Forming new employment relationships is not something that people necessarily do lightly. Whether you are an employer hiring a new employee or an employee deciding to take a new job, these relationships can have a dramatic impact on a person's livelihood. For this reason, it is not unusual for there to be some sort of contract involved to protect employers and/or employees.
While there are many different types of contracts used between employers and employees, there are a few agreements and clauses that may be more common than others. Having a basic understanding of these terms should hopefully help you recognize why they are important.
- Non-compete agreements: Any person who is bound by a non-compete clause in a contract is restricted from pursuing certain employment opportunities when the relationship between signing parties ends. This could mean an employee is prohibited from working at certain companies, in certain regions or in specific capacities that the initial employer deems a threat to business.
- Confidentiality clauses: These clauses protect information that is determined to be sensitive and specific to the company. Employees who sign a confidentiality agreement are prohibited from sharing any information considered confidential during or after their employment. Disclosing protecting information could land an employee in serious trouble.
- Arbitration requirements: Too often, employees assume that they will take a dispute to court should one arise. However, many realize too late that they have agreed to an arbitration clause in an employment contract. Agreeing to this means that any dispute that arises will be resolved through arbitration, not litigation. This can significantly affect if and how disputes may be addressed.
These are just a few of the common clauses that people may see in an employment agreement. In many cases, these are in place to protect an employer and set boundaries, but they can also serve as a way to clearly establish the rules with which all parties will need to comply.
Before you sign or enforce any employment agreement, you may want to seriously consider discussing the terms of a document with an attorney. Having a thorough understanding of what you are agreeing to can be crucial in the future if and when a dispute arises.