Top Things to Know About Employment Contracts

Due to spiraling lawsuits, more and more companies are having employees sign employment contracts.  These contracts spell out the terms and conditions of working for that particular company.  The contracts have become more legal in nature but there are several things that you need to know and understand prior to signing your employment contract to be successful.

• Read the contract in its entirety before you sign it.  If you do not understand what you are reading, seek legal advice.  The law assumes that your signature indicates that you have read and understood the contents of the contract.


• Read all employee or personnel handbooks that are referred to as a part of the contract.  If they are not offered by the employe,r ask for them.  Ensure that you understand all components that the contract is referencing.


• Have a clear understanding of who will own your work product if this is relevant.  Make sure that the contract does not create a situation where anything that you create or design will belong to the company whether or not you are “on the clock.”


• Look for “choice of law” clauses.  This means that the laws that govern your hiring or your firing may not necessarily be the laws of the state that you live in.  Many companies are incorporated in one state but work out of several others.  A choice of law clause means that the employer can choose to use whichever laws that are more favorable to them.


• Understand that the contract can cover you after you leave through non-disclosure agreements.  This prevents you from selling or sharing their information with others.


• Look for covenant not to compete clauses – these are quite common and can cover you for six months or longer after you leave the company and will prevent you from engaging in any type of employment that they feel competes with them or uses proprietary information that you have gleaned from them. 


• Remember the time to negotiate your contract is prior to signing it.  Once you have signed your contract it is difficult to go back and change the contents of the contract that is why it is so important to read your contract.