EMPLOYMENT AGREEMENT (AT-WILL)
(California – Comprehensive Template)
[// GUIDANCE: This template is drafted to meet current California employment-law requirements, including at-will statutory provisions, recognized exceptions, mandatory notices, and the State’s strict prohibition on most post-employment restraints. Bracketed text (“[ ]”) indicates fields or clauses for attorney customization. Optional language appears in italics with surrounding brackets. Remove all guidance comments before final execution.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
EMPLOYMENT AGREEMENT (AT-WILL)
This Employment Agreement (the “Agreement”) is entered into as of [Effective Date] (the “Effective Date”) by and between [Employer Legal Name], a [California corporation / LLC / other] with its principal place of business at [Address] (“Employer”), and [Employee Name], an individual residing at [Address] (“Employee,” and together with Employer, the “Parties,” and each, a “Party”).
Recitals
A. Employer desires to employ Employee in an at-will capacity under the terms set forth herein.
B. Employee wishes to accept such employment, subject to the terms and conditions of this Agreement.
C. The Parties intend this Agreement to comply with California Labor Code § 2922 (at-will employment) and all other applicable federal, state, and local laws.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, capitalized terms shall have the meanings set forth below. Terms defined in the singular include the plural and vice-versa.
“Base Salary” means Employee’s gross annual salary as set forth in Section 3.1(a), exclusive of bonuses and Benefits.
“Benefits” means the fringe benefits described in Section 3.1(b).
“Cause” has the meaning assigned in Section 6.1(a).
“Confidential Information” means all non-public information, whether oral, written, electronic, or other form, relating to Employer’s business, customers, or suppliers, excluding information that (i) is or becomes public through no fault of Employee, (ii) is received from a third party without breach of any obligation of confidentiality, or (iii) was already lawfully known to Employee prior to disclosure.
“Disability” means a physical or mental impairment that renders Employee unable to perform the essential functions of Employee’s position, with or without reasonable accommodation, for a period of [120] consecutive days or [180] aggregate days within any twelve-month period.
“Effective Date” has the meaning given in the Document Header.
“Good Reason” has the meaning assigned in Section 6.1(b).
“Intellectual Property” or “IP” means all inventions, developments, works of authorship, trade secrets, trademarks, and other proprietary rights created or conceived by Employee in the course of employment with Employer.
“Work Product” means all tangible and intangible results of Employee’s services under this Agreement, including but not limited to IP.
3. OPERATIVE PROVISIONS
3.1 Position; Compensation
(a) Position and Duties. Employer hereby employs Employee as [Title]. Employee shall devote [full-time] efforts to Employer’s business and shall comply with all lawful directions of Employer’s [Board/CEO/Manager].
(b) Base Salary. Employer shall pay Employee a Base Salary of $[Amount] per year, payable in accordance with Employer’s standard payroll practices and subject to lawful deductions and withholdings.
(c) Benefits. Employee shall be eligible to participate in Employer’s employee benefit plans as in effect from time to time, subject to plan terms.
(d) Bonus. [Optional] Employer [may / shall] pay Employee an annual discretionary bonus with a target of [Percentage] of Base Salary, subject to Employer’s bonus policy.
3.2 At-Will Employment; Term
Employment under this Agreement is at-will within the meaning of California Labor Code § 2922. Either Party may terminate employment at any time, with or without Cause, Good Reason, notice, or advance warning, subject to the obligations in Section 6.
[// GUIDANCE: Although notice is not legally required for at-will termination under CA law, many employers provide short notice periods for business continuity. Modify Section 6.2 accordingly.]
3.3 Duties of Loyalty and Compliance
Employee shall (i) comply with all Employer policies (including but not limited to anti-harassment, code of conduct, and information-security policies); (ii) comply with all applicable laws and regulations; and (iii) not engage in any activity that creates an actual or potential conflict of interest without Employer’s prior written consent.
