Employment Contracts in Massachusetts
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Many employees in Massachusetts work without employment contracts and are considered at will employees. If you are offered a written contract, the terms of the contract will govern your employment relationship. It is important for you to understand the key terms. These terms can affect your substantive rights. They also can limit your options if you later have legal claims against your employer, if they include a mandatory arbitration clause.
What is an Employment ContractA true employment agreement will be signed by both the employer and employee. It should also contain terms and conditions specific to that employee. An employee handbook in most cases is not considered a contract.
A signed offer letter can serve as a contract, particularly if it specifies job duties, compensation and benefits. Many offer letters, however, include specific language giving the employer the right to modify those terms. Specific promises made to you by the employer are not the same as an employment contract. Under some circumstances, however, those promises may be enforced if you reasonably relied on them. |
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Employment Contract: Non Disclosure Provisions
It is common in employment agreements to include a provision that requires you to keep company information confidential. These are often called non disclosure agreements or NDAs.
These provisions are generally enforceable as written. Even if you do not see this provision, you need to be careful with your employer's information. Employees have a common law duty not to disclose or misuse an employer's trade secrets.
These provisions are generally enforceable as written. Even if you do not see this provision, you need to be careful with your employer's information. Employees have a common law duty not to disclose or misuse an employer's trade secrets.
Employment Contract: Termination Provisions
Some employee contracts do not have a specified time period of employment or conditions on termination. In that case, the relationship is still considered "at will." That means you can probably still be terminated for any lawful reason. You can, however, still enforce other terms that are in the contract.
Other contracts may specify a term of employment. Typically these contracts also define when and how the relationship can be terminated before the end of the term.
These termination provisions are important for you to understand going into the employment relationship. Many contracts allow the employer to terminate for defined cause but also allow "no fault" termination with payment of some severance. If the employer later wants to terminate you, this gives a financial incentive for the employer to find cause.
Things to look for in the termination provision include how specific the definition of "cause" is. Specifically you should look for undefined or subjective reasons. An example would be a catch-all "poor performance" criteria.
You should also look to see if the contract gives you a "right to cure." A right to cure means you have the opportunity to resolve any problems before being terminated without pay.
Other contracts may specify a term of employment. Typically these contracts also define when and how the relationship can be terminated before the end of the term.
These termination provisions are important for you to understand going into the employment relationship. Many contracts allow the employer to terminate for defined cause but also allow "no fault" termination with payment of some severance. If the employer later wants to terminate you, this gives a financial incentive for the employer to find cause.
Things to look for in the termination provision include how specific the definition of "cause" is. Specifically you should look for undefined or subjective reasons. An example would be a catch-all "poor performance" criteria.
You should also look to see if the contract gives you a "right to cure." A right to cure means you have the opportunity to resolve any problems before being terminated without pay.
Employment Contracts: Work for Hire Clause
You may see a section in your agreement called "intellectual property," "assignment of inventions," or "work for hire." These are most common in jobs that require you to create things for your employer. That could be processes, products, or creative content.
This provision guarantees that the company owns the intellectual property in the work they pay you to do. These are common, enforceable, and in most cases perfectly reasonable.
You should check to see what the work for hire provision covers. You may be working on a book in off hours, or engaging in other unrelated side jobs. In that case, you want to make sure you are not giving those rights to your employer.
In most cases employers are willing to adjust this language. This is especially the case if your outside activities don't compete or conflict with their business.
Another thing to check for is whether this provision requires you to disclose existing intellectual property. If it does, you want to be careful to identify anything you need to maintain ownership over.
This provision guarantees that the company owns the intellectual property in the work they pay you to do. These are common, enforceable, and in most cases perfectly reasonable.
You should check to see what the work for hire provision covers. You may be working on a book in off hours, or engaging in other unrelated side jobs. In that case, you want to make sure you are not giving those rights to your employer.
In most cases employers are willing to adjust this language. This is especially the case if your outside activities don't compete or conflict with their business.
Another thing to check for is whether this provision requires you to disclose existing intellectual property. If it does, you want to be careful to identify anything you need to maintain ownership over.
Employment Contracts: Non Solicit and Non Compete Clause
A non compete provision restricts your ability to work for a competitor during and after employment. This provision is subject to new rules about non compete agreements.
A non solicit provision typically restricts your ability to solicit customers and/or employees during and after employment. These provisions are generally not subject to the new Massachusetts non compete law.
If there is a non compete provision in your agreement, your employer should give you ten days to consider it. This is an important opportunity to get legal advice about the non compete. It is also a good opportunity to get advice about other aspects of your agreement.
With respect to the non solicitation provision, it is important to understand how broadly it is worded. If it simply says you can't solicit, that means you cannot initiate contact. If it has broader language, it may bar you from accepting business from these customers at all during the restricted period.
A non solicit provision typically restricts your ability to solicit customers and/or employees during and after employment. These provisions are generally not subject to the new Massachusetts non compete law.
If there is a non compete provision in your agreement, your employer should give you ten days to consider it. This is an important opportunity to get legal advice about the non compete. It is also a good opportunity to get advice about other aspects of your agreement.
With respect to the non solicitation provision, it is important to understand how broadly it is worded. If it simply says you can't solicit, that means you cannot initiate contact. If it has broader language, it may bar you from accepting business from these customers at all during the restricted period.
Employment Contracts: Independent Contractor Provisions
Sometimes employers will try to classify your position as an independent contractor rather than an employee. Your position may not qualify under Massachusetts employment law as an independent contractor. If you see a provision stating that you are not an employee you might want legal advice on this as well.
How Our Employment Lawyers Can Help
We can help you review your employment agreement to make sure you are making an informed decision and protect your interests, whether it is before you sign the agreement or when you are transitioning to a new job. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
