Understanding Employment Contracts: Key Clauses Employers in Montana Should Know
As a Montana employer, having a well-drafted employment contract is one of the most important steps you can take to protect your business and establish clear expectations with your employees. A properly structured contract not only outlines roles and responsibilities, it also safeguards against misunderstandings, potential legal disputes, and compliance issues under Montana law.
Because Montana is unique among states in recognizing certain employee protections—since Montana is not an at-will employment state—it’s essential that your contracts are crafted with an understanding of local employment laws. At KLH Advisors, we specialize in Montana employment law and help employers navigate these complexities with confidence and clarity.
What is an Employment Contract?
An employment contract is a written or verbal agreement between an employer and an employee that defines the terms of employment. It lays out the framework for the working relationship, including job duties, compensation, termination, and how disputes will be handled.
In Montana, employment agreements can take several forms:
Written Contracts: These are formal documents detailing the terms of employment and are typically the most enforceable.
Implied Contracts: Even without a written agreement, Montana courts may find that an employment relationship is governed by implied promises based on company policies or past practices.
At-Will Employment: Montana does NOT follow the at-will model, and is the only state that limits an employer's ability to terminate an employee after a probationary period, under the Wrongful Discharge from Employment Act (WDEA).
Understanding these distinctions is critical when drafting a contract that will hold up under scrutiny.
Key Clauses Montana Employers Should Know
Including the right clauses in your employment contracts can help prevent costly disputes and ensure compliance with Montana’s employment laws. Here are the most important sections to consider:
Job Title and Duties
Clearly define the employee’s position and responsibilities. Ambiguity here can lead to disagreements over performance or role expectations.
Compensation and Benefits
Outline salary, hourly wages, bonuses, commission structures, and benefits. Be specific—vague compensation language is a common source of conflict.
Working Hours and Location
Clarify expectations for work hours, schedules, remote work options, and travel requirements. In Montana’s increasingly flexible work environment, setting these terms upfront helps avoid confusion.
Confidentiality and Non-Disclosure
Protect your company’s proprietary information with a solid confidentiality clause. This is especially important in professional services, tech, and other industries where sensitive information is exchanged.
Non-Compete and Non-Solicitation
Montana courts generally disfavor non-compete clauses unless they are narrowly tailored. A more enforceable approach is to include non-solicitation clauses that prevent former employees from poaching clients or staff after leaving your company.
Termination Clauses
Given Montana’s WDEA, employers must outline what constitutes cause for termination after an employee passes the probationary period. A termination clause should also detail severance, notice periods, and return of company property.
Dispute Resolution
Specify how conflicts will be resolved—whether through arbitration, mediation, or litigation. A clear dispute resolution clause can help you avoid lengthy and expensive legal battles.
Common Employment Contract Mistakes to Avoid
Even well-meaning employers can make critical errors when drafting employment contracts. Here are a few common pitfalls to watch out for:
Using generic templates: Employment laws vary from state to state. A one-size-fits-all contract may not comply with Montana law or reflect your business's needs.
Omitting required disclosures: State laws may mandate specific notices, such as wage deductions or equal opportunity statements.
Treating an employee as at-will: Without understanding how Montana’s WDEA affects employment, you may unintentionally expose yourself to wrongful termination claims.
When to Consult a Bozeman Employment Lawyer
Whether you’re hiring your first employee or managing a growing team, consulting a local employment attorney can save you time, money, and stress. Employment laws in Montana are nuanced, especially with the added layer of the Wrongful Discharge from Employment Act.
At KLH Advisors, we help Montana employers create customized employment contracts that are legally sound, practical, and aligned with your business goals. We understand the challenges you face and offer proactive legal solutions designed to protect your company long-term.
If you're ready to draft or revise your employment contracts, contact KLH Advisors today and work with a team that knows Montana employment law inside and out.
