How to Spot Unfair Job Offer Contractual Terms, The Red Flags to Look For
A light, spacious room. Windows from top to bottom and a view to die for.
A huge conference room desk. Several smiling, sharply dressed people nod as a sign of appreciation.
You are there too, you are also smiling, and you are neatly dressed.
They slide a contract over, and you sign it right away.
You are hired!
They shake your hand, and the scene goes 10 years in the future where you work as a partner in the company…
Wait, what? The scene? Well, yes, because people are only hired like that in a movie. Real-life contract signing goes a little bit differently. And it should.
Signing a contract without meticulously examining it is irresponsible, and we daresay, even stupid.
“Why”, you ask?
It is a ‘standard’ contract; ‘everybody’ in the company has signed it?
However, not knowing exactly what you are signing can cause a large number of different problems along the way.
What happens when you inevitably get sick, when you get pregnant or when you decide to quit and get another job for whatever reason? Does your contract specify those and many other issues that may arise during your employment period?
If you do not look through your contract, chances are you will not have any idea how to quit or take a day off without retributions.
The thing is, everything that benefits the employer has surely been included in the contract, sadly, the employer’s benefits do not have to work to your best interest at all.
WHY DO THE PROBLEMS OCCUR?
First of all, most of us are not educated in or even familiar with employment laws. Furthermore, we probably do not even understand those big, big words.
In addition, the sentences are 2 miles long and the word order is confusing and with all the ‘notwitsandigs’ and ‘thereins’ who can blame you for giving up after a paragraph or two?
This is why it is tempting to just throw a glance on the parts that you are most interested in – usually the money part, ad disregard other things.
Oversights also happen due to the fact that people generally rely on common sense in life, and we do not think that specifying certain issues is at all necessary.
However, in a business surrounding common sense may not serve your cause.
A fun example of that is encountered in a fictional setting of The Big Bang Theory where, in a contract signed by both roommates, it states that one can enter the bathroom in case of emergency regardless of the previous occupancy.
However, although it is pretty straightforward what constitutes a bathroom emergency (when you use your common sense), the contract is not valid since it is not specified what constitutes a bathroom emergency in this situation.
Funny, right? In real-life, the consequences of following only your common sense can cost you more than fighting with your roommate.
Common sense dictates that maternity leave should be paid, but if you are a woman, and it slips your mind to check or ask for this clause in your contract and you sign it anyway, you do not have legal right to object to that later.
The next, most common thing is that parties agree on something verbally, say, during an interview, and the potential employee thinks that what is said is set in stone.
Every condition that you agreed upon should be presented to you in writing.
So, although you can be swayed by how laidback and relaxed the interview was with that “We’ll think of it when we get there” attitude, insist on having it on paper as well.
People tend to forget the thing they have said, and sometimes, unfortunately, they tend to deceive.
If you were told that a raise of 5% may come your way in six months’ time, make it official by putting it in the contract, otherwise, you may be left without it, purposefully or not.
In any case, your employee will be able to say that there is no legal reason for such an action.
Have you heard of the term ‘fresh consideration’?
It relates to accepting the changes made to your contract and its validity upon the action.
Do not put your name down on anything before revising it beforehand.
SHOULD YOU EVEN SIGN A CONTRACT?
After considering what mistakes you can make by signing something you do not completely understand, a question of whether you should even bother by signing a contract inevitably comes up.
And although it may seem that you would avoid all the conundrum of possibly making a mistake, and having to go through all that difficult legal jargon, it is still best to sign a contract than work without it.
The solution is to have a lawyer look at it before you sign it.
And it should not be your cousin you studies law, or your neighbor who is a divorce attorney.
You should seek advice from an employment lawyer; they are most qualified to spot loopholes, unfair clauses, and red flags.
After reviewing the contract with a lawyer, you should go back and negotiate the job offer.
It is your absolute right to ask for something other than what you were offered. It is actually expected of you. In this situation, make sure that what you are asking is within reason.
The extent to which you can negotiate depends mostly on how much they want you.
If you are applying for the job you have less room for negotiation than if you are courted by the company while you are still working elsewhere.
