What to know about employment contract
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What to know about employment contract
I have been given one and need to know what I need to look for.
Hello ****!
My name is Dolan and thank you so much for contacting me!
I just had a few quick questions for you:
Is there something specific in the agreement that concerns you?
I have briefly looked at it and it was longer than I expected with a lot of legal language. Are there any general clauses in an employment contract I should be aware of?
Definitely there are - What state is this in?
I live in California and the company is also in California.
Ok! Did you need to tell me anything else? If not, I can start with answering your question.
No, I think it would just be helpful to hear what to generally know about employment contracts.
Ok! I've been working on an answer while we've been chatting, so it'll just be a moment.
First, congrats on the new job! There are a few important things to look out for. The most important thing to look out for is pay and pay frequency. Many people are often surprised at how often their pay issues aren't discussed. Second, look toward any other compensation like stock options or restricted stock units. These parts can not only be confusing, but the terms can be complex and are triggered only in the event of certain things happening (e.g., the sale of a company). Third, you will want to see if your contract has a fixed end date. This means that if it does not, you can be let go for any reason or no reason at all, and this often comes as a surprise. Fourth, I would also consider making sure that the role you are being assigned matches with what you understand and that the duties are generally listed as well. Finally, check to see if there are any termination clauses. Sometimes, there are clauses that state when and how you may be let go or may require something like 30 days' notice if you quit. Does that help clarify things? I want to make sure I didn’t leave anything out.
If you'd like, we can always review your agreement. The cost is around $***-$***depending on its length, but we can always set up a job and I can go into the contract in more detail and answer questions you have!
Yes, that helps clarify. So to summarize:
1. compensation terms
2. fixed end date
3. role
4. termination
There aren't any stock options for this position. It is just salaried.
Can you tell me the importance of the 'fixed end date'?
If there is one, does that mean they can't fire me for any reason?
No problem! That makes it even easier. The reason a fixed end date is important is that if there is no fixed end date, your agreement starts over every single day. This means they do not need to give you any notice of termination.
With a fixed end date, then you are guaranteed to be able to stay until that end date unless they have some specific reason to let you go earlier (misconduct) or they give you some notice so you can plan better (e.g., 30 days).
Most agreements do NOT have a fixed end date. I know it’s a lot, but does that help make sense of things a bit more? I want to make sure I didn’t leave anything out.
Yeah, there isn't any sort of fixed end date on this I don't believe.
So at-will employment basically means they can terminate me whenever they want?
I just did a quick Google because I saw it in the contract.
Are there any rights I have around termination if it is at-will?
Correct. At-will employment is employment that either party (employer or employee) can terminate at any time, for any reason or no reason at all. This also means an employer can change the terms of the agreement at any time, and it also means the employee is allowed to quit at any time, too. Specifically, under California Labor Code 2922 ( https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB§ionNum=2922. ) , all employment in the state is presumed to be “at-will” unless the parties agree otherwise.
So in other words, you and pretty much everyone who has a job in CA can be let go, but it also means you can take off if you get a better opportunity.
OK, I see.
There is a non-compete clause in here but I think I saw recently that non-competes aren't allowed anymore? I also thought they weren't allowed in California? I think it is a bit odd it is in here TBH.
Correct! Business and Professions Code 16660 ( https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC§ionNum=16600. ) prohibits non-competes for employees. This means that if it's in there, it's just not enforceable. If you find a competitor, you can easily leave, even if you start your own business that competes directly.
This is different from non-solicitation clauses. Non-solicitation is legal, meaning you can't scoop up their current or former clients, but you can prospect for new ones.
OK, got it.
I'm being hired onto the marketing team.
It says my role is 'Director of Marketing,' which is what was discussed with me.
They have also added a lot of other responsibilities.
How important is it for this to be accurate with what we discussed during the interview process?
It's critically important that you discuss the scope of your duties. What you can do is ask what are the top four tasks that you will need to do to help the organization be successful. Of course, stay flexible and remember they have a right to demote you to the lowest person in the organization two days after you come on; however, try to help get on the same page as them with respect to what it is they really, truly need you to do.
OK, got it.
My last question is about benefits.
It looks like they have a 'good' benefits package - but what are pretty standard benefits to offer an employee?
Also, what would a really excellent benefits package look like and a bad one?
Sure thing! In most cases, a good benefits package will include full health, dental, vision, and maybe even life insurance or long-term and death and disability insurance.
There will also be additional benefits like a retirement plan, health savings plan, or even access to other kinds of plans like gym memberships or parking passes. At the very least, medical and dental plans will help make sure you and your family stay healthy!
OK, got it. Seems like they are offering a decent benefits package.
This clause:
OTHER EMPLOYMENT. Employee shall devote his full time, attention, knowledge, and skills to the business and interests of Employer, and Employer shall be entitled to all benefits, profits, or other issues arising from or incident to all work, services, and advice of Employee. Employee shall not, during the term hereof, be interested directly or indirectly, in any manner, as partner, officer, director, stockholder, advisor, employee, or in any other capacity in any other business similar to Employer’s business. Nothing contained herein shall be deemed to prevent or limit Employee from acquiring stock or other securities of any corporation whose stock or securities are owned or are traded on any public exchange, or from investing in real estate.
Am I right in assuming this means I cannot take on any side project work?
I do some freelancing for people and just want to be careful.
Correct! This is a "moonlighting" clause that means you can't do any side work. They want your full time and attention on the job. One of the law firms I used to work for did the same thing. Will it be easy for them to know if you are moonlighting? No. If they find out that you are, would they have a right to fire? Yes. So you'd have to behave accordingly, if you catch my drift!
Yes, makes sense.
For sure!
I want to ensure you feel completely satisfied with our conversation.
Were there any details I missed?
Did you have any concerns about this issue that still need to be addressed?
I'm happy to help.
So this contract is 12 pages. What would you charge to review it for me? I'm still a bit nervous and if it isn't too much I would consider it.
It makes total sense to be nervous, but this is what we're here for! At 12 pages, I can do it for a $*** flat fee. This means I will review any terms that would be outright illegal, address any terms that need clarification, and suggest any terms that I believe need to be put in.
Are there extra fees if you need to negotiate on my behalf?
Yes, I can set up a job on the site as well. It'd be an hourly fee and my regular fee is $*** per hour, but I would work diligently on your behalf to try to get you the best deal possible. For now, my recommendation is to at least have me review to see if it's even worth your time before you spend more!
OK, sounds good. Can you send me an offer here, please? Will hire you.
For sure I will! Did you have any other details you needed addressed or did you have any concerns in general you still needed addressed?
No, I think that's good. We talked about a lot of these employment terms but think it is good to have you look at the actual language. Thanks for the help and look forward to working with you.
[FILE UPLOAD]
Here is the employment agreement.
Great! My turnaround time is approximately 48 hours, so I can create a job so you can see everything, and once you click "accept," I'm all yours!
Got it, thank you.
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