employees

Employment Agreements | The Power of Documents

The clearest example of the power of paper is the employment agreement. As an enforceable contract, it dictates the rules of the game. Employment Agreements can give you RIGHTS to job security, to severance after termination, and to specified benefits. Employment agreements can also take away important rights, such as the right to have disputes heard by a jury. Because of the importance and technical nature of the terminology in these agreements, an employee should NEVER sign an employment agreement without first consulting an attorney.

Traditionally, only key employees or employees in a very tight job market have sufficient clout to get good employment agreements. Sometimes executives also get very favorable contract provisions in the event of a “change of control” as part of a company’s attempt to dissuade outside corporations from a hostile takeover of the company.

Unfortunately, Employment Agreements are often used to TAKE AWAY rights for employees rather than to confer rights. This is for obvious reasons: employers do not want employees to have extra rights. Common rights which employment agreements may take away include: the right to work for a competitor immediately following termination, the right to enforce verbal promises of job security, and the right to litigate (as opposed to arbitrate) employment disputes.

The key language to look out for in employment agreements and other employer documents is language that says that you are an “at will” employee who can be terminated at any time for any reason. While it is true that generally throughout the United States almost all non-union non-government employees are employed “at will”, in many states promises of job security or job guarantees are enforceable unless the employee directly or indirectly consents to being an “at will” employee.

Although the “at will” language often appears in handbooks to pretend to give you something (the right to terminate yourself!), this language is designed to do one thing ­ take away many legal rights. Remember, if you agree to this language, you may be giving up all rights to job security or fairness you might otherwise have, regardless of future promises to the contrary and regardless of other language in the agreement. Be careful.

There are four basic rules for employees in dealing with employment agreements.

  1. GET ONE if you can, rather than relying on verbal promises.
  2. WATCH OUT for “at will” language;
  3. DO NOT SIGN AN EMPLOYMENT AGREEMENT unless you have consulted an employment attorney to help you understand and/or negotiate the terms. Do not assume that you can understand what the agreement means by yourself. Even if ordinary words are used in the agreement, the words do not necessarily have ordinary meaning under our legal system.
  4. RESPECT THE POWER of employment agreements and take them seriously.
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