If you have been around the block once or twice, this may be obvious and familiar, but still, refresh your memory on the subject.
On the other hand, if you are looking for your first job and you finally get that job offer, slow down, think about it, and negotiate before accepting it in a proper way.
And in both cases remember, if the employer does not budge at all, you have the right to respectfully decline the offer.
You do not want to work for a company that has only its interest in mind.
Let us get on with what the most common employee oversights are.
1. Job Title
How can a job title be a red flag in a contract?
Well, it all goes back to your interview prior to the employer offering you the job.
Let’s say that, during the interview, you have agreed on getting the role of an Accounting Executive and when you are given your written contract to sign it says Accounting Manager.
Upon review, everything else but the job title is the same- salary, benefits, and so on.
Should you insist on correcting this seemingly small thing when the conditions you agreed upon are still there?
Do not let the HR convince you that you will be doing what you have signed up for and that that is just nomenclature.
The problems that could arise range from small nuisances to really important factors in your career’s development.
The employers may use this to pile up tasks and assignments that you didn’t say yes to, during your interview. If you ever decide to object, they can just defend themselves by saying that those are in fact your duties.
If you consider you qualify for a raise after a while, negotiating for it may prove to be difficult as they can try to save money by stating that “the amount of money you are looking for does not relate to your legal position”.
It can also harm your worth in the free market if you ever decide to leave the said job.
You can be given a title senior to what you have agreed, and they might say “It is just the paperwork we need, you will still do and be paid for the job we talked about “.
In this case, you can legally be held responsible for any potential mistakes and slips because they are your responsibility on paper. Or they can expect you to do the job you are not paid for.
In any case, insist on the job title remaining the same as you have previously agreed on, or renegotiate all the other conditions to keep yourself from future headache.
2. Mobility Clause
If you have the mobility clause in your contract and think that your employer will not try to relocate you if it fits the needs of the company, you are mistaken.
Signing the mobility clause may seem like a small thing to compromise on, especially if you are a young, adventurous individual and you do not think that having to relocate is that much of big deal.
Think about this. You are a provider for your family, 6 years from the moment you sign your contract and it really does not fit your personal needs to move across the country for work and leave your spouse and children, or make them go through the changes with you.
If you have signed the mobility clause, your legal obligation trump personal needs (and common sense, since you would be turning your entire life upside-down) and you end up having to relocate.
You can negotiate the mobility clause in terms of how far you may be asked to relocate.
Is it a company branch on the other side of the town?
That is not a big deal, and you can be rewarded for loyalty, and the company will appreciate it. You can include a one-time bonus or salary increase upon relocation.
On the other hand, if you refuse, this may lead to litigation, losing the job, paying a fine, or the employer may avoid paying redundancy.
3. Termination Clause
This is one of the most important points that you should pay attention to.
It deals with the ways and reasons for which the contract may not be valid anymore i.e. you quit or you get fired.
The reasons for firing someone have to be legally supported by the document. For example, if an employee is paid to clean the premises and he or she does not do the task, the employer has every legal right to fire the said employee.
On the other hand, if that employee has clearly stated work hours during a week e.g. weekends are free, the employer has no legal right to ask the employee to come to work on Sunday.
This is considered exploitation and changing the terms of agreement without fresh consideration, which means that any change to the initial contract (in terms of salary, work hours, etc.) has to be reviewed by both parties and signed again.
Another thing to consider regarding the termination clause is the notice period.
The first important thing to ask for is that the notice period that you have to give to your employer is the same length as the one they have to give to you.
A long notice period may work to your advantage because you will have a salary coming your way while you are on notice.
On the other hand it can still work against you because some companies will not wait 3 months for a candidate.
Also, it happens that a bonus you worked hard for may not come your way if the notice period coincides with the bonus period.
4. Restrictive Covenants
Restrictive covenants like NCC (Non-compete Clause) and NDA (Non-disclosure Agreement) have become a standard recently.
The employer’s concern is that they will lose the advantage over the competition so they include NCCs and NDAs in the contact.
It is perfectly reasonable form the employer’s standpoint – they want to keep the inside information in the company and they do not want their employees to go work for a competing company.
