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6 Things to Know Before Signing Employment Documents

signing-contractSo you’ve just been offered the job of your dreams, and now all that’s left to do is simply dot a few ‘i’s and cross a few ‘t’s, right? Wrong. Before you even consider picking up a pen and signing employment documents, here’s what you should know:

1) At-will employment vs. fixed term

When agreeing to at-will employment, you are acknowledging the fact that you, as an employee, may quit at any time.  However, keep in mind that because you have the right to leave at any time, your employer also has the right to terminate you at any time, without cause.  This is particularly important if you are scheduled to receive a certain kind of compensation (stock, health benefits, etc) after a specified period of time.  Your employer can fire you the day before that compensation comes into existence, with no recourse for you.

Fixed term employment states the duration of employment, and a valid cause for termination is required. Don’t get too comfortable just yet…employers have the right to include an at-will clause in the agreement, which can inevitably trump any fixed term employment aforementioned in the contract.

2) Job Title & Responsibilities

This might seem like an obvious one, but can be so easily overlooked. What are your responsibilities for this particular position? What criteria will your employer be using to evaluate your performance on the job? Will your duties remain constant, or shift over time?

These are the types of questions you should be asking yourself when reviewing your employment documents to avoid any confusion down the road. Not only that, but especially if you are a fixed-term employee as discussed above, the evaluation procedures can be important if they want to terminate you ‘for cause.’

3) Compensation & Benefits 

While you may have already thoroughly discussed your compensation package with your employer, it is in your best interest to check for any nuances before signing anything.

A few things to keep in mind:

  • Base Salary
  • Annual bonus provisions
  • Health benefits
  • Vacation time & sick leave
  • Equity (stock ownership)
    • Note: If you are given equity by a company you should be aware how the shares of stock are granted.  Are they restricted stock? Stock options? Vesting schedule? Cliff?  Be aware of all the terms and research them thoroughly to know whether you have to actually purchase your shares or whether you have to be at the company for a certain amount of time before you get the stock.

4) Confidentiality

It is crucial to have a clear understanding of just what you are and aren’t at liberty to discuss. Failure to uphold the confidentiality required of you could result in serious repercussions, including a potential lawsuit if you disclose extremely sensitive information about a client which results in harm to them. If you are even slightly unsure of what is expected, you should consult with both a lawyer and your future employer.  In this instance, it is much better to ask permission than ask for forgiveness.

5) Non-compete clause

The non-compete clause prevents an employee from going to work for a competitor for a specified duration after an employee has left his/her company. The purpose of the non-compete clause is namely to prevent trade secrets from being leaked to a competing firm, and additionally, to prevent the employee from starting a competing firm of his/her own.

*California employees cannot be subjected to non-compete agreements due to the fact that they are not enforceable in CA.  However, while California employees are exempt from the non-compete clause, there are a number of other ways companies can enforce the protection of their trade secrets.

6) What isn’t written in your contract is just as important as what is.

You’ve read your contract top to bottom, forwards and backwards…not a single thing is getting past you, Sherlock. While I hate to be the bearer of bad news, it turns out, the language used in employment documents isn’t as straightforward as you would think. While you may have a pretty solid understanding of what to look for, it’s actually rather difficult to spot what’s being left out.

This is where an attorney can be of great assistance in helping you understand just what is expected of you, and what you in turn can expect of your employer. Go here if you need a lawyer to review your employment agreement.

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