What is an Employment Contract?
An employment contract is an agreement between you and your employer that describes some of your rights and obligations as an employee. It can be written or verbal. It can be a formal written contract, or an informal offer letter. In fact, sometimes a company’s employee handbook or other personnel policy can be an enforceable contract.
Employment contracts typically discuss your salary and benefits and outline the basis for any commissions or bonuses you might be eligible to earn. Sometimes they also guarantee your job for a period of time or limit the reasons why you can be fired.
Many employment contracts contain non-compete agreements that limit your right to work for a competitor after you leave your job. Others include severance agreements that, if certain circumstances occur or conditions are met, would require your employer to pay you money after you stop working for the company. For example, it is fairly common for employment contracts to guarantee severance for employees whose jobs are eliminated in a mass layoff or a reduction in force.
Unwritten Contracts Can Be Enforceable
While it usually is a good idea to put your employment agreement in writing, a contract does not necessarily have to be written for it to be enforceable. Rather, oral agreements are sometimes enforceable in both New Jersey and New York. So, for example, if your employer promises you a certain salary and benefits, once you work to earn that compensation your company is required to pay you on that basis.
If your company refuses to pay you based on the salary you agreed upon, it would be a breach of your contract. Unfortunately, that happens all too often. Luckily, the employment lawyers at Rabner Allcorn Baumgart & Ben-Asher are trained to help you enforce your contractual rights.
Guaranteed “Term of Years” Employment Contracts
If you have a guaranteed term contract, it could be a breach if your employer fires you before the term is over. For example, if you have a one year employment agreement, but you are fired for no good reason after only three months, you may be entitled to be paid for the nine months remaining on your contract. You also might have a legal claim if you are fired in violation of a provision in your agreement that limits the reasons why you can be fired, such as a provision that you can be fired only for “just cause” or “good cause.”
Restrictive Covenants in Employment Contracts
Many employment contracts include restrictive covenants such as non-compete, non-solicitation, non-disclosure, trade secret and arbitration clauses. Not only are these provisions typically complicated and confusing, but they also can become critical once you decide to move on to another job. Whenever possible it is important to make sure you understand and agree with these restrictions before you accept a job offer. In some situations, you might be able to negotiate better terms, or even remove problematic provisions. In other instances, it might not be worth accepting a job offer if it is going to make it extremely difficult, if not impossible, to find another job in your field or industry in the future.
Even if you already have signed an agreement with a restrictive covenant or another problematic term, you should consider contacting an employment lawyer to make sure you understand your legal rights and obligations.
Understanding Your Employment Contract
Our attorneys are experienced at reviewing, interpreting and explaining employment contracts in terms that make sense to you. It generally is a good idea to have an attorney review your contract before you accept a new job, or help you negotiate an employment contract. It also can be important to discuss your current employment agreement with a lawyer if you are considering accepting a new job. Similarly, we can help you understand your rights under your current employment contract if you are having a dispute with your employer, or if you simply want to understand your rights and obligations.
We invite you to call us at (973) 744-4000 or contact us online to schedule an appointment to review your New Jersey or New York employment contract, non-compete agreement or severance agreement.