Quick Facts — Employment Contract Lawyers (Texas)

What is a Texas Employment Contract?

A Texas employment contract is a legally binding agreement that is entered into by an employer and an employee. The parties will negotiate the terms of the contract like compensation and benefits and then create a document that will serve as the foundation for the business relationship.

Employers in Texas usually execute employment contracts when hiring high level permanent employees with unique skills, but these contracts can also be used when hiring temporary employees, contractors, and consultants.

Texas is an “at-will” employment state. This means that without a valid employment contract, an employer can fire an employee at any time without cause or reason. The only exception is that the termination cannot violate any laws like discrimination laws.

An employment contract is the only way to override the “at-will” employment law and protect an employee’s job.

Are Employment Contracts Enforceable in Texas?

Yes. Employment contracts are legally enforceable in Texas. Texas treats an employment contract like any other contract under the state contract laws. The agreement must be based on mutual consent, involve consideration, and cannot violate any laws or public policy.

Texas courts will not enforce a contract that is ruled to be unconscionable. For employment contracts, the following factors are considered when determining if a contract is unconscionable:

  1. Are any legal rights prohibited by the agreement?
  2. Is there a lack of mutuality?
  3. Is the contract unfairly one-sided?

Employers are usually in charge of drafting employment contracts so it is not uncommon to have a contract that heavily favors the employer over the employee. To ensure that the contract is legal in Texas, employers should have their employment contract drafted or reviewed by a contract lawyer.

What Are the Legal Requirements for Texas Employment Contracts?

Texas employment contracts must follow the legal requirements of Texas contract law and the Texas labor code. It is common for employment contracts to be in writing, but oral employment contracts with a duration of less than one year can also be enforced.

Many people think of an employment contract as an express written contract with specific terms and conditions. While this is one type of employment contract, other written documents can also create a legally binding contract.

Legally binding employment contracts can be created in the following ways:

  • Verbal agreements
  • Implied agreements based on conduct and representations
  • Offer letters
  • Employee handbooks
  • Company notice boards
  • Emails

Employers need to be aware that contracts can be created from a variety of communications and actions.

One essential element that must be included in an employment contract to make the contract legally binding is a definite term of employment or specific circumstances under which an employee can be fired. Without defining duration of employment or causes for termination, the terms of employment could be interpreted as “at will” and leave an employee vulnerable to termination for any reason.

Types of Texas 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. Restrictive agreements are often used to protect the employer’s business interests.

Some common types of Texas employment contracts include:

  • Permanent employment contract. Used by a company to hire a permanent employee with regular hours and an hourly wage or salary.
  • Contractor agreement. Used when a company hires a contractor or a freelance worker who is not an employee of the company but will be completing work for the company.
  • Non-disclosure agreement (NDA). A restrictive contract that prevents the employee from releasing valuable information about the business.
  • Non-compete agreement. Protects the employer by limiting the employee from working for competitors or creating a competing business.

Frequently Asked Questions

How do I hire a lawyer to draft an employment contract in Texas?
How much does it cost to hire a lawyer to draft an employment contract in Texas?
How much does it cost to hire a lawyer to review an employment contract in 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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Nancy S. on ContractsCounsel
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Experienced real estate, business, and tax practitioner, representing start up and established businesses with formation, contracts, and operational issues.

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Steven W. on ContractsCounsel
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Steven W.

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Attorney Steven Wax is ardent about helping his clients. Whether creating personalized estate plans, drafting and negotiating contracts or other legal matters. Steven’s goal is to assist and counsel his clients to protect them and their loved ones. Steven grew up on Long Island, New York. He attended the University of Massachusetts in Amherst earning a BS in Sport Management. He earned his paralegal certificate at Duke University and earned his Juris Doctorate from North Carolina Central University School of Law in Durham, NC. Steven has an extensive legal career in the life science sector, working for some of the world’s largest Contract Research Organizations since 2013. Steven has negotiated a broad range of contracts for both businesses and individuals. Steven participated in the NCCU Elder Law Project, where he prepared wills, durable powers of attorney, living wills, and health care powers of attorneys for low/fixed income clients in Durham and surrounding counties. Steven finds meaningful ways to share his skills and passion with his community. Steven volunteers his time to Wills for Heroes, which provides no-cost estate planning documents to first responders and their families, through the NC Bar Foundation.

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Scott M. on ContractsCounsel
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Scott M.

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Skilled/versatile attorney (and RE broker) with 10+ years' experience and diverse background in real estate, business law, injury litigation, estate planning. Select Experience: • Former General Counsel (and current Of Counsel) for a prominent real estate developer touching on all aspects of business in a hands-on and advisory role, including Lease and PSA contract negotiations; • Years of successful injury litigation practice as associate and solo (primarily plaintiff, some defense) with multiple six-figure settlements; • Years of expertise in business law for a variety of industries as well as estate planning for small to mid-size entities.

