By Derrek Cummings on August 2nd, 2024
Landing a new career opportunity is exciting after the job hunting, resume editing and interview process. However, you still need to complete the paperwork to start officially. Part of the onboarding process will involve signing your employment contract, which outlines the terms of your employment.
No matter how much you want the job, reviewing the contract before signing is critical. You may also want an experienced employment law attorney to review the document and advise. Understanding what you are signing is vital in ensuring your security as you take the next step in your career.
In this guide, you will learn the essential clauses and things to ask when you get a job offer. Weisberg Cummings provides contract review and negotiation services to employees in Pennsylvania. We can assist with your legal challenges before you commence the new chapter of your professional life.
What to Look out for When Signing a Contract
Some clauses can create challenges, affecting future career prospects and other opportunities. Others can even affect projects going on in the privacy of your home. Reviewing the employment contract can help you identify and renegotiate those terms. Below are a few examples:
1. Non-Compete Clause
Non-compete clauses prevent you from working for a competitor for some time after you leave your employment. They have become standard in many employment contracts, but you must read them carefully. Be mindful of the duration of the non-compete, as it can affect your career and life for years after you leave your job. Individuals working in a small industry, especially, have only a few options if they leave their current position. Thus, signing the agreement without considering this fact might make landing a new role challenging, as most employers might be competitors.
Non-compete clauses can be hard to enforce, especially if they have unreasonable geographic and time limits. Yet, it is easier to weed them out before you sign rather than after you are on the job market.
2. Exclusive Employment Provisions
These provisions are not enforceable in all states, but they are essential to note. Exclusive employment provisions bar you from taking on freelance work, seasonal work, a second job or other types of employment during your career. You may not start a side company while working for the employer — they limit what you can do in your own time.
Many workers choose to have second or even third jobs out of necessity, so being prevented from doing so can cause financial challenges for you later. Many Americans moonlight, and the number of workers with second jobs keeps rising. Signing contracts with such clauses may limit your options for addressing the issue.
3. Non-Solicitation Clause
This clause prevents you from working with the clients and employees of the company if you leave the employment for a specific period. The clause helps prevent former employees from scooping clients and talent from the company. However, the clause can also hamper your ability to launch new business ventures after you leave.
Supposing you bring in many clients, driving exponential growth for the company. Technically, those clients are the company’s clients, and you may not take them away when you leave the company. Thus, if you anticipate such a situation, it is best to negotiate to remove this clause or make the terms more flexible. For example, you can limit the duration to a reasonable one or two years.
4. No-Hire and No-Poach Clauses
No-hire, no-poach clauses prevent you from hiring employees from your current company or competitors. If you leave your job and want to hire the best talent by starting your own business, you could find your candidate pool severely limited by this clause. These clauses operate as non-solicitation but primarily focus on talent recruitment. They are generally enforceable between an employer and an employee but unlawful between competitive employers. This position arises due to a decision by the Pennsylvania Supreme Court.
5. Nondisclosure Agreements
These clauses bar you from sharing confidential or proprietary information of the company with others. In other words, you cannot share information about clients, technology, products, business plans, financials and other data. While this does not bar you from working for a competitor later, it means you cannot use confidential information from your current employer in your job with your new employer.
Look at nondisclosure agreements carefully. Some are so strict they prevent you from speaking about your employer or company with anyone in almost any capacity. In some industries, these clauses may also be written in such a way as to prevent whistleblowing activities. You need to understand what you can and cannot say about your employment to others if you sign a nondisclosure agreement.
6. Strict Intellectual Property and Work-for-Hire Rights
Some job contracts ask you to sign over all your work copyright to the employer. For example, if you are an in-house writer, all your work may belong to your employer. The most challenging aspect is those clauses that claim ownership of all patents, inventions, copyright and the like for projects you complete on your own time and away from your employer’s premises.
If you invent a new business product or artwork on your own time and without using your employer’s resources, you should ensure that intellectual property belongs to you. Bring clauses of this nature to the attention of your attorney. They may help you negotiate the clause so your property remains yours.
7. Invention Assignment Agreement
This clause requires you to reveal any inventions you have created before you start your job. The goal is to prevent workers from selling their inventions to competitors. However, it can mean the employer tries to claim ownership of your invention. Also, if you have been working on something on your own time before you entered into a work agreement with your employer, you will certainly want to retain ownership of your ideas.
8. Remedies and Limits on Arbitration or Class Action
Consider your contract limits and how you can make a claim against the employer. Are you waiving your right to bring a class action? Consider whether you are being asked to sign a contract to this effect outside of the offer letter or employment contract. If you are asked to waive your rights to class action or arbitration, look for an opt-out option or seek the help of an attorney.
Questions to Ask Before Signing a Job Contract
Another crucial consideration is asking the right questions before accepting the offer. Doing so helps you better understand the role and whether it’s a good fit. More importantly, getting clarifications lets you appreciate your rights and responsibilities in this new profession. Below are 10 vital questions to ask before accepting a job:
1. Can I Look This Over and Get Back to You?
You may be expected to sign right away. Your new employer may even have a pen ready for you to sign on the spot. The trouble is that the contract contains multiple clauses, and you need time to review them carefully. You may want to take the contract home and get an attorney to review it. An attorney knows what to take note of when signing an employment contract and can explain any terms you do not understand.
