What Should Workers Know about Employment Contracts?
Employment contracts outline the terms of an employer-employee relationship. Written employment agreements may not be necessary for every employment relationship. It is, however, advisable to use employment contracts when hiring high-level professionals and executives to ensure clarity, define the scope of the relationship, and set expectations for each party.
A business must take care when constructing employment contracts. Employees must be even more careful because they are often asked to sign these agreements quickly. There are several parts of an employment contract that must be considered, and it might help to speak with a South Jersey employment lawyer before signing. Employees who have not been provided employment contracts may also want to speak to a lawyer when they believe their rights should be more clearly defined.
Why is My Employment Contract Important?
Employment contracts cover every part of the worker’s job. The contract also covers protections for both parties, how information is to be shared or managed, and what the employee can do or say when they are no longer employed by the corporation. An employee who has a definite set of responsibilities can perform their duties without overstepping or insulting anyone else who works for the company. This is also an easy way to organize a business.
These contracts also explain how the employee will be paid, how they will receive benefits, and how they can take leave from work. An employee’s contract specifies how they will receive paid time off, when the office will be closed, how vacations are to be scheduled, and how employees accrue vacation time. The contract also defines how disputes can be resolved, noting which state or federal laws will be used. Employees should speak to an employment lawyer when these contracts are expansive, confusing, and may need to be negotiated.
What Terms are Important in an Employment Contract?
An employment contract will have a range of terms that guide the employer and the employee in fulfilling the contract. Employees may not know what these terms mean, or they may not realize that their contracts will feature this level of detail. Employees need to be aware of these terms when reviewing an employment contract. If the contract is confusing, an employee should reach out to an employment lawyer for assistance. A lawyer can review the contract or help the employee understand why the contract has been worded in a particular way.
Duration of employment: An employment contract should define the time period for the position. Some jobs are indefinite, but others are limited. This section needs to be checked to ensure that employment is not limited. If employment is limited, the duration must be agreed to by both parties. The contract might also include a renewal clause if the employer needs more services in the future.
Grounds for termination: The termination clause should include grounds for termination and the prohibited behaviors that may be cause for employment termination. The sections covering grounds for termination are often the most important part of the contract. An employer might attempt to fire an employee without cause, and this section of the contract will show that discrimination or a contract breach has taken place.
This part of the contract can also list specific actions that might result in termination, or this list might be fairly broad. An employee can perform their duties much more effectively if they know specifically what might cause them to be terminated. Separation and severance terms should also be included in this section. Employees should fight for a contract that provides severance if they are terminated. Additionally, the contract should state how long the employee has to remove their personal items, if they are allowed back on the premises, and if they are allowed contact with other employees of the corporation.
At-will contract: Sometimes, it may be necessary to include this term so that employees know their employment is at-will, meaning that the employee may resign at any time, and the employer may also fire the employee at any time. New Jersey is an at-will employment state, but that does not mean that every employee understands this. At the same time, firing employees for illegal, retaliatory, or discriminatory reasons is prohibited. Employees who believe they have been victims of discrimination or retaliation should reach out to an employment lawyer as soon as possible.
Salary: Employment contracts should include the hourly pay, yearly salary, bonuses, or overall compensation for the position. The salary section is used only for pay provided for the job. Employees need to know how they will be paid, how often they will be paid, and how much they can make during the year.
Benefits: Benefits for an employee include health insurance; life insurance; retirement benefits, including matching payments from the employer; and other payments that may be made. For example, a church might pay the pastor a salary along with health insurance and a housing allowance. All these figures should be written clearly so that the employee understands the benefits for which they are entitled.
Leave: Leave should include holidays when the office is closed, paid time off, vacations, sick leave, jury duty, and bereavement leave. This portion of the contract should be specific because the employee also needs to know how they will accrue sick or vacation time during the year. If the business wishes to close on days other than those listed, employees should be made aware of these closings.
Duties and responsibilities: This section should explain all duties for which the worker is expected to perform. Many jobs require a lot of work, and the employee may be asked to handle several different tasks at the same time. For example, a manager’s contract should detail the team they will manage. If the manager is expected to hold weekly meetings, teach sales courses, or perform any other duties beyond their team, these duties should be included in the contract.
