California Employment Contract: Definition, Key Considerations

Quick Facts — Employment Contract Lawyers (California)

What is a California Employment Contract?

A California employment contract is a legally binding contract between an employer and an employee that lays out the specific rights and obligations of both parties in the employment relationship. Employment contracts can be used when hiring permanent employees, temporary employees, contractors, and subcontractors.

Some employment issues that may covered in a California employment contract include:

  • Pay rate
  • Working hours
  • Vacation and time off
  • Job duties
  • Employment start date
  • Duration of employment
  • Procedures for discipline and grievances

A well drafted employment contract can be used to protect the rights of both the employee and the company. For example, the contract can lay out what circumstances constitute cause for termination which would take away an employer’s ability to fire an employee for no reason under “at-will” employment laws.

On the other side of the contract, non-disclosure agreements and non-compete agreements often included in employment contracts protect an employer’s business interests by limiting an employee from competing against the company or revealing trade secrets.

Are Employment Contracts Enforceable in California?

California has strict laws governing the relationship between employers and employees that can be found in the California Labor Code. California views all employment relationships as contract based even if the contract is verbal.

This means that all contracts – even oral contracts – are enforceable as long as the employee and employer had a “meeting of the minds” when creating the agreement. It is however strongly recommended that all contracts be in writing. Written contracts are more reliable and easier to enforce.

What Are the Legal Requirements for California Employment Contracts?

The legal requirements for a California employment contract are governed by California contract laws. This means an employment contract needs to show mutual intention of the parties, there needs to be an offer, acceptance, and an exchange for something of value.

The contract cannot include any unreasonable terms that violate the law or public policy like unreasonable limitation on an employee's ability to find future employment created by an unfair non-compete agreement. In addition, the employer cannot use undue influence or fraud to persuade an employee to sign the agreement.

Employment Contract Violations

Employers are not permitted to include provisions in an employment contract that are against the law or violate public policy. Common employment contract violations that will render an employment contract unenforceable include:

  • Minimum wage. Each state has a set minimum wage and employers cannot force employees to accept less than this wage.
  • Lunch and breaks. Employees have the right to lunch and rest breaks. If an employer tries to make an employee sign away their break rights, it could be considered wage theft.
  • Non-compete clauses. Some states enforce non-compete clauses, however; California has very strict requirements for these limiting contracts. The contract must be reasonable and often, a California employer cannot stop you from applying with competitors or trying to start a new business.
  • Non-solicitation clauses. Like non-compete clauses, these clauses are often unenforceable in California.
  • Union activity. Employers cannot ban union activity in an employment contract. All California workers have the right to discuss pay with coworkers, unionize, or take other forms of collective action.

Types of California Employment Contracts

Employment contracts come in many forms based on the type of work the company does or the type of employee being hired to complete the job. The three most common types of employment contracts are permanent, fixed term, and consultant agreements.

  • Permanent. This contract is used by a company to hire a permanent employee with regular hours and an hourly wage or salary.
  • Fixed term. Used when hiring employees who will only work for a specific period of time or to complete a specific job.
  • Consultant agreement. When a company hires a contractor or a freelance worker, a consultant agreement lays out the terms and conditions for independent workers who are not employees of the company.

Frequently Asked Questions

How do I hire a lawyer to draft an employment contract in California?
How much does it cost to hire a lawyer to draft an employment contract in California?
How much does it cost to hire a lawyer to review an employment contract in California?

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North Carolina Employment Contract Review Review
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Michigan Employment Contract from Michigan Review
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California Employment Contract Review Review
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Maryland Existing Employee asked to sign NDA, IP assignment and non-disparagement agreement Review
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Texas Employment Contract Review Review
  • Texas
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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


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Asked on Oct 4, 2022

Are employment contracts confidential?

I'm considering taking a second job but would not want my first employer to know. Is there any way for them to find out? I am not sure what all of the language in the contract says and may need to get it reviewed, but I wanted to see if these contracts are kept confidential so that my employer never finds out.

Donya G.

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Typically, yes. There s generally a confidential section in your employment agreement. Is there something specific you are worried about? You can have an attorney give a consultation, review the agreement and advise you. I can do that for you. You can connect with me through the website. Thanks Donya Gordon

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A termination notice is a provision in an employment contract that specifies the amount of notice an employer must give an employee if they wish to terminate the contract, or vice versa if the employee wishes to leave. This is an important clause, as it offers some level of job security for the employee and some level of predictability for the employer. In most states, including North Carolina, employment is considered "at-will" unless there is a contract in place that states otherwise. This means that either the employer or the employee may terminate the employment relationship at any time, for any reason, or for no reason at all, as long as the reason isn't illegal (like discrimination). If your contract includes a termination notice clause, this "at-will" status is likely modified to some extent. The specific details would depend on the exact wording in your contract. It could require either party to provide a notice (often 2 weeks, 1 month, or sometimes longer) before terminating the contract. That notice period is intended to give the other party time to adjust plans accordingly. For the employee, it might mean finding a new job; for the employer, it might mean finding a replacement.

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Position hierarchy may vary, as it is typically based on such factors as industry standards, company size, and internal policies. Before accepting an employment offer, a prospective employee should have a clear understanding of where the proposed position stands in the prospective employer's position hierarchy, as well as how the hierarchy affects the duties and responsibilities for that position. If the position hierarchy in a proposed employment contract or an employment offer letter is confusing, the prospective employee should seek clarification from the proposed employer.

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I'm sorry to hear about this proposed change. Whether or not your employer can make such changes unilaterally depends almost entirely on how your contract is written. For example, if your contract clearly states that you are an "at will" employee, your employer can not only make whatever changes it wants, but can also discipline you or terminate you with no reason at all and only a one second advance notice. If it's not an "at will" contract, there may be a paragraph or two that addresses amendments to the agreement - eg, some such contracts may say that an employer can make changes with two weeks advance written notice; another may say that changes will be negotiated in advance between employer and employee. You may want to have an employment attorney, such as myself, review your contract as well as any recent correspondence you may have received from your employer. You may also want to try to very quietly try to find out whether or not other employees are possibly in the same boat as you - it's possible that the employer is cutting back on some benefits to save money, rather than laying off or terminating some or all of their employees. Good luck to you - and if you'd like to reach out to me, you can find me through ContractsCounsel.com or on WSBA.org Please be aware that the above information is provided for educational purposes only, and no attorney/client relationship has been formed Merry A. Kogut WSBA #16153

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