Stay-In Contract Drawing up employment contracts can help retain key employees and protect your trade secrets-but beware of the drawbacks.

Should you enter into employment contracts with your employees?Not if you don't want to alter the "at will"relationship assumed in most states, under which you can terminatean employee at any time for any reason or no reason. Still, thereare circumstances when employment contracts make sense.

First, the advantages. An employment contract can help youattract and retain key employees. While you can't forceemployees to stay, a contract can ensure that they'll providereasonable notice prior to departure-typically 60 to 90 days.

Especially in high-tech companies, employment contracts helpprotect critical trade secrets. "Suppose you have people doingresearch and development, and you're worried about an employeeleaving and disclosing what you're working on to thecompetition," says Pat Lowry, an employment attorney with lawfirm Steel Hector & Davis in West Palm Beach, Florida. Anemployment contract can prohibit employees from revealing companysecrets, working for the competition or soliciting customers.