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Representations. Each Party represents and warrants that:
(a) it has full power and authority to enter into and perform this Agreement; and
(b) the execution and performance of this Agreement do not violate any other agreement to which such Party is bound.
4.2 Employee Representations. Employee further represents and warrants that:
(a) Employee is not party to any non-competition, confidentiality, or other agreement that would restrict Employee’s ability to perform the duties hereunder in California;
(b) Employee will not use or disclose any confidential information belonging to a prior employer or other third party; and
(c) Employee is legally authorized to work in the United States and shall maintain such authorization throughout employment.
Survival. The representations and warranties in this Article 4 shall survive termination of this Agreement for a period of [24] months.
5. COVENANTS & RESTRICTIONS
5.1 Confidentiality. Employee shall hold all Confidential Information in strict confidence and shall not, during or after employment, use or disclose Confidential Information except as necessary to perform duties for Employer, or as otherwise permitted by law (e.g., under the Defend Trade Secrets Act, 18 U.S.C. § 1833(b), and California Labor Code § 1102.5).
5.2 Intellectual Property Assignment. Employee hereby irrevocably assigns to Employer all right, title, and interest in any IP created, conceived, or reduced to practice by Employee, either alone or with others, during the term of employment that (i) relates to Employer’s business or actual or demonstrably anticipated research, or (ii) results from any work performed by Employee for Employer. [CA Labor Code §§ 2870-2872 carve-outs apply; include statutory notice to Employee at the end of this Agreement.]
5.3 Non-Solicitation of Employees. [Optional—Enforceability in CA uncertain; consider limiting to “no hire” and to 12 months post-employment.]
5.4 Non-Competition. No post-employment non-competition covenant is imposed. The Parties acknowledge that, under California Business & Professions Code § 16600, any agreement restraining lawful professional engagement or business is void, except as expressly permitted therein (e.g., sale of business).
5.5 Return of Property. Upon termination, Employee shall promptly return all Employer property, documents, and electronically stored information in Employee’s possession or control.
6. DEFAULT & REMEDIES
6.1 Events of Termination
(a) Termination for Cause. Employer may terminate employment immediately upon written notice for: (i) material breach of this Agreement; (ii) gross misconduct; (iii) conviction or plea of nolo contendere to any felony; (iv) fraud or dishonesty; or (v) willful failure to perform duties after written demand.
(b) Termination for Good Reason. Employee may resign with Good Reason by providing written notice within [30] days after the occurrence and allowing a [15-30] day cure period. “Good Reason” means: (i) material reduction in Base Salary; (ii) material diminution of duties; or (iii) relocation of worksite by more than [50] miles.
(c) Termination Without Cause / Voluntary Resignation. Either Party may terminate employment at any time for any or no reason.
6.2 Notice and Final Pay
Employer shall comply with all final pay requirements under California Labor Code §§ 201-203, including payment of all earned wages, accrued but unused vacation, and reimbursable business expenses.
6.3 Severance [Optional]
[Insert severance terms, if any, subject to ERISA and CA wage-claim considerations.]
6.4 Remedies
(a) Specific Performance/Injunctive Relief. The Parties agree that breach of Section 5 may cause irreparable harm; therefore, Employer may seek temporary or permanent injunctive relief, limited to the extent permissible under California law, in addition to any other remedies.
(b) Attorneys’ Fees. In any action arising out of this Agreement, the prevailing Party shall be entitled to reasonable attorneys’ fees and costs.
(c) Limitation on Damages. Except for (i) wage-and-hour liabilities that may not be contractually waived, (ii) indemnification under Section 7.1, and (iii) intentional misconduct, each Party’s monetary liability shall not exceed the aggregate Base Salary and Benefits paid or payable during the 12-month period preceding the act giving rise to the claim.
7. RISK ALLOCATION
7.1 Indemnification by Employee
Employee shall indemnify, defend, and hold harmless Employer, its affiliates, and their respective officers, directors, employees, and agents, from and against any and all losses, liabilities, damages, and expenses (including reasonable attorneys’ fees) arising out of or in connection with (i) Employee’s willful misconduct, gross negligence, or violation of law, or (ii) Employee’s breach of this Agreement.
