So, you have a job offer and are ready to accept – Congratulations! First, however, your new employer asks you to sign an employment contract. It might sound like it’s a routine document but these agreements could contain some common red flags that ultimately work against you.
Indefinite noncompete clauses
Per Michigan laws, noncompete clauses must be reasonable in scope, duration and geographical area. If they are not, courts may deem them unenforceable.
If you notice your employment agreement contains this type of clause but the terms are indefinite or it is otherwise unreasonable, it can be a major red flag. In addition to being unenforceable, these clauses can also signal that the employer does not know or care about the rules for utilizing these provisions.
Inaccuracies with compensation or benefits
Be sure you check the fundamental details of the agreement. Is the pay rate the same as what was in your job offer? Does the contract specify the benefits the employer promised and is legally required to provide?
Mistakes and omissions with these elements could be simple oversights or they could be attempts to get you to agree to something besides what the employer promised you.
Your agreement is between two parties, but if the provisions only work to penalize you or hold you accountable, beware. These one-sided provisions can be unfair and leave you exposed to costly consequences.
For instance, if the agreement only outlines the penalties you face for a contract breach but makes not mention of your rights in the event your employer breaches the contract, that can be a red flag.
Unusual or unreasonable expectations
During the interview process, you may or may not have learned about unusual characteristics of the job or the company. However, if an employer puts these in a contract, they can take on a new meaning. Watch out for anything that seems:
- Overly aggressive
- Out of alignment with your personal beliefs
Employment agreements should not contain terms that make you feel uncomfortable or trapped. If they do, consider working with an attorney to negotiate on these elements.
While you may be excited to get started on the new job, do not overlook these and other red flags you might find in an employment agreement. Proceeding with caution can help you avoid future legal, professional and financial headaches in the future.