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 What Is an Employment Agreement?

An employment agreement is a mutual understanding between an employer and employee that outlines their employment relationship’s terms and conditions. While an employment agreement shares similarities with an employment contract, it is distinct in that it is legally binding and enforceable in court.

What Are the Contents of an Employment Agreement?

Employment agreements typically cover essential aspects of employment, such as pay rate, frequency of payment, hours of work, and benefits like medical insurance, life insurance, sick leave, and paid time off.

They may also include clauses addressing the following:

  • Termination: This clause outlines grounds for termination and any potential opportunities for re-application for the current position or another one.
  • Non-disclosure: This clause prohibits employees from disclosing the employer’s confidential information, such as trade secrets, intellectual property, or customer lists.
  • Non-compete: Non-compete clauses restrict employees from working for a competing business upon termination.
  • Dispute resolution: This clause details the process for resolving employment-related disputes, which may involve mediation or arbitration before resorting to litigation.

Employment agreements can be negotiated before an employee begins work or after they have started, and the terms of the agreement may be subject to renegotiation.

Does an Employment Agreement Have to Be in Writing?

Employment agreements can be either verbal or written. Written agreements are advantageous because they provide a clear reference for both dispute parties. Verbal agreements, on the other hand, can lead to disagreements about the terms due to a lack of concrete documentation.

What Prevents a Party From Violating an Employment Agreement?

Many jurisdictions have regulations that say employment contracts don’t have to include things like sick leave, vacation time, and paid time off (“fringe benefits”). According to these laws, if the agreement addresses these issues, the parties are obligated by what they agreed to. If the agreement stipulates that an employee is entitled to a vacation day after four weeks of work, the employer must grant the vacation day after the employee has worked for four weeks.

Employment discrimination on the basis of race, religion, gender, national origin, handicap, or age is prohibited by federal and state nondiscrimination laws. If an employer discriminates in an employment agreement, the employee has the right to submit a complaint to the state labor department and sue the employer in court.

Although employment agreements are not contracts, contract law principles forbid employers from paying no remuneration for labor accomplished. In this case, an employee may bring a lawsuit in court claiming that the employer has been unfairly benefited at the cost of the employee. When considering how much money to award the employee, the court will consider (among other things) the payment rate specified in the agreement.

How Is an Employment Contract Different From an Employment Agreement?

An employment contract can be either oral or written and employment contracts and employment agreements may cover similar terms and conditions. These include wage rate, job description and duties, bonuses, expense reimbursement, promotion, and demotion.

If the provisions of an employment contract are breached, they can be enforced, which means that one party can file a lawsuit in court to assert their rights under the contract. If a party breaches the contract, the other party may sue in court for the compensation they are owed based on the contract.

For instance, if a contract guarantees employment for a year but terminates the position within a month, the court may order the employer to pay the employee for the lost wages. However, courts will not force parties to maintain an unwanted relationship, so the court will not require the employer to rehire the employee for the remaining 11 months.

In a breach of contract case, the aggrieved party files a complaint with the court, and the other party can submit a response to the complaint. The court will then examine the evidence presented by both sides and make a decision. The outcome may include monetary damages, back pay, or injunctive relief, which is an order preventing a party from taking a specific action, such as attempting to enforce a non-compete clause.

How Can I Renegotiate an Employment Agreement?

Renegotiating an employment agreement involves revisiting the terms and conditions of your current agreement to make adjustments that better suit the needs of both the employee and the employer.

The following are some steps to help you renegotiate your employment agreement:

  1. Review your current agreement: Before initiating renegotiation, thoroughly review your existing employment agreement to understand its terms and conditions. Identify the areas you wish to modify, such as salary, working hours, job responsibilities, or benefits.
  2. Research and gather evidence: To support your renegotiation requests, gather relevant information and evidence. For example, if you’re seeking a salary increase, research market rates for similar positions in your industry, highlight your accomplishments and contributions to the company, or provide evidence of increased living expenses.
  3. Prepare your proposal: Develop a clear and concise proposal outlining the changes you want to see in the agreement. Be specific about the terms you want to renegotiate and provide justifications for each request. It’s essential to remain realistic and be prepared to compromise.
  4. Schedule a meeting: Request a meeting with your supervisor or HR representative to discuss your proposal. Give them sufficient notice and provide an overview of the topics you would like to discuss, which will give them time to review your proposal and prepare for the conversation.
  5. Present your case: Present your proposal professionally and confidently during the meeting. Be prepared to discuss your reasoning for each requested change and provide evidence to support your claims. Listen to the employer’s perspective, and be open to negotiation and compromise.
  6. Document the changes: If you and your employer agree on the proposed changes, document the new terms in writing. These changes may involve drafting a new employment agreement or amending the existing one. Both parties should review and sign the updated document to understand the new terms and conditions.
  7. Follow up: After renegotiation, maintain open communication with your employer to ensure the updated terms are implemented and adhered to. If any issues arise, address them promptly to maintain a healthy working relationship.

Remember that renegotiating an employment agreement may not always result in the desired outcome. Be prepared to face rejection or a counterproposal from your employer.

Additionally, consider seeking legal advice from an employment lawyer if you encounter challenges during the renegotiation process or need guidance on the legal implications of the changes.

Do I Need the Help of a Lawyer With an Employment Agreement or Contract?

You should consult an employment lawyer for advice about an employment agreement or contract. An experienced contract lawyer in your area can review the facts of your case and advise you on how to proceed. A lawyer can also represent you at mediation, arbitration, or court proceedings depending on your case.

LegalMatch is an online service connecting individuals and businesses with local attorneys who handle employment law. By filling out a brief form describing your legal issue, LegalMatch can match you with multiple qualified attorneys in your area who can provide you with legal guidance and representation for your employment agreement or contract.

Use LegalMatch to find a lawyer for your case today.

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