7.2 Limitation of Liability
See Section 6.4(c) (Liability Cap). The Parties acknowledge that California Labor Code §§ 2802, 2865 impose certain non-waivable indemnification obligations on employers; nothing herein shall be construed to diminish such statutory protections.
7.3 Insurance
Employer shall maintain workers’ compensation insurance as required by law. Employee may, in Employer’s discretion, be covered under Employer’s directors’ and officers’ liability insurance for acts within the scope of employment.
7.4 Force Majeure
Neither Party shall be liable for failure to perform if such failure results from causes beyond its reasonable control (including national emergencies, natural disasters, pandemics, or governmental orders) provided that the affected Party gives prompt notice of the force majeure event and resumes performance as soon as practicable.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement and any dispute or claim arising hereunder shall be governed by and construed in accordance with the laws of the State of California, without regard to conflict-of-laws principles.
8.2 Forum Selection. Subject to Section 8.3, the state courts of [County, California] shall have exclusive jurisdiction over any action arising under this Agreement.
8.3 Arbitration [Optional]
[If selected, insert a comprehensive, stand-alone arbitration clause compliant with the Federal Arbitration Act and California Arbitration Act, ensuring carve-outs for PAGA claims, injunctive relief, and statutory rights that cannot be compelled to arbitration.]
8.4 Jury Trial Waiver [Optional—Note CA constitutional limitations]
[Insert language acknowledging that contractual pre-dispute jury waivers are unenforceable in California (Grafton Partners v. Superior Court).]
8.5 Provisional Relief. Notwithstanding Sections 8.2–8.3, either Party may seek provisional injunctive relief in any court of competent jurisdiction as necessary to protect its rights pending final resolution, consistent with Section 6.4(a).
9. GENERAL PROVISIONS
9.1 Amendment; Waiver. No amendment or modification of this Agreement shall be effective unless in a writing signed by both Parties. Waiver of any term shall not constitute waiver of any other term.
9.2 Assignment. Employee may not assign, delegate, or subcontract any rights or obligations hereunder without Employer’s prior written consent. Employer may assign this Agreement to a successor in interest upon notice to Employee.
9.3 Successors & Assigns. This Agreement shall inure to the benefit of and be binding upon each Party’s permitted successors and assigns.
9.4 Severability. If any provision is held illegal or unenforceable, it shall be limited or reformed to the minimum extent necessary to render it valid, and the remainder of the Agreement shall remain in full force and effect.
9.5 Entire Agreement. This Agreement, together with any attached exhibits and schedules, constitutes the entire agreement between the Parties and supersedes all prior agreements or understandings, whether oral or written, relating to the subject matter herein.
9.6 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together constitute one instrument. Signatures transmitted electronically (e.g., via DocuSign or PDF) shall be deemed originals.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Employment Agreement as of the Effective Date.
EMPLOYER
[Employer Legal Name]
By: ____
Name: ____
Title: _____
Date: _________
EMPLOYEE
Signature: ____
Name: ____
Date: _________
STATUTORY NOTICE REGARDING INVENTIONS (CALIFORNIA LABOR CODE §§ 2870-2872)
The following notice is required under California law and shall be deemed incorporated into this Agreement.
Employee is hereby notified that this Agreement does not require assignment of any invention that Employee developed entirely on Employee’s own time without using Employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either (a) relate at the time of conception or reduction to practice to Employer’s business or actual or demonstrably anticipated research or development, or (b) result from any work performed by Employee for Employer.
Employee acknowledges receipt of this notice by initialing here: ___
[// GUIDANCE: Attach Exhibit A—“Excluded Inventions” listing any pre-existing inventions that Employee wishes to exclude from assignment (if applicable).]
[END OF DOCUMENT]