Starting a new job is never easy. Perhaps you’re dealing with the sometimes-messy task of resigning from your current employment, or maybe you are up to your neck in actual boxes and bubble wrap in preparation to relocate for the new position. Or perhaps you have been unemployed and this new role is a much-hoped for opportunity.
But before you sign the offer letter, contract, or any other documents that are presented to you as a part of the on-boarding process, be sure to take the time to carefully review the language contained within. You should examine carefully that the offer letter and other documents accurately reflect not only that t which you have been offered, but also to determine the obligations to which you are committing, either during your employment or after it ceases.
Some of the types of documents you may see at the commencement of the employment relationship as well as what to look for are as follows:
Offer Letters
Generally, offer letters contain the basic terms related to an employment offer, including start date, title, salary, location of work, and other terms related to compensation and benefits.
An offer letter can have the force of a full employment contract and contain more complex terms; therefore, it is important to tread carefully when signing. We have had many clients present their seemingly innocuous offer letters for a quick review, only to discover that there are significant issues in terms of employment expectations or overly broad obligations upon termination of the employment relationship.
Employment Contracts
An employment contract sets forth the most integral terms of the employment relationship and creates obligations on behalf of the employer and the employee. This agreement (should) contain information related to how the employee will perform the tasks for which he or she has been hired (duties, reporting relationship, compensation) as well information about how the relationship will end, including circumstances that will give rise to termination and whether and when severance will be payable. Be mindful of attorneys’ fee provisions which shift the burden of fees to the employee in the event of breach, as well as arbitration clauses and jury trial waivers which limit an employee’s remedies in the event of suit. Also look for restrictions on your activities following termination, such as non-compete and non-solicitation clauses.
Confidentiality Agreements
Employers often request that an employee formally commit to protecting and holding in confidence information that they learn during their employment relationship beyond what may already be protected by relevant statutes (such as state federal trade secret laws). Sometimes these agreements can operate as a restriction on future employment in that an employer may be able to prohibit the employee from working for a competitor in the future by proving to a court that the new employment will inevitably lead the employee to rely on and use the former employer’s trade secrets.
Non-Compete Agreements
Non-compete agreements prevent an employee from working (including through a formal employment relationship or as a consultant) in a particular industry, for a class of employers, or within a geographic area for a specific duration following termination (anywhere from months to years). This can significantly inhibit your ability to earn a living in your area of expertise or specialty following termination, so press for any restrictions to be as narrow as possible in scope and duration.
Non-Solicitation Agreements
Non-Solicitation agreements restrict an employee from soliciting (which may include selling to or even contacting) customers or potential customers of the employer following termination of the relationship. If such language is broad enough, a clause styled as a non-solicit may very well be a non-compete.
Should you engage an attorney to help transition to a new employer?
In the flurry of beginning a new employment relationship, documentation can sometimes become an afterthought. Unfortunately, many clients come to us at the termination of a relationship not being well-versed in what they signed at the time the relationship began. Those afterthoughts can potentially impede one’s ability to earn a living or receive the valuable compensation for which they have worked so diligently. The importance of obtaining critical legal advice at the early stage of an employment relationship cannot be overstated. Engaging an attorney to help you negotiate these important terms can be very beneficial in obtaining meaningful changes to the documents, even when it is believed that the offer may be on a “take-it-or-leave-it” basis. In some scenarios where changes are unable to be made, this may ultimately deter you from moving forward with the offer as the benefits do not outweigh the risks.
Working with an attorney can also help take the pressure off a burgeoning employer-employee relationship; indirect negotiations through counsel can help preserve a positive relationship by not forcing the parties to take a directly adverse position to one another in sorting out terms of the relationship. Seeking professional advice regarding your new job also contains an implicit statement about the importance you are placing on this new relationship as well as the value you believe you are bringing along.
At the very least, once both parties are in agreement (even if no changes to the documents were made), you will have been briefed about the potential outcomes that might occur within or after the relationship, such as the loss of a bonus or equity due to a termination prior to the vesting date. So keep drafting your resignation letter or packing up the boxes, and let our experienced team of attorneys help you understand and negotiate the details.