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What should be in an employment contract?

by | Nov 15, 2018 | employment contracts, Firm News |

Getting a coveted job offer does not end negotiations or consideration of the job. The terms of employment contracts can have long-term consequences on one’s career and finances.

Job security is an essential component. Applicants should review whether there is protection from involuntary termination by determining whether they are a fixed-term employee or whether they can be terminated at will.

Even though contracts may have a fixed beginning and end date, at-will employees may be terminated at any time with little notice. Employees, accordingly, should seek just-cause termination where the employer must have a reason for firing the employee and limits the employer’s unfettered discretion. An agreement should also address whether the sale of the employer impacts employment or ends the contract.

A description of job duties over the term of the contract is also important. Titles and roles should be specifically set forth. Also, the agreement should address whether an employee can moonlight and whether there are any restrictions governing outside employment.

While a salary offer may be attractive, a potential employee should review and discuss the fine print. The contract should clearly set forth the base pay and provide a detailed explanation of benefits and whether these are guaranteed. Terms concerning bonuses should identify whether bonuses are guaranteed or discretionary. If bonuses are performance-based, eligibility should be objective and clear.

Non-compete clauses are being used more in all fields. These generally restrict an employee from working for a competitor for a time after termination or quitting. Other provisions ban soliciting the employer’s clients and customers.

Generally, non-compete clauses must be reasonable in length and geographic area or they may be ruled invalid by a court. Potential employees should carefully negotiate these terms, which could seriously limit their chances for reemployment and even their financial security.

Employment contract terms may be negotiated or revised. An attorney can help potential employees review offers and negotiate a fair agreement.