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Legal Review of Employment Agreements: Why It’s Crucial for Both Parties

By Douglas Lipsky
Partner

An employment agreement is a legally binding contract between an employer and an employee that outlines the terms and conditions of employment. These agreements typically include details such as job responsibilities, wages, benefits, work hours, and conditions for termination. Importantly, they also may contain confidentiality and non-compete clauses. In short, these agreements play a critical role in defining the legal rights and obligations of the employer and the employee. 

Benefits for Employees

For employees, a legal review of their employment agreement provides crucial benefits that safeguard their interests and careers. An experienced employment lawyer can explain complex legal jargon and ensure that the terms are fair and reasonable. Key areas of concern for employees include:

  • Compensation and benefits – ensuring the agreement clearly outlines salary, bonuses, and benefits.
  • Noncompete/confidentiality clauses – assessing restrictions on future employment and obligations regarding sensitive information.
  • Termination clauses – understanding the conditions under which employment can be terminated 

Having an attorney review and negotiate these elements can prevent disputes and provide peace of mind.  It’s not just about understanding the contract but protecting your rights and future career prospects.

The Advantage for Employers

Having employment agreements legally reviewed is equally beneficial for employers, ensuring that the contracts are comprehensive, legally sound, and enforceable. An attorney can assist in drafting clear and precise terms that accurately reflect the job duties, expectations, and responsibilities. Primary concerns for employers include:

  • Clarifying duties – ensuring that the employee understands their role and the employer’s expectations
  • Confidential business information – safeguarding company assets, trade secrets, and sensitive information.
  • Enforceability of noncompete clauses – ensuring these clauses are reasonable and legally binding to protect the business interests.

A thorough legal review helps prevent potential misunderstandings and disputes and can save the employer significant time and resources.  It’s about creating a solid foundation for the employment relationship that supports the company’s objectives while remaining fair and legally compliant. This step is crucial in managing risks and setting up a professional relationship that aligns with legal requirements and business goals.

Why You Need an Employment Lawyer

Navigating employment agreements without legal counsel can lead to several pitfalls for employers and employees:

  • Vague or ambiguous terms – lack of clarity in job duties, compensation, or termination conditions can lead to disputes.
  • Noncompliant clauses – terms that do not adhere to employment laws can render parts of or the entire agreement unenforceable.
  • Unreasonable clauses – terms that excessively restrict an employee’s future employment opportunities or involve overly harsh penalties can lead to legal challenges.

Avoiding these pitfalls requires a comprehensive review by an attorney well-versed in employment law to ensure the agreement is not only fair but also adheres to all relevant laws and regulations. It’s about striking a balance between protecting the interests of the employer and ensuring the rights of the employee are not infringed upon. Ultimately, a well-drafted employment agreement can prevent costly and time-consuming legal disputes, fostering a positive and clear employer-employee relationship.

The Bottom Line

A legal review of employment agreements is critical for employers and employees, ensuring clarity, fairness, and legal compliance. By consulting an employment lawyer both parties can enter into an employment relationship with a solid understanding and protection of their respective rights and obligations.

About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.