This is a cautionary tale for business owners using, or considering using, AI tools to draft employment contracts.
We recently advised a client who had done just that. Using AI, they drafted and executed new contracts for their employees. Overall, AI had done a fairly decent job. But there were problems.
Multiple clauses addressed termination. Unfortunately, they did not align. That created ambiguity.
And here is the thing with employment contracts: one problematic clause can invalidate critical parts of the entire agreement.
In this case, the ambiguity rendered the termination provisions unenforceable. The result? A significantly more costly severance obligation.
Having these contracts reviewed by an employment lawyer at SVR before implementation could have saved the client a substantial payout. As the saying goes, an ounce of prevention is worth a pound of cure.
AI can be a useful tool. But when it comes to employment contracts, “mostly right” is not always good enough.
If your company’s employment contracts are outdated, cobbled together from templates, or being prepared by an algorithm, reach out to us for a thorough review. If a termination or other employment dispute arises, you will be very glad you did.
To learn more on this topic, check out ‘Termination Clauses: Four Things Every Business Owner Needs to Know’.
