Employment Contracts: 8 Things an Executive Should Know Before Signing
The Law Firm of J.W. Stafford | September 27, 2017
Many people are thrilled to receive an offer. Still, they may not feel comfortable asking for a lot of details, fearing that they may appear to be uninterested in the offer. However, it is imperative that workers, especially executives, fully understand the terms of their employment contract.
Here are eight questions any executive should ask before signing their employment contract.
Is there a probationary period?
Many employers have an initial probationary period when employees are new. It may be 90 days, 6 months or even a year. Because these probationary periods allow your employer to let you go easily, it is crucial for executives to understand exactly how long they are on probation, if at all. If you already have a good position, you want to know exactly what you’re walking into.
What precisely are you being offered in compensation?
If you have questions about compensation, the time for clarification is before you sign anything. This is an area where it is important to ask enough questions. What is the salary? Are there bonuses, and if so, how are they earned? Is there stock or equity options? Are there perks or benefits that count as income that will affect my tax liability?
Is there a clear job description and scope of work in the contract?
This is a point that some executives may not think about. What exactly is the job description of the position you’re being offered? This is an important point because executives need to fully understand what will be expected of them on the job. If a position will have you doing the work of 2 or 3 people, then the compensation being offered may not be enough. To avoid confusion or resentment down the road, clarify the description of the role upfront.
How long is the contract in effect?
Many employment contracts are considered at will, but it is important to read carefully to note any surprises regarding the length of the contract. If you think you will have a job as long as you want it, but the contract says they can let you go in three years’ time, then you will want to be prepared for that possibility when you accept the job offer.
What constitutes “cause” to terminate?
If the contract is unclear about the scenarios in which you can be terminated, it is imperative that you understand this before signing. Are you able to be let go at-will, with no reason required? Or are you terminable under certain circumstances that would be considered “for cause.” Make sure you understand valid causes of termination and that the language in your employment contract is clear on the matter.
Will you own your work product?
If you work with patents, trademarked material, or produce any creative work in the course of your employment, you need to know what your ownership of your work product will be during and after the time you are engaged as an employee. Many engineers would like to retain ownership of their patents in order to make them more esteemed in their field. However, many corporations fully retain the rights to any work created within the scope of employment. If this is important to you, be sure to clarify.
Is there a non-compete clause?
A non-compete clause may seriously limit your ability to work in your home region for years. These clauses or agreements are not to be taken lightly. Each state has their own laws relating to what types of clauses an employer may or may not include in a non-compete. If you’re asked to sign an agreement with non-compete language, it is worth it to have an employment lawyer take a look to ensure that the agreement will not unreasonably restrict your professional activities in the future.
Are executives shielded from liability?
If you work in a risky business, it is a good idea to fully understand your potential exposure to personal liability through the course of your employment. If you work in a heavily regulated industry, or if your executive position comes with great fiduciary responsibility, it is a good idea to fully understand your potential liability for job related actions before signing the contract.
An employment contract is a serious legal document that shouldn’t be taken lightly. There is too much at stake; so, having experienced Baltimore employment lawyers to review your agreement prior to signing is always a good idea. If you can be confident that you are legally protected, your new position will get off to a successful start. Call The Law Firm of J.W. Stafford, L.L.C. today if you need to review an employment contract before accepting the job. We are an experienced employment law firm focused on representing Maryland employees at all levels.. Call 410-514-6099 or get in touch online today.