Negotiating an employment contract – tips from an employment lawyer
By: Amanda Pizzardi
Securing a new job is often an exciting experience. Many employees believe that the hard part is over after they have a contract in hand and sign without having it reviewed by a lawyer. Others believe they have no choice but to accept the contract as it is written.
Employment contracts set out important information about your job, working conditions, rights and obligations, and a good employment contract will provide certainty and predictability for both parties. If you breach the obligations set out in your employment contract, there may be legal consequences. It is important for employees to understand the terms of their employment contract before their start date and, if they are not satisfied with the terms, to negotiate a better agreement.
An employment lawyer should review your agreement. A good lawyer can efficiently review your contract, identify risks and potential problems, suggest improvements, and negotiate improved terms in appropriate circumstances. Many of our clients find it easier to have a lawyer raise issues about termination clauses, dispute resolution, and compensation. Using a lawyer allows the client to preserve their relationship with their new employer while addressing any gaps or problems with the employment contract.
Here are some tips to keep in mind during the negotiation process:
1. Prioritize your objectives: Identify your priorities and look at what is being offered holistically. A higher salary might mean you can live with a less competitive benefits plan. Flexible working hours and additional vacation days may make a lower salary acceptable. Understand the trade-offs you are and are not willing to make and keep your eye on the total package.
2. Know your worth: Research and understand industry standards for your role and level of experience. Be prepared to provide evidence of your skills, experience, and comparable compensation figures to support any request for changes to the terms of the contract. Knowing your worth and having evidence to back it up will strengthen your negotiation position.
3. Understand the terms and conditions: Carefully read through the entire contract, including compensation, benefits, and job responsibilities. Take note of any ambiguous or unfavorable clauses that may need further clarification or negotiation. In particular, you should look for:
a. terms relating to compensation – will there be other forms of compensation in addition to a base salary, such as commissions or bonuses? How will those figures be calculated, and what amount of your total compensation will be subject to your employer’s discretion? What will happen to your deferred compensation if you resign or your employment is terminated? Having a clear understanding at the outset of what you can expect as a total compensation figure is imperative.
b. non-competition and non-solicitation provisions – even though recent changes to the Employment Standards Act, 2000 have prohibited employers from entering into non-compete agreements, many are attempting to circumvent the legislation by crafting contractual provisions that mimic the effect of non-compete clauses without expressly violating the legislation. Check out our previous blog posts here and here for further information on this topic and an idea of what to look out for.
c. confidentiality requirements– you will likely come across confidential or highly sensitive information by virtue of working for your employer that are not otherwise in the public domain. It is imperative you and your new employer understand what is confidential and what is not, especially since the consequences of a breach can be significant.
d. terms relating to intellectual property – it is common for employers to expect that any work product created by employees during the course of their employment becomes the property of the employer. The scope of what is captured may vary depending on the industry of the employer, but in any event, employees must be familiar with these conditions as it often prevents them from using that work outside of the scope of their employment.
e. terms relating to termination of employment – how and when will the contract end? Upon a without cause dismissal for example, how much notice (or pay in lieu thereof) can the employee expect to receive? How much notice will you be expected to give your employer upon your resignation?
4. Be professional and respectful: Maintaining a professional and respectful tone during negotiations is crucial. Avoid using aggressive or confrontational language, as it may hinder the negotiation process. Instead, communicate your points clearly, provide evidence to support your arguments, and be open to constructive discussions. Building a positive rapport with your employer or their representative can foster a more successful negotiation outcome. In certain circumstances it may be beneficial to have a lawyer negotiate terms on your behalf.
5. Get everything in writing: Once you have reached an agreement, make sure to get all the agreed-upon terms in writing. A written contract protects both parties and ensures that there is a clear understanding of the agreed-upon terms.
It’s always a good idea to seek legal advice from an experienced employment lawyer. A quick review of a contract can reveal and address issues that might otherwise lead to litigation or a breakdown of the employee/employer relationship.
The lawyers at Mathers McHenry & Co. can provide valuable insights and help you negotiate terms that protect your interests and align with your career goals.