Many organizations make job offers contingent on the signing of an employment agreement. Few will look favorably on an applicant having an attorney review it and propose changes. The exception can be a company actively recruiting a high-powered executive that needs to be lured away from another company. Unfortunately the vast majority of us aren’t that fortunate and often have to live with the agreement, even though it's slanted in the employer’s favor. Below are the major clauses or conditions often seen in employment agreements.
Nondisclosure Agreement (NDA) - Spells out the terms and conditions under which one party agrees not to disclose confidential information shared by another party. It is basically to protect the employer’s intellectual property and proprietary information. A good example would be trade secrets such as information about research and development activities or formulas.
An NDA details the potential remedies the disclosing party may seek if the receiving party breaches the NDA. Example: "The Receiving Party acknowledges that any breach of this Agreement may result in irreparable harm to the Disclosing Party, and the Disclosing Party shall be entitled to seek injunctive relief, in addition to any other legal remedies."
Non-Compete Agreement (NCA) - Typically contains provisions that restrict an employee or contractor from competing with the employer for a certain period of time and within a specific geographic area after their employment or contract ends. "The purpose of this Agreement is to protect the Employer’s legitimate business interests, including its goodwill and customer relationships” and “This Agreement applies within a [X]-mile radius of any location where the Employer does business during the term of Employee’s employment."
An NCA defines certain situations or types of employment that may not fall under the restrictions, such as if the employee moves to a different industry or location. "This non-compete restriction shall not apply if Employee is terminated without cause by the Employer."
Beware, in some cases the severance offered requires you to abide by the NCA. Accept the money and you’re restricting your ability to work in your chosen field for a competitor or launch a competing business.
Covenant Not to Recruit - This provision, sometimes called a Non-Solicitation Agreement or Non-Recruitment Clause, restricts an employee from recruiting or attempting to hire the employer’s employees or contractors after their employment ends. These clauses are designed to prevent the poaching of key personnel. "Employee agrees that for a period of [X months/years] following the termination of Employee's employment, Employee will not directly or indirectly solicit, hire, or attempt to recruit any current employees or independent contractors of the Employer."
It may be restricted to a specific region, state, or country and will state the length of time the employee is prohibited from recruiting the employer’s employees or contractors after their employment ends.
Conclusion - If it seems like the deck is overwhelming stacked in the employer’s favor that’s because it is. And many of them have little or no regard for their most important asset, their people. Yet the C-suite MBAs wonder why “employee engagement” ratings are in the toilet and employee turnover is so high. These well-educated morons can’t see that the ROI of taking care of your people is much better than treating them like indentured servants or pawns on chess board subject to layoffs and RIFs when the new CEO wants to show the Board they are “controlling costs” while the true intent is growing their bonuses and value of their stock options.
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