What to look out for in employment contracts [closed]

Question

I thought of this today after a co-worker looked through the contract they had signed several years ago and was quite alarmed.

What should one look out for before signing a contract, as most employers will get you to sign one. Please post ideas separately so they can be voted individually.

Answer 1

Intellectual Property Clauses

Such clauses may state that the employer owns all intellectual property rights for any creative work produced during employment. If this is something that is important to you then make sure all vagueness around the definition of intellectual property and creative work is clarified and/or removed.

As programmers we write a lot of code and it is important to clarify before you start employment who owns the intellectual rights for a new algorithm or any patentable piece of code that you make come up with during your employment.

Answer 2

Be very careful of contracts that state that you can't work for any competitor for x number of month after leaving the company. Companies use the word competitor generously, so for a web development company this could include any company providing web based services.

This puts you in a terrible position if you get a better job offer or if your job ends up being horrible, because finding a job for somebody who isn't a competitor with your current company will be very difficult.

Answer 3

Joel Spolsky blogged about this. His main points were to look out for:

• A clause which forbids you to hire anybody who works for the company that is making you sign the NDA
• Non-compete clauses in their employment contracts
• Another dangerous clause says that you agree not to hire, or cause to be hired, anybody from the company if you leave for a period of x months (usually 12 to 24).

I've also seen contracts that forbid the hiring of working for customers of the company. If the company hiring you has a lot of customers, that could be a large amount of jobs you couldn't take after leaving.

All in all, I'd look out for clauses that restrict employment in general. For the most part, the goal of these clauses are to protect trade secrets, but they could also seriously hinder your job search.

Answer 4

In all my contracts, I always change the 2 following clauses that are in most case, not fair:

• not being able to work for a customer, competitor or similar industry for 2 to 3 years. I always ask to reduce it to 1 year.

• having the same contract termination rights than your employer. Most of the time you can't terminte while they can. It's not acceptable, this period should always be equal. They request a 2 weeks notice? You should have that right too.