Listen to this Article
Voiced by Amazon Polly

When Should You Ask for an Employment Contract?

To ensure the terms and conditions of your employment are clear and fair, you should ask for an employment contract before you have accepted a position. This will provide you with an opportunity to negotiate your contract before the start of your employment when your bargaining power decreases.

What should I put in an employment contract?

An employment contract should clearly state the terms and conditions of your employment, including your: title, employment classification (employee or contractor), job responsibilities, compensation, health benefits, retirement benefits, company stock options, sick time, vacation time, and the number of hours you are expected to work per week. It should also specify the reasons for which you can be terminated and the amount of notice required for your termination. Check that your employment contract does not include a provision about mandatory arbitration. Arbitration is an extremely employer-friendly dispute resolution mechanism that requires employees to resolve matters outside of the court system before an arbitrator paid for by the employer.

What should I look for in an employment contract?

Always check if your employment contract includes an arbitration agreement, and if it does, try to negotiate it out of your contract. For a few years, California’s AB 51 made it illegal for employers to require an employee to sign an arbitration agreement as a condition of employment. The Ninth Circuit recently found, however, that AB 51 is preempted by the Federal Arbitration Act therefore allowing employers to require arbitration. But you can, and should, still try to negotiate it out of your contract.

Also look to see if there is a non-compete clause or confidentiality agreement, both of which are employer-friendly provisions that can limit your future job opportunities. Non-compete clauses are not permitted in California. Try to negotiate these provisions to be as least restrictive against you as possible.

Who can help me review a contract?

If you need assistance negotiating your employment contract, contact us today for a free consultation.

What is the purpose of an employment contract?

The purpose of an employment contract is to clarify the terms and conditions of your employment, including your hiring and termination. Employers try to implement other provisions into contracts like non-compete clauses, arbitration agreements and confidentiality agreements, which you should try to negotiate out of your contract because they can harm your ability to sue your employer or find other employment.

What does an employment contract lawyer do?

An employment contract attorney will help you draft, review or negotiate your employment contract. Without an attorney, contracts can become tricky and complicated to understand, which can leave you in a situation you don’t want to be in.

Are employment contracts always in writing?

No. California assumes that all employment relationships involve a contract, whether it is verbal or in writing. However, verbal contracts leave a lot of room for error so it is always best to get the agreement in writing.

Is it possible for an employee to negotiate a better employment contract?

Yes, and it is something you should always try to do, particularly when there are unfavorable conditions included like an arbitration agreement or non-compete clause. Employers might not be willing to negotiate but you should try. You are welcome to call our firm and we would be happy to consult with you.

Is there a difference between a service contract and an employment contract?

Yes. In an employment contract, one party is typically a company or organization and the other is a regular employee where the terms and conditions of the employment are laid out (see above). A service contract is typically between you and a business or client where the services you intend to provide are outlined. For example, a contractor and a homeowner might utilize a service contract.