Negotiating an Employment AgreementEmployment Contracts or employment agreements come in a variety of different shapes and sizes, depending upon industry standards; the position being offered within the company; and the size of the company that you may be working for. Many companies, when offering a position of manager or higher within their company, will present an offer of employment through the use of an employment contract or an employment agreement. These documents have a two-fold purpose, enticing a potential employee to sign on while at the same time protecting the employer should the employer/employee relationship go south.

If an employment contract or an employment agreement is presented to you, and depending on the need or desire of the employer to have you sign on as an employee, these agreements may have some wiggle room and may be able to be negotiated. Either way, if you are presented with an employment contract or employment agreement, you should always seek the advice of a qualified business lawyer or contract attorney and have them review the agreement so you know what you are getting yourself into employment-wise.

Possible Areas of Negotiation

Probationary Periods

Most companies will include some type of probationary period for all employees. During this period of time, your employment may be subject to harsher scrutiny, and the review process may be more frequent. Furthermore, during this period, if there are financial incentives provided to you in the agreement, and if you do not continue to be employed during the entire contract period, you may be liable for reimbursement of monies spent by your employer and for incentives paid by the employer. These terms can be negotiable depending on the desire of the company to bring you on as an employee.

Knowing these conditions can prevent misunderstandings during your employment and, if the position doesn’t continue during the entire contract period, the financial hardships that may arise.

Best Efforts

All employees are expected to put forth their best efforts at work and in living up to their end of the agreement. This may be especially important in positions where the employee has a fiduciary duty or must abide by a higher standard of professional ethics.

Profit Sharing Plan Equity

Some companies will offer profit sharing options such as 401K plans, retirement plans and/or annual bonuses. As such, in these agreements, employees who contribute directly to the overall success of the company can generally expect to see greater incentives and an increase in their income. Employees with a longer tenure can receive a greater percentage of the profit share. These terms can be negotiated depending on the desire of the employer to enlist the employee.

Non-Compete Clauses

Non-compete clauses in employment agreements are often a vital component. Most businesses invest time and money in an employee and that employee makes business contacts with the public or other businesses along the way, and that business should remain with the employer where the contact was made.

Non-compete clauses offer an alternative for a business to protect their interest in these public contacts and business opportunities. Although Non-compete clauses can sometimes be difficult to enforce, especially if they keep a person from being able to make a living should the employee/employer relationship end, these Non-compete clauses should be taken seriously and negotiated thoroughly. These terms can be negotiable in keeping with the law.

Termination and Severance Pay

Should the employer/employee relationship end, some employers offer severance pay, especially to key employees. This severance pay can include payment of your salary for the term of the contract, unless there was a serious breach of the agreement, usually as specified in the agreement. Under these clauses, the agreement should clearly outline the duties and responsibilities of each party in the event that employment should come to an untimely end. These terms can be negotiable depending on the desire of the company in bringing you on as an employee.

Remember, most employment is “At Will,” which means that the employee was hired by an employer without an Employment Contract or an Employment Agreement.  Unless there is an executed Employment Contract or an Employment Agreement entered into as a part of your employment, any negotiation(s) that you make, either way and which is not in writing may not be enforceable.

Contact a qualified business attorney or contract lawyer to assist you in understanding the agreement that you are entering into; in negotiating the agreement; or in presenting alternatives to the offer as presented in the agreement by your employer. The business attorneys and contract lawyers at the law offices of Goldstein & Scopellite, PC know the law and in the art of negotiation.

Goldstein & Scopellite, PC, established in the 2002, has offices located in Dallas, Texas and Tucson, Arizona.  For more information, see their local listing in D Magazine or visit their websites at: www.lawyersdallas.com or www.lawyers-tucson.com.

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