Hiring agreements are becoming too complicated. As an employment lawyer, sometimes even I have a hard time understanding them. This may unduly benefit employers who have a better grasp on how these contracts operate and greater access to lawyers who draft these contracts to protect them.
How can you level the playing field? If you have recently received or are expecting an offer of employment or consulting, here are some straightforward tips you should consider.
Timing: If you are being pressured to sign a contract very quickly, you should first pause and ask yourself why. A contract will define your rights and entitlements throughout your employment. Your best opportunity to negotiate the terms is before you begin. Therefore, you should take time to consider the offer, obtain advice and be certain that the terms are fair.
How much time must you receive to review an offer? There is no defined rule. However, keep in mind that there is no cooling-off period to change your mind, and demonstrating that you signed a document under duress is an uphill battle. Even if you are given an unreasonably short deadline, you will generally be held to the terms that you sign.
Most companies can wait a few days for you to review the terms of their offer. Therefore, if you are given less time than you feel comfortable with, you should communicate with the company to request a short extension and tell them when you will be able to respond. It is far better to ask for an extension than to sign off and gamble that the contract will later be disregarded.
Leaving one job for another: The biggest mistake you can make in this situation is to resign from your position before the terms with the new company are locked in. Most contracts are not binding until various conditions are met, such as a background or reference check. Make sure that these terms are either waived or satisfied by the new company before you can safely assume that the offer is firm.
Severance language: This is one of the most important sections of a contract, and employers are increasingly writing agreements in a manner that attempts to limit employee severance rights to less than they would have otherwise received. It is difficult to generalize, but try to stay away from clauses that provide you with only your bare-minimum statutory rights. The language may look like it is fair, but statutory rights are the least amount of severance you can receive and can be many times less than what a court could award. Severance clauses can be negotiated with employers, but it takes an understanding of what is fair and what you stand to gain or lose. This is where you definitely need to obtain professional advice.
Probation: You are not a probationary employee for any period of time unless the contract contains a clearly written probationary clause. Some employers will agree to remove this language on request, and others will insist that it has to remain. There is virtually no risk asking that the clause be deleted, so this is one of the first changes I would recommend that any prospective employee try to make to a contract.
Non-competition clauses: Contrary to popular thinking, a non-compete clause can be enforced in court. However, it has to be properly drafted, and the terms must not overreach. Some employers get this right, and others fail. This is where it gets interesting. If you are asked to sign a contract with a non-compete clause that is way overboard, it may be better to leave it alone rather than try to make the language less restrictive. Once you start negotiating these terms, it can actually make it easier for the clause to be upheld. In other cases, the premise of a non-compete is clearly unnecessary and should be removed altogether.
Changes permitted: Some contracts contain language permitting employers the right to make future changes to compensation, job duties or the location of your job – all without your consent. I don’t know why anyone would agree to this, but I still see these clauses often enough that it leads me to believe many employees just don’t catch them. This language should be crossed out.
Negotiations: Ironically, most of my clients feel comfortable asking for an extra week’s vacation or a slight bump in pay, yet they are fearful to try to renegotiate any of the legalese. Most employers are quite reasonable, and once you receive an offer, they are committed to hiring you for the job. That should provide you with some reassurance when debating whether to try to improve the terms of an agreement versus the small risks of that offer being withdrawn.
Daniel A. Lublin is a founding partner of Whitten & Lublin Employment & Labour Lawyers. Do you have a question about workplace law? You can e-mail him here.