Matt T. on ContractsCounsel
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Matt is a licensed attorney based out of Dallas, Texas. Despite having recently graduated, Matt has been immersed in the world of Corporate law throughout law school and beyond. As a result, he has benefitted from the unique and advantageous position of experiencing and working on a wide array of matters, such as reviewing, drafting and negotiating contracts, overseeing regulatory compliance, business formation, risk management, and much more. Contact Matt today for a free consultation!

Penny R. on ContractsCounsel
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I have practiced law for more than 35 years in the State of Texas. I am proud of the relationships I have formed with my clients and the high level of legal advice I have provided over these many years. I am responsive and will promptly address your particular situation. For 35 years I have counseled individuals, partnerships and corporations with regard to business formation, real estate transactions and issues, employer/employee relationships, contracts, estate planning and asset protection. I am licensed to practice law in all state courts in Texas and all federal courts. I have represented plaintiffs and defendants throughout the state in cases ranging from contract disputes to injury claims. I have worked with every type of business you can imagine from individuals to "mom and pop" businesses and businesses with assets of more than $10,000,000. My clients' businesses range from large construction contractors, investment companies, oil and gas companies, and commercial landlords, to name a few.

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Asked on Apr 12, 2023

What's vacation time in an employment contract?

I recently accepted a new job and I was provided an employment contract to review. In the contract, there is a section about vacation time, but it is not very clear. I'm trying to understand what vacation time is included in the contract and what the expectations are for taking time off. I want to make sure I have a clear understanding of my rights and responsibilities regarding vacation time before I sign the contract.

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You can create your own will. However, having an attorney draft it for you will ensure that your wishes are carried out in all circumstances. Doing it yourself without having any experience may cause many problems after your demise.

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What should be included in my employment contract?

I am a small business owner looking to hire an employee for the first time. I have never written an employment contract before, so I am unsure of what should be included in the contract to ensure that it is legally binding and protects both the employee and me. I am looking for advice on what should be included in the contract to ensure that my interests and those of my employee are adequately protected.

Donya G.

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Hello, Congratulations on your business. Here are some things that need to be in the agreement - amount you will pay them, when you will pay, the term of the employment, confidentiality, non solicit. Since you have never done this before, I would like to suggest that you hire an attorney to get it done to ensure it is done correctly. I am a NY attorney with over 20 years of experience. I assist small businesses like yours with their employment, vendor, investment and all their contract needs. I would love to assist you. You can contact me on the Contracts Counsel website or on my personal page - Donya Gordon Looking forward to talking to and working with you Sincerely Donya Gordon

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Asked on Apr 12, 2025

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I recently resigned from my job, and in my employment contract, there was a provision for a performance bonus to be paid out at the end of the year. However, the payout date is a few months away, and I am concerned that the company may try to withhold the bonus since I am no longer employed with them. I want to know if they have the legal right to do so, or if I am still entitled to receive the bonus based on my performance during my time of employment.

Jerome L.

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This is a great—and very common—question. Whether the company can legally withhold your performance bonus after resignation depends heavily on how your employment agreement is written and how the bonus is classified. Key Factors to Consider: 1. Is the Bonus Discretionary or Earned? If your contract defines the bonus as discretionary, the employer generally has the right to decide whether to pay it and can condition it on continued employment. If the bonus is based on meeting specific performance goals or metrics, and those have been satisfied, it may be considered earned—even if the payment date is in the future. 2. Does the Contract Require You to Be Employed on the Payout Date? Many agreements include language stating the employee must be actively employed on the bonus payout date. If such a clause exists, the company may be within its rights to withhold the bonus, even if the performance was completed. 3. What Is the Bonus Period? If your bonus was based on a performance period that has already ended (such as a calendar or fiscal year), and you met your goals, you may have a stronger case for claiming the bonus as earned compensation. Georgia-Specific Note: In Georgia, employment is at-will, and courts generally uphold the terms of a written employment agreement. However, Georgia courts have also recognized that earned wages (which can include bonuses if not discretionary) must be paid. If the bonus is performance-based and the company has paid similar bonuses under the same conditions in the past, you may have grounds to assert that the payment is owed. What You Can Do: Review your employment agreement and any bonus policy documents closely. Look for phrases like “discretionary,” “earned,” and “must be employed on the payout date.” If the language is unclear, you may want to consult an attorney to evaluate whether the company is legally permitted to withhold the bonus—or if you may have a claim based on how the bonus was structured and earned. If you would like help reviewing your agreement, I’d be happy to assist.

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