5 Things to Include in Your Restaurant's Employment Agreements
By: Andrew Fine
Apr 23, 2018
As a restaurant owner, one of the smartest business decisions you can make is to create clearly documented policies, procedures, and job descriptions for your key employees.
In order to protect the interests of your restaurant, it’s a good idea to have your more senior level employees— such as your general manager, bar manager, and executive chef — sign an employment agreement. An employment agreement is an official legal document that outlines the rights, responsibilities, compensation, and restrictions of an employee.
It is highly recommended that you create an employment agreement between your company and your executive chef. Here are five things to include in that document.
Why Should I Have My Chef Sign An Employment Agreement?
Undoubtedly, one of your most important hires is your executive chef. Unfortunately, the average tenure of a restaurant chef is three months and one day, according to 7shifts. This means you'll always need to consider the steps a chef should take when they ultimately depart from your restaurant.
Your restaurant’s executive chef is master and commander of your kitchen; they provide the creative genius to power your brand, delighting your guests night after night with dishes that are as appetizing to the stomach as they are to the eyes. After all, 58% of diners cite the quality of food as the most important aspect of choosing where to eat.
It’s very common in the restaurant industry to see executive chefs pursue opportunities outside their current role to hone their craft, grow their personal brand, and expand into new profitable business ventures. Emeril Lagasse and Barbara Lynch are just a few of the renowned chefs who found delicious success by pairing their success in the kitchen with a dash of ambition.
Even Chef Chris Hill made the journey from humble cook to famed chef, and he explains his rise to success in an interview on The Garnish.
Employees want to work for businesses that promote professional growth and career advancement. Stifling your executive chef’s entrepreneurial spirit is a sure fire way to lose them and affect your restaurant’s guest experience. The United States is also in the midst of a nation-wide chef shortage, so you’d likely have some difficulty replacing them.
Having your chef sign an employment agreement is a solid way to look out of the health and well-being of your business, while also respecting your executive chef’s rights as an employee.
What to Include In a Executive Chef Employment Agreement
Typically, an employment agreement includes provisions about the role and responsibilities the employee will be taking on, including how they are expected to conduct themselves inside and outside your business.
1. Job Description
The role of executive chef is a managerial one – the word chef is actually derived from the french term, chef de cuisine, which literally means “the director or head of a kitchen.” Therefore, the employment agreement between your restaurant and chef should outline the specific managerial responsibilities of your chef and the scope of your chef’s authority.
From restaurant to restaurant, the job description of an executive chef can vary widely, but common responsibilities for executive chefs include:
Ensuring the quality of the food and beverage service offered by the restaurant is of the highest standard.
Selecting, hiring, training, managing, and disciplining a full kitchen staff.
Overseeing food orders, food inventory, and relationships with vendors.
By having a clear job description, there will be little room for ambiguity or confusion with respect to the expectations of your chef; this in turn makes it easier to hold your executive chef accountable.
To the extent that any decision (e.g., the hiring or firing of personnel, or spending over a certain amount of money) requires prior approval from the employer, the employment agreement should also make those conditions clear.
It is also helpful to establish budgets before hiring an executive chef and to include those budgets in the chef’s employment agreement. For example, if an executive chef is responsible for ordering food, the executive chef should do so within a pre-established budget. If an executive chef is unable to perform within the pre-established budget for any reason, the employment agreement should require the executive chef to immediately notify the employer.
2. Ownership of Recipes
In most— if not all— restaurants, the executive chef has a strong influence on the culinary direction of the menu.
Your employment agreement can dictate whether the chef retains ownership of his or her recipes, or of any other types of intellectual property developed by the chef over the course of their employment at your restaurant.
While employers generally own (by default) all rights to works (including recipes) created and developed by their employees, it is best practice to make clear in employment agreements that protectable works, such as unique recipes, will belong to the employer if:
They are developed for the employer
Are developed on the employer’s time
Use the employer’s resources.
Without these clear stipulations, a chef might argue that a particular recipe belongs to him or her, rather than to the restaurant.
In the majority of states, employees are considered “at-will”, meaning that they can be fired at any time and for any reason (with a few exceptions, including terminations based on race, age, or gender). Key employees, such as executive chefs, will sometimes negotiate employment agreements so that they may only be fired for “cause” (i.e., for good reason).
Depending on the leverage or influence of the employee, employers sometimes concede to this arrangement. If you choose to structure your chef’s employment so that he or she is only terminable for “cause”, you should carefully define what constitutes “cause” in the chef’s employment agreement to avoid future confusion or dispute.
Common “for cause” grounds include:
The commission of a crime
Disparagement of the employer
Misuse of confidential information
The repeated and continued failure to adequately perform job responsibilities after being notified of the failure in question.
4. Consent and Release For Use of Name and Likeness
The rising popularity of ‘celebrity chefs’ has opened new doors for many executive chefs around the country with entrepreneurial ambitions. It has also become a consideration for diners: When deciding where to eat, guests are not only interested in the menu, but who’s behind the menu.
The success of your restaurant may shine a spotlight on your executive chef or, alternatively, the existing popularity of a chef might propel your restaurant into the spotlight.
Since established chefs have the ability to draw crowds, it is recommended that you include language in your employment agreement that allows your company to use the name and image of your chef in company advertising and promotions, so long as the chef remains with your company.
5. Non-compete and Non-solicitations
The restaurant industry has a very high annual employee turnover rate; in 2016 it was 73%.
If your restaurant loses its executive chef to a competitor around the corner, the result could be devastating to your business. To prevent this outcome, employment agreements should include non-compete clauses, which restrict the ability of your executive chef to work for or assist restaurants that compete with yours, or for businesses that represent a conflict of interest.
It is important to note that these non-compete clauses cannot be too broad or restrictive, since courts may refuse to enforce such a restriction for public policy reasons. Therefore, be sure to include a reasonable time limit on the restriction (typically, 1-2 years following the termination of employment) and a reasonable geographic range for the restriction.
Limiting the restricted restaurant category by cuisine also helps to strengthen the restriction by narrowing its scope. For example, if you are operating a sushi restaurant, the non-compete should be limited to sushi restaurants, or Japanese restaurants.
Non-solicitation clauses may also be added to an employment agreement. These clauses restrict an employee’s ability to poach an employer’s personnel for a certain period of time following the employee’s termination (typically 1-2 years). This is an important protection, as it would prevent your executive chef from quitting and then taking the entire kitchen staff with him or her.
Employment Agreements Will Protect Your Business
A carefully drafted employment agreement between your restaurant and your executive chef will help to remove any doubt surrounding your chef’s rights, responsibilities and duties.
By removing this doubt, you resolve problems before they arise, and help pave the path towards a productive and durable employment relationship.
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