The importance of paying attention to employment contracts

When people searching for new jobs are offered positions, it is understandably an exciting time.  Many employers in California offer contracts and apply pressure to the recipients to commit quickly. However, most employment contracts have boilerplate language that generally benefits the employer, and it could be important to a potential employee's interests to read, understand and run this language by an attorney prior to signing.

There are several main areas of concern with regard to boilerplate contract language, but three of the most troubling are governing law, offset and arbitration clauses. Governing law is a provision that states which state law will be relevant if a dispute occurs. This can be very important if an employee works with a company that is headquartered in a different state than the one in which the employee works. If there is an issue, many contracts require that any legal proceedings have to be undertaken in the state where the company is headquartered. This could put significant financial and professional strain on an employee if he or she must travel to fight a legal battle.

An offset clause allows an employer the permission to deduct income from an employee's pay check if the employer alleges that the employee has caused the company damages. Generally, companies are only allowed to deduct things such as payroll taxes from an employee's pay check without permission. Finally, an arbitration clause requires that any disputes will be heard and settled via an arbitrator, rather than in court. This can limit the ability of an employee or party to sue a company in an open court of law.

As these are only a few of the most common clauses in boilerplate contract language, it is apparent that the language can lead to a complex legal situation. Most employees in California who are signing high-level employment contracts seek the advice of experienced business law attorneys. Attorneys who focus on this area of law will be in the best positions to discuss the paths that best fit their clients' needs.

Source: medical economics.modernmedicine.com, "Why you should pay attention to contract boilerplate language", Andrew Knoll, Oct. 10, 2016

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