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Four Key Issues to Negotiate in Your Employment Agreement

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Atty. Syeda M. Madani
Should I skim the legalese and sign the employment contract?

This is the question most employees face once they get that dream job.

“Not so fast,” I tell my clients, “First, read the contract carefully and then have me review it once you think it’s ok.”  I tell them this because having an attorney review your contract and relevant employment documents ensures up front that you’re protected during, and after, employment.

To start, I tell my clients to focus on the following top, four key issues when reviewing their employment agreement.

#4:  Term of the Contract

I advise clients to look at the beginning and end date of the contract. Don’t think you – or they – are locked into a contract. Most contracts have early termination clauses that let employers terminate the contract with 30 or 60 days’ notice. To protect yourself, you should look for just-cause termination and language that will prevent the employer from having wide discretion in your termination.

#3:  Non-Compete and Non-Solicitation

Beware of signing an agreement that bars you from working for a competitor or in a certain geographic area after you leave the job. A legally enforceable non-compete clause would restrict you from directly competing with your former employer for a reasonable length of time and within reasonable geographic limits.  Discovering this clause after-the-fact only benefits your old employer to your detriment.  Non-solicitation term restricts your ability to do business with people you have worked with during your contract period.

The key to both of these restrictions is to focus on the reasonableness of these terms. If you see either or both of them in the contract offered to you, be cautious and discuss them with your attorney to make sure you’re best protected after you leave the job.

#2:  Scope of Employment

Focus on your responsibilities. Your position’s responsibilities should be clearly outlined and defined. Consider how your work will be evaluated and how this may impact your pay and benefits. Understand your role. Are you an employee or an independent contractor?  You need to understand the difference between these two terms because your employment status affects many issues such as benefits, taxes, and liability.  I also remind my clients that just because a contract says you’re an independent contractor doesn’t mean you necessarily are one.

#1:  Compensation and Benefits

This is the most obvious key issue. Start by looking at your base salary. The employment agreement should state your annual salary or hourly rate. There should be detailed clauses describing your raises, bonuses, or incentives and how they can be obtained. The benefits, like medical, dental, vision, pension, etc. should be outlined and the percentage of employer and employee contribution should be clearly defined. If offered, take a close look at your employer’s 401(k) plan and stock options.

Atty. Madani is now accepting a limited number of “Quick Call 30-Minute” appointments if you have specific questions about your employment agreement.  Get started here to book your appointment with Atty. Madani.

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