Why is this problem for you then? The NDA is pretty straightforward- everything you do during your contract and all the information you get must not be disclosed to a third party.
If you happen to disclose something you can be sued and the employer will have a clear case since you signed the NDA.
Even if it does not go as far as to the court, if you want to start your own business in the same field, you will not be able to use information that you have gathered working for the company, and this may thwart your professional success.
But if your case does happen to end up in court, know how your friends in the process are and what the role of your litigation attorney is.
The NCCs work differently. If you sign the NCC clause in your contract you are agreeing that you will not work for a company that is your current company’s direct competition (think Coca-Cola and Pepsi), or that you will not launch your own job in the competitive field.
Nobody wants to teach you the tricks of the trade only to have you use the tricks against them.
The usual room for negotiation here is the period of time in which you will not be able to work in the same field.
Preventing you from permanently getting a job with the competition is unreasonable, so ask or the contract to specify the timeframe – it usually goes from 6 months to 5 years depending on the area of work.
You can try to be released from this clause if your next job is geographically far away, say you are moving from the USA to Italy, or if you are changing the field of work completely.
What is most important with this is to be aware that the contract has this clause to begin with.
5. Probationary Period
In many contracts, there is a Probationary period clause. A problem may arise due to a loophole that is more common than you think.
Many of the contracts do not have a clearly defined probationary period.
Usually it is from a week to up to three months depending on the job (a hairdresser can have a one week probationary period but an accountant on probation may need more time to prove himself).
So, the first thing to see is if the period is well-determined and reasonable.
Another thing worth considering is the reimbursement for the determined period.
Working a month without pay is difficult, but working three months (or more) without it is unreasonable.
Negotiate a payment for the duration of the probation.
If you do get the job offer after the probationary period, it is time to negotiate again. In this case you should negotiate all the terms of the agreement, not just the salary.
This is because the employer may make changes to your work hours, duties or responsibilities.
Do not just assume that everything will stay the same.
After all, you will have a better idea of what the job entails and will be better prepared to negotiate the terms that will comply with your needs.
6. Work for Hire
This clause may seem confusing since a layman would think that it just means that you are hired to do the job and that it only relates to the commission workers.
However, the ‘Work for hire’ clause means something else.
It means that all the work you are doing for your employer during the contractual period is, in fact, proprietary to the said employer.
It is pretty straightforward that a company can use the brand design years after you have created the design, and in those cases, it is okay to sign that clause.
On the other hand, if you are a photographer working for a magazine, who has the copyright for the photos after the commission, you or the magazine, or both?
This is something you should definitely negotiate.
This is also applicable to non-commission workers.
Let’s say that you are a TA at a University, and during your employment, you have an idea that could be patented. Who has the right to your idea, you or the University?
If you sign this clause, all innovations and ideas belong to the University.
The companies may be willing to negotiate in favor of the shared copyright and ownership.
OTHER THINGS TO CONSIDER
- Look for fine print; this is where a clause that does not work to your advantage may hide itself.
- Beware of long contracts (15-20 pages), simple and clear contracts are the ones worth signing, and those lengthy ones are probably designed to confuse you.
- Automatic renewal – Some companies employ this tactic to avoid paperwork. It is not such a bad clause to agree on so if you cannot avoid it, at least make sure that you know it exists so that you will be able to make timely decisions.
- Pressuring you to sign the contract right away is the sign of some fishy business. Insist on taking a day or two to revise it, anyway.
- Be aware that an employer may withdraw the offer if you refuse to accept some clauses, just as you can decline the offer if you do not find it satisfactory.
It is completely reasonable and smart to read through your contract or agreement carefully.
After all, a contract is a legally binding document and you need to be completely happy with what you sign up for, hopefully for a longer period.
This goes for all of you freelancers out there.
Although your contracts encompass a fairly shorter amount of time, take care of your rights as well as duties during the contractual period.
Hopefully, this article will help give you pointers when it comes to contract red flags that may cause you problems somewhere along the line.
Do not, however, stake everything solely on this text. If you think that you are in over your head, do not hesitate to ask for more time to revise the document and hire a lawyer to help you.
Legal advice is not cheap but it pays out in the long run.
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