Ties That Bind
Employment contracts could save your business...and your relationships.
Suggest to the senior generation of a family business that giving employment contracts to family members might be a wise idea, and you'll run into a minefield of resistance. "They're not necessary--we love and respect each other" or "It would run counter to our business's culture" are typical responses.
It's only after a problem flares up that some families realize employment contracts would be helpful. "Family businesses can never have too much communication," says Jeffrey Wolfson, partner in the Boston law firm Goulston & Storrs and chair of Northeastern University's Center for Family Business in Boston. "A document that provides important information--job and role definition for the family member and defined expectations and security for the company--can do nothing but improve communication."
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