Some Arizona companies require their employees to sign a contract prior to or even after becoming employed. Often a person will sign an employment contract without reading it or having it reviewed by legal counsel, but this can put them at a distinct disadvantage if they leave the company or become dissatisfied with their employer’s treatment. To protect yourself from an employment contract that may not in your best interest, it is important to understand what a contract is, the elements that are generally found in it and what you should be aware of before signing it.
If you are considering signing an employment contract or need one reviewed because of a potential breach, contact an experienced employment attorney.
What is an employment contract?
An employment contract is a written agreement between you and your employer that contains legal language, directives and definitions tailored to the position you will fill and the industry you work in. For example, an employment contract between a doctor and a hospital is going to be different from a contract between an executive and a finance company.
Employment contracts are typically used for high paying jobs like attorneys, doctors, scientists, executive and managers as well as for many sales positions. Companies use them to protect themselves if a problem arises and to give them the ability to hold the employee accountable for a breach that may threaten their business.
Elements of an employment contract
The elements of an employment contract may include:
- Salary and benefits
- Severance provisions
- Non-compete agreement
- Length of employment
- Definition of the position and responsibilities
It is important to carefully review the details of each element in the contract. For example, the portion on salary and benefits should have clear language regarding bonuses, raises, vacation time, sick leave, holidays, insurance and stock options.
Terms to watch out for
It is especially important to understand the actions the employer may take when terms of the employment agreement are broken by the employee. For example, if the employment contract contains a non-disclosure agreement, you may not divulge the employer’s proprietary information while working for the employer or afterward. Doing so may subject you to liability for legal damages. A non-compete agreement may limit your ability to work within a specific geographic area if you leave the company or prohibit you from doing the type of work your are trained and experienced in for a limited time.
Employment contracts may offer good terms to an employee, but it is essential to understand how what you agree to may affect your future if something changes or things don’t work out. A review by an employment lawyer is your best protection.