2. Am I an At-Will or Fixed-Term Employee?
What kind of job security are you gaining in your new position? An at-will employee does not receive much protection from involuntary termination, so you will want to consider security. Pennsylvania is an at-will employment state, meaning an employment contract is presumed at-will unless a contrary intention appears. Look at how your employment is described, as well as the start and the end dates. It could be that the job you believed was for three years may include a clause allowing your employer to terminate your contract at any time.
3. Am I Listed as a Full-Time Employee?
Determine whether you are listed as an independent contractor instead of an employee, with full benefits and a salary. Independent contractors usually have fewer protections and could be ineligible for workers’ compensation for workplace injuries or illnesses.
Conversely, if you are signing a job contract as an independent contractor, ensure the description and duties are clearly stated. You should be free to decide where and how you work and not be prohibited from pursuing other opportunities. Remember, if the employer misclassifies you as an independent contractor, you may not be getting the full benefits you should.
4. What Are the Grounds for Termination?
Ensure you understand the situations that can cause you to lose your job. Then, negotiate contracts with just-cause termination, which protects your job from termination at a whim. Additionally, ascertain whether the offer or contract includes any provision for severance payments if you are terminated for a reason other than for cause. Such a provision offers a cushion, even if the agreement allows another termination provision.
5. What Are the Benefits and Compensation?
Make sure your base pay is accurate in the contract. Also, review the benefits and bonuses. Are they guaranteed or discretionary? When will you receive bonuses and benefits, and under what circumstances? Does the contract cover overtime? If the contract provides benefits, compensation and overtime, ensure they are reasonable. Compare the salary and benefits to other positions in the area for someone with similar experience. If there are significant discrepancies, you may want to ask why that is.
You will also want to see salary increases clearly defined. Will you be eligible for increases to your wages at specific times? Will you need to undergo a review process to qualify for a better salary? If so, make sure you understand the process.
If there is no mention of salary increases, you could remain in your job with a static salary, even as the cost of living increases with inflation. In fact, the contract may allow the company to reduce your salary in specific situations. You will want to keep an eye on any clause that affects how your salary may change.
6. What Are My Job Description and My Responsibilities?
Ensure your job description and duties are clearly stated. This assessment ensures you perform the assigned responsibilities even with management changes. It also promotes clarity and reduces the risk of confusion.
When reviewing your job description, confirm whether the contract outlines how much time you will likely spend on various tasks. At the very least, have this information in writing. For example, if you take on a job as a designer, you want to spend all or most of your time performing that role instead of an administrative task.
7. What Happens if Ownership Changes or the Company Is Sold?
In today’s economy, you never know when ownership may change hands. Therefore, it is essential to ask whether there are potential acquisitions in the near future and how that would affect your job. You want to understand whether your employment will continue or be invalid if the company is sold or a new owner takes over. Phrase the question professionally and respectfully, but be direct. If the response is vague, you may seek clarification. Besides protecting your interests, this question demonstrates your long-term vision for working with the company.
8. What Are the Options for Remote and Flexible Work?
Most job ads indicate whether the position is fully remote, hybrid or in-person. Some also emphasize the job’s flexibility. These arrangements have become crucial recently, especially for establishing work-life balance. Even if the job post mentions flexibility, follow up before accepting the offer.
Ask about the nature of the flexibility and whether the employer provides the resources to make the arrangement feasible. Does the employer provide funds for a home office? How many days in a week are you expected to be in the office? What is the paid time off (PTO) structure? Getting answers lets you plan your career around your personal life, such as taking care of kids and having time for hobbies.
9. How Does the Company Ensure Professional Development?
Professional growth is vital, so ask the employer about their support. Do they have a structure for training? Do they cover the expenses for certification? Find out if they offer study leave or provide a stipend for conferences and training opportunities. Are these promises captured in the employment contract or company policy document? Asking these questions gives you a clear idea of how you can plan career advancement strategies.
10. How Happy Am I With the Way the Job Is Described in the Contract?
You may be excited about the job offer, but be patient. Ask yourself whether the role is what you expected. Compare the responsibilities described in the job ad and interviews with those presented in the contract — they should be substantially similar.
Also, how does the job description make you feel? Do you anticipate the role to be fulfilling and satisfying? Look beyond the compensation and consider the long-term implications for your career and life. A full-time employee spends significant hours at work, and you want that time to be a positive experience.
Speak to an Attorney to Review an Employment Contract or Offer Letter
Now that you know what to consider in an employment contract and the questions to ask in a job offer, what is the next step? Put what you have learned into practice. Understandably, contract review and negotiation can be technical, but employment attorneys can assist. They can explain your rights and identify potentially challenging clauses. Employers are usually open to negotiation, and an experienced lawyer understands how to approach this delicate subject.
The employment attorneys at Weisberg Cummings provide practical and tailor-made solutions to prospective employees in Pennsylvania. Even if you have accepted an offer or are considering leaving your current job, we can help you assess your options and rights. We dedicate time to understand your needs and help you protect your interests. Contact us today for a consultation!
