3 Employee Contract Clauses To Be Aware Of Before Signing

You've been pounding the pavement for quite some time, but now you've finally got a job lined up that you're really excited for. While it's great that you've found a place of employment you think you'll love, it's important not to let that excitement cloud your judgement and sign an employee contract with questionable clauses or vague agreements. To learn more about common employment contract clauses and what they might mean for you, check out the three most common ones below.

The Non-Compete Clause

This is a very common clause found in employment contracts throughout the United States, but it's important to understand the limits and guidelines before signing on the dotted line.

So what does this clause mean? Essentially, this clause was created to protect sensitive business information and prevent employees from sharing said information with industry competitors. This is great for employers, but not so great for employees who plan to be working in a certain industry for years to come. Fortunately, the guidelines surrounding non-compete clauses are becoming more stringent, meaning employers cannot require that an employee stay out of the industry following their employment with said employer for an unreasonable amount of time. The meaning of unreasonable will vary from industry to industry, so it doesn't hurt to consult with an employment attorney prior to agreeing to the clause.

The Discretionary Bonus

While this employee contract clause isn't a deal breaker for the majority of employees, there's a few things you should consider prior to agreeing to such a clause to avoid confusion.

In layman's terms, a 'discretionary' bonus clause means that any work-related bonus are entirely based on the discretion of the employer. The majority of these clauses are vague in order to protect the employer, but it's a good idea to hash out the details of this clause prior to signing an employment contract. Ask the employer specific questions about bonuses, and then have those terms added to the contract. For example, what measurements will be used to specify employee success, and what kinds of bonuses can an employee expect for meeting those standards?

The Assignment-Of-Inventions Agreement

What you create in your own free time is yours, right? If you signed an employment contract with an assignment-of-inventions agreement, think again.

In the simplest form, an assignment-of-inventions agreement is a contract clause which gives all legal rights from employee inventions (created during the time of employment) to the employer. This is a common clause for web designers and other such creative positions, but that doesn't mean that you should take it lightly if you come across it in your employment contract. So, what can you do? Well, you can always refuse to sign the contract, though this isn't the best option if employment is on the line. Another option is to ask for clarification on the clause, in writing, which states the limits regarding the agreement. For example, you may ask that any inventions done in your free time without employer equipment don't fall under the clause (though, some states already follow this guideline).

If you're struggling to understand certain clauses in your employment contract, or if you'd like to dispute an agreement in a contract you've already signed, consult with an employment attorney today. Contact a firm like Fitzpatrick, Skemp & Associates LLC to learn more.