These terms are used to prevent confusion when reading an employee contract, and employees should consult with an employment lawyer when the contract is confusing or contains troublesome language.
How Does My Employment Contract Protect Both Parties?
A well-written employment contract is designed to protect the rights of both the employer and the employees.
Dispute resolution: Employers can provide methods and means for resolving conflicts during employment, as well as preferred methods of dispute resolution involving employment. Many employers wish to avoid litigation and may require arbitration in cases of employment claims. If this is the case, employees must be prepared to go to an arbitration hearing with their lawyer. The employer will have a team ready to litigate the case, and the employee should have a representative who will speak on their behalf.
Choice of law: Employers can also determine which state laws will govern a dispute. This can obligate the employee to litigate and be governed only by the laws of the state identified in the employment agreement. Many employers have offices in several locations but are incorporated only in one state. Employers can limit uncertainties regarding which state laws will apply to disputes. At the same time, this might be troublesome for the employee. Employees who live in New Jersey but work for a corporation in Florida likely do not want to be governed by the laws of the state of Florida. It may be too difficult to find a lawyer in Florida and being governed by the employee’s local state laws might be a point of contention.
Should I Be Concerned about Signing Away My Rights?
There are some provisions of an employment contract designed to protect the employer. Employees need to be aware of the following provisions:
Intellectual property ownership: Employers should notify employees of their intellectual property rights. Employers can define ownership rights to patents, copyrights, and trade secrets of the company that are derived through the employee’s job performance. In certain cases, the employee might be allowed to patent ideas on their own with the company’s assistance. In a case such as this, the employee’s contract should clearly state that they are allowed to patent their inventions and license those inventions to the employer.
In most cases, however, the employer will retain all patents and rights to these inventions or breakthroughs. In short, the employee was doing what they were hired to do, while also using resources provided by the employer. If the employer allows the employee a non-exclusive license to use the invention or patent as much as they like, this license is often a perk of the job, and the employer still owns the patent.
Confidentiality: Confidential information often includes industry secrets, internal processes, and proprietary information that should not be shared with anyone outside of the company. Confidential information can include everything from the names and contacts for clients, along with information on new inventions, trademarks, and patents.
Privacy: Privacy is a term used to prevent the employee from sharing private information about the company or its employees with anyone else. This information might seem benign in comparison to industry secrets, but privacy is expected. The employer could be in breach of the contract if it shared private or personal information about the employee with an entity without the employee’s consent.
Non-compete clauses: A non-compete clause is added to an employment contract when the employer does not want the employee to work for the competition for a certain amount of time after leaving. This clause may be troublesome to the employee, or the duration of the clause may be too long for the employee to bear. Employees might also sign non-compete clauses without realizing that they have done so. If an employer takes action against the employee, an employment lawyer should get involved. The employee might also speak to a lawyer when they believe they should be released from a non-compete clause.
Non-disparagement: A non-disparagement clause might be used to prevent the employee from speaking negatively about the business once they have left. This might include giving interviews to news outlets, leaving poor reviews online, or even speaking poorly of the company to people who have been recruited or interviewed.
Written employment agreements tend to benefit the employer, and employees seldom have the power to truly negotiate the terms of the agreement. When employment contracts include terms that violate public policy or are considered unconscionable, they may not be upheld in a court of law.
Am I Supposed to Receive an Employment Contract?
An employment contract is not strictly necessary, and there are no federal or state laws requiring contracts be written for every job. These contracts, however, are typically offered to executives, managers, technical employees, and supervisors. These contracts define how the job is to be performed, and a series of contracts can define how a business is managed.
To be fair, an employer can manage itself properly without employment contracts. These documents, however, prevent one person from being overworked or saddled with responsibilities for which they did not sign up. Additionally, these contracts define how these workers should be compensated, the perks they will receive, and even help them retain their intellectual property.
Although a contract is not required, employees should ask to see a contract before starting any job.
Can I Negotiate My Employment Contract?
An employment contract is not a static document. When this document is handed over to the employee, they do not need to sign it immediately. A contract can be negotiated when necessary, but the employee should speak to a lawyer who can explain which parts of the contract should be amended and attend any meetings with the potential employer.
