It’s possibly the worst rule in workplace law — corporations are permitted to insist that employees sign one-sided employment contracts that reduce their legal rights. Regrettably, employees with little bargaining power or an understanding of the law, seldom realize that their interests are being undermined. What are some of the more punitive contractual terms?
Probationary periods
New employees are not ‘probationary’ as a matter of law. They are only probationary if they agree to it in a contract. If they have, employers are then given the right to dismiss for reasons that would otherwise be insufficient and worse, by providing only minimum notice or pay, or often less.
Termination clauses
Without any language surrounding termination in the contract, employees are entitled to ‘fair’ severance upon their termination based on how long it would take to find another job. However, employers often draft contracts to provide employees with less than what is fair. Why would anyone to agree to this? Because they do not realize these terms can be negotiated or sometimes refused.
No contractual changes
Can the job be modified or changed? Once the job begins, employees can refuse any significant changes that negatively affect them, such as demotion or even reduced pay – unless they have agreed to a contract that permits it.
Post-employment restrictions
An employee’s only duty upon leaving a company is to keep information or trade secrets confidential. That is unless a specific post-employment restriction is written into a contract. If the contract is properly drafted, employers can prevent employees from working for a competitor, or soliciting clients or former colleagues upon their departure.
Post-termination income
Contracts can deprive employees of the right to any compensation other than severance following their termination. Without such language, courts can imply that an employee is entitled to bonuses, commissions, stock options and profit sharing, as if the employee had still been employed.
What should employees do? First, review any new contract with a lawyer and don’t be reluctant to renegotiate terms. Second, challenge the enforceability of these contracts where the facts present that argument. I have won in court by raising the inference that a contract was signed without proper consent — such findings are not exceptions.
• Daniel Lublin is an employment lawyer with Whitten & Lublin LLP.
