Signing an employment contract can feel like winning the lottery. It means that you have more job security and likely more job perks, than most people employed in Texas. It is legal for individuals and companies to sign legally binding agreements about almost anything, including employment, as long as the provisions of the contract do not entail violations of existing laws. An employment contract is not a cloak of invincibility, however. Depending on how your contract is worded, it might not give you the protections you expect it to provide. Contract disputes with your employer can be stressful and costly. Therefore, it is in your interest to have the Houston employment contract lawyers at HKM Employment Attorneys, LLP, review your employment contract before you sign it.
What are Your Rights if You Do Not Have an Employment Contract?
Most employees in Texas do not have employment contracts, and this is perfectly legal. Texas is an at-will employment state, which means that it permits companies and workers to engage in an at-will employment relationship. In this kind of employment relationship, the employer is free to quit at any time they choose. The law does not require employees hired on an at-will basis to give two weeks’ notice when they quit; this is a convention of etiquette rather than an official rule. If you simply stop showing up to work, then your employer still has to pay you for the time you worked and provide tax forms at the end of the year. Likewise, in an at-will employment relationship, the employer has the right to terminate the employment relationship for almost any reason, as long as the termination of the employment relationship is not a matter of discrimination or employer retaliation. In most workplaces with at-will employment, the company has an employee handbook that outlines the rights and responsibilities of employees.
Even if the employee handbook does not explicitly state this, all employees have the right to be paid at least the minimum wage, which is $7.25 per hour for Texas and $14.00 per hour for Houston. Employees who get paid an hourly wage have the right to overtime pay in weeks when they work more than 40 hours. All employees have the right to engage in legally protected activities, such as requesting an unpaid family or medical leave, filing a worker’s compensation claim after a work injury, and reporting misconduct by their employers to law enforcement or regulatory agencies.
Elements of an Employment Contract
Most employment contracts are several pages long. When you are excited to start a new job that pays better than any other job you have previously held, it is easy to skip over the many paragraphs of what appear to be legal boilerplate and just focus on the parts that are about your awesome job title, the money you will make, and all the benefits and freebies that your job will give you. This would be a mistake, however. You should not sign an employment contract the minute the employer gives it to you. You should ask for at least 24 hours so you can read the contract carefully. If possible, you should meet with an employment contracts lawyer before you decide to sign. Remember that you have the right to negotiate about one or more provisions of the contract.
These are some of the topics that the various provisions of an employment contract will cover:
- The names of the parties, namely you, the employee, and the employer
- The job duties
- The start and end date of the contractual relationship
- The employee’s salary and benefits
- Whether the contract is renewable and, if so, how to renew it
- Procedures for terminating the contractual relationship early
- Procedures for resolving disputes related to the contract
If a contract dispute arises, the boring details of the contract matter more than the bold text about your position title and your salary.
Employment Contract Red Flags
Business relationships tend to begin in a burst of optimism, but even though they are legally enforceable, they tend to refer to an idealized form of reality. Especially with small businesses, employers sometimes write employment contracts hastily, even downloading sample contracts and just filling in the names and dates to pertain to the present employment relationship. Sometimes, though, companies know exactly what they are doing when the word employment contracts in ways that make it difficult for the employee to prevail in a contract dispute. These are some red flags to look for in an employment contract:
- Non-compete clauses – These restrict the employee from working for the employer’s direct competitors for a set period after the employment relationship ends. At their worst, they are “you’ll never work in this town again” clauses. President Biden issued an executive order prohibiting overly restrictive non-compete clauses.
- Mandatory arbitration – All contracts should include provisions about how to resolve contractual disputes. The employee is in a stronger position is the contract allows the parties to resolve their disputes in court, instead of requiring arbitration.
- No force majeure clauses – A force majeure event is a major disruption, such as a war or natural disaster, that prevents one or both parties from fulfilling their contractual obligations. If a force majeure event is the reason that you were unable to fulfill your contractual obligations, the force majeure clause in your contract protects you from suing you for breach of contract.
You can save lots of time and money if, before you sign the employment contract, you ask your employer to modify the non-compete provisions and the dispute resolution provisions to something that is more favorable to you. Therefore, you have everything to gain by reviewing your contract with an employment lawyer before you accept a job offer.
Contact HKM Employment Attorneys, LLP, About Employment Contracts
The Houston employment lawyers at HKM Employment Attorneys, LLP, can help you resolve disputes over your employment contract. Contact the employment lawyers at HKM Employment Attorneys, LLP, in Houston, Texas, to set up a consultation.