Employees may believe they should negotiate their contracts before taking a job. At the same time, these employees can renegotiate their contracts because of increased responsibility or exemplary performance. Employers often understand that new hires want to negotiate their contracts, but they might not offer much time to do so. Someone newly hired should let the employer know that a lawyer will be consulted before any requests or revisions are submitted.
What is an Oral Contract?
Employment contracts are typically written and disseminated to the employee, the employer, and possibly the human resources department. Oral contracts, on the contrary, are not recorded. Two or more people have come to an agreement, but they have not written, signed, notarized, or filed these contracts.
Although an oral contract is not written, it can be shown to have created a binding agreement. Employees are encouraged to document communication with their employers. It helps to know when these phone calls or conversations occurred, what was agreed to, and who was involved in these conversations. Employees must remember that New Jersey is a one-party consent jurisdiction under the New Jersey Wiretapping and Electronic Surveillance Act. It may help to record conversations pertaining to oral contracts.
How Should I Handle a Contract Breach?
Breach of contract is an uncomfortable situation that might include wrongful termination or a breach of the employee’s rights. Because employment contracts can be quite lengthy, several areas of the employee’s job and responsibilities are covered. When a breach of contract first occurs, the employee may want to speak to a manager or supervisor before hiring a lawyer.
A breach of contract may include termination of the worker’s employment. If the employee is not terminated, they need a lawyer who can protect their rights. If the worker has been terminated, they must retain a lawyer immediately because they may also need help finding gainful employment. In the case of an oral contract, the employee must share their documentation to prove that a verbal agreement was reached. Oral contracts typically do not include a dispute resolution and litigation sections that would keep the case out of court.
In a breach of contract situation, employees should not complain to the employer or speak to the corporation’s lawyers. The employer might attempt to offer a modest settlement for the breach of contract. Employees should not accept any overtures from the employer until they have spoken to a lawyer.
How Do I Prove My Contract was Breached?
Employees must first show that a valid contract exists when they believe their rights have been breached. When a printed contract is available, it is easy to prove that the contract exists. If an oral contract exists, the employee must establish an employer-employee relationship.
The specific portion of the contract that was breached should be cited in the complaint. These contracts often lay out specific duties and responsibilities. Because of this, a lawyer can look through the contract, find the sections that have been breached, and provide documentation to show that the breach occurred.
Employees who believe that their rights have been violated at work should begin documenting any issues that arise. Documentation can be used to prove that the contract was breached, and the lawyer may need to speak to eyewitnesses or other company employees who may be aware of a contract breach.
How Do I Recover Damages After a Breach of Contract?
Contracts may include conflict resolution tactics to be used instead of going to court. When the contract includes these dispute resolution options, a lawyer can attend all mediation hearings or settlement meetings. If the contract does not define how disputes will be resolved, the employee can file a claim for losses incurred as a result of the breach. If a lawyer is collecting information to show that a breach of contract occurred, they will also calculate the damages that were incurred. These damages might include lost wages, lost earning potential, lost benefits, and lost job opportunities.
When Do I Need a Lawyer?
All workers should consult with an employment lawyer when they have concerns about their employment contract. Employment contracts are often filled with legalese and legal definitions that are not understood by the public. Employees should read through the contract to understand the general idea of the document but allow a legal expert to review the contract in its entirety.
A lawyer can attend a contract signing if needed, or they can submit revisions or requests to the employer. When an employer receives requests from a lawyer, the manager or executive is much more likely to take those requests seriously. This is especially important when the employer has not written the contract properly or added problematic language.
The same could be said if the contract has terms that must change for the employee to sign. Although the employer might claim that all their contracts are written in this manner, a lawyer can break through these objections to negotiate a better deal. Employment contracts are not standardized, and they can be altered at any time if the employee believes they need certain assurances, perks, or benefits.
South Jersey Employment Lawyers at Sidney L. Gold & Associates, P.C. Help Clients with Employment Contracts
If you or someone you know needs assistance with an employment contract, the South Jersey employment lawyers at Sidney L. Gold & Associates, P.C. can assist you when navigating all the considerations necessary. Call us today at 215-569-1999 or contact us online for a free consultation. Located in Pennsauken, New Jersey, we serve clients throughout South Jersey, including Cherry Hill, Haddonfield, Marlton, Moorestown, and Mount Laurel.