chains-1209744

Common Mistakes Startups Make When Hiring Employees: Part 2

Last week, we examined the first in a series of mistakes that Startups commonly make when hiring employees.  (You can read that post here).  Now we examine another mistake Startups commonly make:

Failing to evaluate a new employee’s previous employment details.  

Here are some questions that may not be at the top of your list when hiring a new employee.  At the time of hire, is your new employee violating a noncompetition agreement that they agreed to with their previous employer?  Are they improperly soliciting clients from their previous employer?  Did they bring any intellectual property that would constitute a trade secret violation?  While a court may eventually rule that a noncompetition or nonsolicitation agreement is invalid, that doesn’t mean that your business doesn’t have to fund a defense for hiring an employee who originally signed said agreement.  Performing a simple audit of new hires can save your startup a lot of costs in the long-run if a new hire is shackled by previous covenants.

Next week we will examine the importance properly classifying employees and independent contractors.

This post is not intended to be legal or tax advice.  Formeller & Formeller LLP’s Chicago startup attorneys have helped numerous clients form and operate their businesses.  Our skilled Chicago attorneys can help counsel you with employment issues and assist you with establishing proper employment hiring and employee management procedures .  Please contact our law firm today for a free legal consultation if you would like to discuss employment or operational issues.

Click here to visit the Formeller & Formeller LLP website.

Common Mistakes Startups Make When Hiring Employees: Part 1

While most startups are formed by an individual or a small team of founders, they often plan to hire employees relatively quickly in order to grow their business and increase revenue.  Hiring employees isn’t as cut and dried as it seems.  Failing to comply with employment laws and regulations can have serious consequences for both new businesses and business owners.  Here is the first of four common employment mistakes made by new businesses:

Using Poorly Drafted Employment Documents and Agreements (or failing to use Agreements altogether).  

Often times, as an effort to save on costs and time, startups use improper “form” employment agreements and other related documents.  Worse, some startups fail to have new employees execute certain crucial documents altogether.  These business practices can expose Startups to all sorts of uncertainties and liability.  Proper employment agreements provide protection by clearly outlining the responsibilities and obligations of the employer and employee and by answering specific questions that can lead to future litigation if left unanswered.  For example, can a specific employee be terminated without notice?  Can that employee only be terminated for cause?  If the employee generates work product, who owns that work product?  These details are a few examples of what should be sorted out and clearly defined in a properly drafted employment agreement specifically tailored to your business and industry.

Next week we will examine the importance of an employer doing its due diligence in evaluating an employee’s previous employment details.

This post is not intended to be legal or tax advice.  Formeller & Formeller LLP’s Chicago startup attorneys have helped numerous clients form and operate their businesses.  Our skilled Chicago attorneys can help counsel you with employment issues and assist you with establishing proper employment hiring and employee management procedures .  Please contact our law firm today for a free legal consultation if you would like to discuss employment or operational issues.

Click here to visit the Formeller & Formeller LLP website.

Disclaimer

The purpose of this blog is to deliver news and information that are relevant to our areas of practice. The news and information reported on this blog represent the legal actions of attorneys throughout the United States. Our firm does not claim to represent plaintiffs or defendants in all of the lawsuits, settlements, and jury verdicts reported, only those noted as Formeller & Formeller LLP cases. This blog is not intended to be legal advice. Before considering legal action in a business matter, you should seek counsel from an attorney.