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Red Flags to Watch for in Negotiating Employment Contracts

When an employer asks you to sign a contract as a condition of giving you the job, it’s essential to proceed with caution. This document will govern your employment relationship and outline your rights and responsibilities, so understanding every clause is critical.

Begin by scrutinizing the compensation and benefits section to ensure it aligns with what was promised during the interview process. Pay close attention to the details of your salary, bonuses, and benefits such as health insurance, retirement plans, and paid time off. Ensure these terms are clearly defined and leave no room for misinterpretation.

The termination clause is another critical section to examine. It should outline the conditions under which you or the employer can end the employment relationship. Look for any language that appears overly restrictive or punitive, such as clauses that allow the employer to terminate you without cause or with minimal notice. Similarly, scrutinize any provisions related to severance pay and whether you are entitled to it under various circumstances.

The Federal Trade Commission (FTC) has imposed a ban on non-compete agreements between employers and employees, and your contract must comply with this new regulation. Non-compete clauses, which prevent you from working for competitors or starting a similar business for a certain period after leaving the company, can significantly restrict your future employment opportunities. The FTC’s decision is designed to protect employees’ right to seek new employment freely, so make sure your contract does not include any such restrictive covenants.

Other red flags may indicate one-sided or unfair provisions. For instance, any confidentiality agreements should protect both your and the employer’s interests without being overly broad or indefinite. Intellectual property clauses should fairly delineate ownership of work produced during your employment. Additionally, ensure that the contract does not include mandatory arbitration clauses that require you to resolve disputes through arbitration rather than through the court system, as this can sometimes limit your legal recourse.

Given the complexity and potential implications of employment contracts, consulting a dedicated employment law attorney is highly advisable. An experienced employment contracts attorney can help you understand the legal phrasing, identify any unfavorable terms and negotiate better ones. They can provide insight into your rights and obligations under the contract, ensuring you are fully informed before signing.

The attorneys at Deutsch Atkins & Kleinfeldt, P.C. want to be your partner in contract negotiations. We serve contractual employees in Northern New Jersey, including Hudson, Morris, Passaic and Bergen counties, and New York City. Call us at 551-245-8894 or contact us online to schedule an initial consultation.

Neil  H.  Deutsch Attorney Photo
Neil H. Deutsch
Retired

Neil H. Deutsch has been practicing law for over 35 years and is known as a skilled negotiator in employment and discrimination law. He believes in a bottom-line approach of risk analysis and cost effectiveness for his clients. "Case evaluation is something we take seriously," says Mr. Deutsch who seeks top net dollar for his…

Bruce  L.  Atkins Attorney Photo
Bruce L. Atkins
Senior Partner

Bruce L. Atkins is the Senior Managing Partner at Deutsch Atkins & Kleinfeldt P.C., a prominent plaintiff employment law firm in the tri-state area. Mr. Atkins believes employees’ rights should be aggressively pursued when they’ve been wrongfully dealt with by their employers. He brings this philosophy to his practice when considering each case and its…

Adam  J.  Kleinfeldt Attorney Photo
Adam J. Kleinfeldt
Partner

Adam J. Kleinfeldt joined Deutsch Atkins & Kleinfeldt, P.C. in March of 2015.  He primarily represents individuals in employment litigation such as discrimination, retaliation and whistle blowing matters. He has extensive experience in all phases of the litigation process. Adam has obtained significant results for his clients, including a $525,000 jury verdict in a sexual…

Debra M. McGarvey Attorney Photo
Debra M. McGarvey
Partner

Debra M. McGarvey joined Deutsch Atkins & Kleinfeldt, P.C. in December 2019. She has extensive experience defending employees and employers in state and federal court in employment litigation matters. She has represented clients on various issues arising out of the New Jersey Law Against Discrimination (NJLAD), the New Jersey Conscientious Employee Protection Act (CEPA), the…

Carly Skarbnik Meredith Attorney Photo
Carly Skarbnik Meredith
Partner

Carly Skarbnik Meredith, Esq. is a Partner at the firm. Carly has focused her career exclusively in the field of employment law. She has a plethora of experience representing both employees and employers with their employment issues, needs, and concerns. She believes representing both employees and employers has made her an extremely well-rounded client advocate.…

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