Although not all employees will have a written employment contract, these written agreements do have many advantages. A written employment contract can help to ensure that the employer and the employee have a common understanding of important aspects of the employment relationship, such as:
- How long the job will last;
- What the compensation will be;
- What benefits the employee will receive;
- How the employee will be evaluated;
- How disputes will be resolved;
- What grounds for termination will be; and
- Any limitations on the employee’s ability to compete, either during the employment or once they leave.
An employment agreement can be enforced by either party, just like any other contract. The written words of the agreement can have a significant and long-lasting effect. This is why it is important to have an experienced attorney review your employment contract.
What Rights Can an Employment Contract Take Away?
Three common rights that an employee can sign away in an employment contract are the ability to compete, the right to enforce verbal promises, and the right to bring a lawsuit against the employer.
Ability to Compete
Employment contracts often include a non-compete clause. This is a clause that will prevent the employee from working for a competitor after the employment relationship is terminated. In certain cases, a non-compete agreement can be detrimental to the employee’s livelihood by preventing them from finding a new job in the same industry. Colorado law allows non-compete agreements when they are part of a contract:
- For the purchase and sale of a business or assets of a business;
- For the protection of trade secrets;
- Providing for the recovery of expense of training or educating an employee who has been with an employer for less than two years; or
- With executive and management personnel and their professional staff ((Co. Rev. Stat. § 8-2-113).
In addition, these non-compete agreements must be reasonable in their scope in order to be enforceable.
Right to Bring a Lawsuit
An employment agreement may provide that any dispute between the employer and the employee must proceed through arbitration, rather than through litigation (a lawsuit). In some cases, this may limit the employee’s ability to recover damages for breach of the contract.
Right to Enforce Verbal Promises
Written employment contracts may, and often do, have a clause that states that the written agreement cannot be modified orally. This places the employee in a disadvantageous situation when the employer makes an oral promise. For example, the employer may promise that the employee “will always have a job here.” However, if the written employment agreement provides that the job will only last for a finite period of time which cannot be modified orally, the employee cannot and should not rely on this promise.
How Can An Attorney Help?
Legal language in a contract, sometimes called “legalese,” can often be hard to understand. When asked, an employer may respond by simply saying that the language is standard. However, it is important to understand how the employment contract could affect you. An attorney can:
- Review the written language of the contract;
- Explain the meaning of language to you;
- Listen to the details of your particular situation;
- Explain how the language could affect you; and
- Offer you advice on what to do.
Have an Attorney Review Your Employment Contract
If you are starting a new job and have been asked to sign an employment contract, it is important to have an attorney review the language so that you are aware of how what you are signing could impact you. At HKM Employment Attorneys LLP, we have experience with employment agreements, and can help by advising you about any hidden terms or legalese in your agreement. We also assist employers who are looking to write an employment agreement or revise an outdated agreement.
If you have questions about an employment agreement, call HKM Employment Attorneys LLP at 303-991-3075 or contact us online today.