JOURNAL OF THE SOCIETY OF COSMETIC CHEMISTS The first question to be considered in any general analysis of employ- ment contracts is: What constitutes an employment contract? Gen- erally, it is well known that any agreement between at least two parties, upon sufficient consideration in which the minds of the parties meet and concur, establishes a contract. When the agreement prescribes an employer-employee relationship, an employment contract is established. Employment contracts require no particular form and, surprising to many individuals, the related legal obligations may take effect even in the absence of a formal contract or other written expression of con- fidence (3). If legal obligations may take effect in the absence of any formal contract, why do we have employment contracts, and are they necessary? Every employee, unless exempted by his employer, has a definite legal and certainly a moral obligation to preserve and protect all information concerning the business affairs or technical disclosures of the employer. Since it is recognized that no formal expression is neces- sary to establish an employment contract, we may next consider what purpose is to be derived from the use of formal contracts. First of all, it may be recognized that formal employment contracts are used primarily to enlarge the legal obligations of the employee to the employer. The employer further benefits by issuance of an actual notice in writing of the obligations to be expected of the employee. With the increasing mobility of personnel into and out of competing organizations and of the movement of employees specializing in highly limited and extremely sensitive areas, it is necessary for a business organization to safeguard itself against loss of confidential information and to avoid also creating an embarrassing situation relative to com- petitive organizations. The precipitated effect of a disclosure of confidential information to a competitor upon the image of an adverse employee may be readily ap- preciated. Seldom, however, is it appreciated until after the fall that even the image of the employer may be damaged in a sincere attempt to prevent dissemination of confidential information by legal recourse against an adverse employee. Should the employer receive sufficient publicity for his efforts, it is likely that even the recruiting of new em- ployees may become more difficult. After all, what employee wants to be "married to the company" after reading a press report that a "multi- million dollar corporation filed suit against a former employee ?" Cer- tainly, the damage of adverse publicity is an important factor which must be considered by both the employee and by the employer before transgressing the involved rights and duties of employment contracts,

EMPLOYMENT CONTRACTS The employee may also derive benefits from employment contracts. By knowing the boundaries of the incurred obligations to his employer, the employee may then recognize the area in which he may operate with- out conflict. The gray area between these two extreme boundaries of recognition and obligation, however, presents the difficult area where in- dividual judgment becomes involved in resolving potential conflict of interest problems. It is not difficult to understand the reason for using formal employ- ment contracts, especially since people entrusted with confidential in- formation may be found to be vulnerable. There is nothing special in the makeup of an individual that should cause him to make off with in- formation committed to his management, nor is there anything special in the constitution of an individual that causes him to act such that he yields under the pressure of temptation. Individuals who are not in- fluenced by monetary pressure may be influenced by flattery. Those impervious to flattery may be warped and biased by social inclinations. One way or another, every individual may become vulnerable. Re- sultantly, employment contracts are used to establish, at the outset, the rights and duties of an employee as well as those of the employer. There has been renewed interest on the part of many companies with regard to the particular form of employment contract which is used. The reason for this renewed interest in employment contracts is prob- ably due to the great competition which now exists between companies for skilled personnel. The more advanced corporations have now shortened their employment contracts by use of simple language in place of legalistic "whereas" clauses. The total effect of the change in form of the agreement has been from something that looks like a complex legal document to a clear, simple, and friendly letter which is executed in duplicate. Almost every individual, at one time or another, has been asked to sign an employment contract. Few individuals, however, actually read these contracts, and even fewer individuals actually understand their content. The difficulty with this state of affairs probably resides within the corporate personnel department, where the new employee is often merely asked to sign a series of papers without any great explanation as to what the papers involve. The real surprise and understanding of em- ployment contracts positively arises when the sensitively placed em- ployee decides to terminate his employment with one employer and thereupon advises the employer of his intention to work for a competitor