unemployment relationship for a wide range of reasons without legal consequence. Colorado is among those at-will employment states whose statutes allow a company to end an employment relationship without notice and allow the same termination rights to workers.

The law in Colorado does note specifically, however, that companies can create employment contracts that will generate more specific employment parameters, including an obligation for a worker to give notice or the company to provide severance pay.

Does your company need to execute employment contracts if it operates in Colorado? 

Employment contracts can offer substantial protection for the company

When your company hires new workers, you probably do a background check or at least verify their references, experience and education, if applicable for the position. During their initial training, you can potentially have the new hire sign in an employment contract in consideration of the job offer.

A carefully drafted employment contract can protect your company from all kinds of liabilities associated with hiring people. Businesses will need different forms of protection, which means that the creation of a unique document tailored for your business and even the specific position is often wise. For example, companies that have a sales roster of clients may require that staff with access to this list sign a nondisclosure agreement so that they can’t share it with others.

It is also common for companies to have executives and skilled professionals sign non-compete agreements that prevent someone from taking company concepts and using them to start their own business or selling them to a competitor. Finally, describing your stance on things like sexual harassment and creating a reporting structure within the employment contract or handbook allows you to establish a standard for your workers.

The contract does not need to change the at-will status of the worker

For some companies, offering a severance package or similar stability who an employment contract and help them make a more competitive offer to that worker. For the most part, however, there is no obligation for an employment contract to nullify the at-will protections extended under Colorado law.