Knowing whether you have an employment agreement, and what type of employment agreement it is, may determine your workplace rights, especially when considering what qualifies as wrongful termination. While written employment agreements are the most straightforward and easiest to use in court, it is not safe to assume that an employment agreement has not been created just because it isn’t written down. Even where no written agreement exists, a court may find that a worker has enforceable rights against their employer under other legal principles that make an agreed promise enforceable, even when it isn’t written down, by assuming that an agreement was implied. This page provides more information about employment agreements and your rights under them.

1. What is an Employment Agreement?

An employment agreement is a legally binding contract between an employer and an employee that outlines the terms of employment. It typically covers details such as salary, work responsibilities, benefits, and terms for termination. Employment agreements can be written, oral, or implied by company policies.

2. Why is it Important to Review My Employment Agreement?

An employment agreement is crucial because it sets the foundation for your role and responsibilities. Carefully reviewing it ensures you understand your obligations, benefits, and any restrictions that may apply during or after your employment.

3. What Common Elements Are in an Employment Agreement?

Key elements often include:

• Job Title and Duties: Describes your position and expected responsibilities.
• Compensation and Benefits: Details your salary, bonuses, benefits, and other perks.
• Work Hours and Location: Outlines where and when you are expected to work.
• Confidentiality and Non-Disclosure: Prevents you from sharing sensitive company information.
• Non-Compete and Non-Solicitation: Restricts you from working with competitors or soliciting clients/employees post-employment.
• Termination Terms: Defines what happens if the employment ends and any notice requirements.

4. Can My Job Duties Change Over Time?

Yes, most employment agreements allow employers to adjust duties as needed. If your job role significantly changes, it’s best to request an updated agreement or clarification from your employer to avoid misunderstandings.

5. What Should I Know About “At-Will” Employment?

In “at-will” employment (common in the U.S.), either you or the employer can terminate the employment relationship at any time, with or without cause, and without prior notice. Check your agreement to see if it includes an “at-will” clause.

6. What is a Non-Compete Clause, and How Does it Affect Me?

A non-compete clause restricts you from working with competitors for a specific period after leaving the company. Be sure to understand the duration, geographic limitations, and scope of activities restricted by this clause. Non-compete enforceability varies by state. See workplacefairness.org for more information on noncompete agreements.

7. How Can a Non-Disclosure Agreement (NDA) Affect My Future Employment?

An NDA requires you to keep company information confidential, both during and after your employment. This can impact your ability to share certain skills or knowledge with future employers. Be aware of what is covered under the NDA, such as client information, trade secrets, or proprietary processes. See workplacefairness.org for more information on nondisclosure agreements.

8. What Does a Non-Solicitation Clause Mean?

A non-solicitation clause prevents you from recruiting former colleagues or clients from your previous employer. This clause is meant to protect the employer’s relationships and workforce. Check the agreement to understand how long this restriction applies after your employment ends.

9. Will I Own the Work I Create for the Company?

Typically, work created during employment is considered the property of the employer. This is often included under an “Intellectual Property” or “Work-for-Hire” clause. Make sure to clarify this, especially if your work involves innovation, design, or intellectual property.

10. What Are “Severance Terms” in an Employment Agreement?

Severance terms outline any compensation or benefits you may receive if your employment is terminated. Severance packages are not always provided, so if they are mentioned, pay close attention to the conditions that apply, such as release of claims or non-disparagement clauses.

11. What Are “Arbitration Clauses,” and Why Are They Included?

An arbitration clause requires you to resolve disputes through arbitration rather than through the court system. Arbitration is usually faster and less formal, but it may limit certain legal options. Review any arbitration clause carefully to understand how disputes will be handled.

12. What Should I Do if I Don’t Agree with Certain Terms?

If there are terms that you’re uncomfortable with, consider negotiating them before signing. Seek legal advice if necessary. Employers may be open to adjustments, especially for high-value employees or key positions.

13. Can an Employer Change My Employment Agreement After I Sign It?

Generally, employment agreements can be modified only if both parties agree. However, employers may have policies allowing them to amend certain terms (e.g., benefits). Significant changes should be documented in writing and signed by both you and the employer.

14. How Long Do Employment Agreement Terms Last?

Some terms, like confidentiality and non-compete clauses, may apply even after employment ends. Review the duration of each clause and understand your post-employment obligations.

15. Should I Consult a Lawyer Before Signing an Employment Agreement?

Yes, it’s often wise to consult a lawyer, especially if the agreement includes complex or restrictive clauses. An attorney can help you understand the implications of the contract and advise on potential negotiation points.