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Stay-In Contract

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

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This story appears in the August 2001 issue of Entrepreneur. Subscribe »

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 terminate an employee at any time for any reason or no reason. Still, there are circumstances when employment contracts make sense.

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

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