Starting a new job is an exciting time, especially once you find a position that you want to make into a career. Some positions will require you to sign an employment contract before you start, however. And, in some cases you will want to insist on an employment contract to make the agreed-upon terms of your employment enforceable. Don’t let your excitement about starting a new job push you into signing any contract before you carefully review the language.
Many people think of employment contracts as standard agreements. They are not. Employment contracts written in a fair manner to codify the understanding of both parties can be a “win-win” to assure clarity of the employment terms and duties. However, when they are unilaterally written with “standard” terms, you may want an attorney to assist you in the negotiations of the agreement.
Renewal dates
Contracts have a start and end date, so you should expect to find this in any employment contract. You need to review the terms explaining how the contract can be renewed. In some cases, this will occur automatically at the end of every contract term. Pay close attention to the renewal date because any changes you need to negotiate prior to the contract’s renewal must be handled well in advance of that date.
Restrictive covenants
Often an employer’s primary motivation for an employment contract is to bind you to restrictive covenants, including confidentiality and non-compete agreements. Since such clauses can seriously and adversely affect your career future, they should be professionally reviewed.
Payment terms
The terms of your compensation should be clearly stated in the contract. This can include:
- Your base pay
- What can alter your base pay
- Commission payments
- Deferred compensation
- Stock options, restricted stock, phantom stock
- What qualifies you for bonuses
- Any sign-on bonus information, including any repayment agreement
- Payment dates or terms for each type of payment
- Benefits
This is one area of the contract that can be particularly complex, so a thorough review is a critical part of protecting your financial future. Particularly crucial is clarity and transparency, for example, the right to review financial and/or sales documents that form the basis of your bonus calculations.
Other critical information
In addition to post-employment non-compete agreements, there’s also a chance that there will be terminology that could prevent you from taking side gigs that are related to your employment, or any “moonlighting” at all. The contract may also discuss what happens if the company is sold to a new owner. If that point isn’t included and you think it’s possible that the company will change hands, find out if this can be included.
Your attorney can review the employment contract for you and, as necessary, work to negotiate fair revisions to start your career with the new company. This can help you ensure that your interests are protected if the terms of the contract ever need to be enforced in a dispute and to protect you from post-employment litigation against you.