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Retained Employees Agreement

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RETAINED EMPLOYEES AGREEMENT

THIS AGREEMENT is made and entered into as of the day of by and between , INCORPORATED, a corporation (" "), and INC., a corporation (" ").

In accordance with that certain agreement known as the Incorporated (the "Asset Purchase Agreement”) between the parties hereto and dated , has sold its furniture, equipment, inventory and supplies to effective as . Pursuant to the Asset Purchase Agreement, has identified to the names of the persons it intends to employ (the “Retained Employees”) who were formerly employed by . has furnished to a written list of the amounts of the Retained Employees accrued, but unpaid, vacation and sick pay. The list of the names of the Retained Employees and the amounts of their unpaid vacation and sick pay is attached hereto as Exhibit "A".

In consideration of the premises and the mutual promises herein made, the parties agree as follows:

1. Payment of Vacation and Sick Pay to . Concurrently with the execution of this Agreement, has paid to in cash an amount equal to the total amount of unpaid vacation and sick pay shown on Exhibit “A”.

2. Assumption of Liability. hereby assumes all responsibility for such unpaid vacation and sick pay and agrees to provide such vacation and sick pay benefits to the Retained Employees. agrees to indemnify and hold harmless with respect to the vacation and sick pay obligations of to the Retained Employees up to the amounts set forth on Exhibit "A".

IN WITNESS WHEREOF, Inc. and , Incorporated have caused this Agreement to be executed by their duly authorized officers, all as of the date first above written.

By:

[Corporate Seal]

By:

[Corporate Seal]

EXHIBIT "A"

Sick Pay

Hours Value

Vacation Pay

Hours Value

Respectfully submitted,

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What a Retained Employees Agreement Is and when it’s used

Retained Employees Agreement is a written contract used when an employer or engaging company retains one or more employees or contractors for a defined project, period, or set of services. It documents scope of work, compensation or retainer arrangements, confidentiality obligations, noncompete or nonsolicitation clauses if applicable, reporting and deliverable schedules, and termination and notice provisions. The agreement clarifies expectations, protects intellectual property and confidential information, and sets dispute resolution and governing-law terms. Use clear party identifiers and exact effective dates to reduce ambiguity.

Why a clear Retained Employees Agreement matters

Provides a clear legal record of retention terms, reduces misunderstandings about duties and pay, secures confidential and IP rights, and establishes termination and remedy mechanisms. Well-drafted retained employees agreements support compliance with employment law and make disputes easier to resolve.

Why a clear Retained Employees Agreement matters

Who typically prepares and signs these agreements

Employers, HR teams, legal counsel, and hiring managers use the Retained Employees Agreement to formalize project scopes, compensation, reporting, and confidentiality obligations.

  • Small and mid-size businesses retaining employees for short-term projects or ongoing retainers.
  • In-house legal departments using standard templates for consistent terms and risk management.
  • Freelancers or contractors placed on retainer where ongoing availability and exclusivity are negotiated.

Core clauses to include in every Retained Employees Agreement

Core clauses to include in a professional Retained Employees Agreement protect rights, set expectations, and reduce legal exposure across employment and contractor relationships.

Scope of Work

Define services, deliverables, milestones, performance standards, and reporting frequency. Clear scope limits disputes over unpaid or out-of-scope work.

Compensation

State retainer fee, base salary or hourly rates, payment timing, expense reimbursement, and any bonus conditions, including tax withholding responsibilities.

Confidentiality

Include non-disclosure obligations, permitted disclosures, duration, remedies for breach, and specific trade secret protections or handling procedures for sensitive data.

IP Assignment

Clarify ownership of inventions, work product, and copyrights; include assignment and moral rights waiver if required to ensure employer ownership.

Term & Termination

Specify agreement term, renewal mechanics, notice periods, cause and convenience termination rights, and post-termination obligations such as return of materials.

Governing Law

Designate governing state law and dispute process—mediation, arbitration, or courts—and specify venue to reduce jurisdictional uncertainty and litigation costs.

Step-by-step: complete and finalize the agreement

Follow this step-by-step sequence to complete and finalize a Retained Employees Agreement accurately in compliance with applicable law.

  • 01
    Prepare Draft: Assemble scope, deliverables, compensation, and confidentiality language for initial review.
  • 02
    Identify Parties: Use full legal names and entity types as shown on licenses or filings.
  • 03
    Set Terms: Specify effective date, term length, notice, termination, and renewal conditions.
  • 04
    Sign & Store: Obtain dated signatures from authorized signers and retain a copy securely.

How electronic execution typically proceeds

Electronic execution streamlines review, approval, signing, and storage while maintaining an auditable record of the Retained Employees Agreement process.

  • Upload Document: Start with a final draft in PDF or DOCX.
  • Prepare Fields: Add signature, initials, and date fields for each signer.
  • Authenticate Signer: Use email, SMS code, or stronger methods.
  • Complete Audit: Save certificate of completion with timestamps.

Suggested digital workflow settings for electronic execution

Configure a digital signing workflow suited to the Retained Employees Agreement, internal approvals, and retention settings.

Field Configuration
Signer Authentication Email, SMS code, KBA options.
Field Types Signature, initials, date, checkbox, text.
Routing Order Sequential or parallel signer routing.
Retention Settings Export PDF/A and store per policy.

Platform capabilities to check before sending for signature

Ensure platform supports secure e-signing, audit trails, and integrations required by your workflows and user provisioning.

  • File Formats: PDF, DOCX, and Excel supported.
  • Integrations: Salesforce, NetSuite, Google Workspace.
  • Authentication: Email, SMS, SSO, advanced options.

Key deadlines and timing to include in agreement drafting

Key deadlines and timeframes to track when preparing and executing a Retained Employees Agreement to ensure compliance.

Effective Date Entry:

Use MM/DD/YYYY. Determines when obligations start.

Notice Periods:

Specify days or months for termination and cure periods.

Payment Schedule:

List invoicing dates, net terms, and late fee triggers.

Performance Milestones:

Include deliverable dates and acceptance criteria.

Record Retention:

Retain executed agreements per retention guidance and applicable law.

eSignature pricing and feature snapshot for agreement workflows

Compare starting prices and key eSignature features across common vendors to inform platform selection for agreement execution.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Security and compliance controls to protect signed agreements

Data encryption: TLS 1.2/1.3, AES-256 at rest.
Certifications: SOC 2 Type II, ISO 27001, PCI DSS.
HIPAA (BAA): BAA required for protected health information.
ESIGN and UETA: Legal framework for electronic signatures.
Audit Trail: Timestamps, IP, and action history.
Access Controls: Role-based access and SSO options.

Common pitfalls to avoid when preparing agreements

  • Failing to specify whether the person is an employee or independent contractor can create tax liability, wage-and-hour exposure, and benefits disputes.
  • Using vague payment language, such as 'reasonable compensation,' leaves room for disagreement and delayed payments that may trigger claims.
  • Omitting explicit IP assignment allows contractors to claim ownership of work product, complicating product launches or licensing.
  • Not aligning governing law and venue provisions with business operations increases litigation costs and may require costly jurisdictional motions.

Key legal and financial risks associated with errors

Tax Penalties: Incorrect TIN triggers backup withholding.
Classification Risk: Misclassifying worker triggers fines.
IP Loss: Incomplete assignment risks ownership loss.
Confidentiality Breach: Improper protection leads to liability.
Contract Ambiguity: Vague terms invite disputes.
I-9 Violations: Incomplete forms may incur fines.

Frequently asked questions about Retained Employees Agreements

Common questions about completing, signing, and storing Retained Employees Agreements, with concise answers and practical next steps.


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