Understanding Pre-Employment Job Agreements and Contracts - dummies

Understanding Pre-Employment Job Agreements and Contracts

Getting your job offer in writing with a pre-employment job agreement or contract (or a job offer letter) is advantageous for you and the employer. Although your verbal job offer covers such specifics as the term of employment, duties, and compensation, what happens if disputes arise? It’s your word against theirs.

A job offer letter is the minimum promise protection you should have in any work opportunity requiring you to resign your current job or to relocate out of your residence. A job offer letter is a condensed pre-employment contract outlining the basics of your employment. In small companies a job offer letter may be written without a lawyer’s help.

A written agreement also benefits an employer because you as an employee agree to provide specific work benefits and make certain promises (like not revealing company secrets or stealing company customers). Employment relationships are increasingly contract-oriented for professional, managerial, technical, and administrative positions.

What pre-employment agreements cover

Usually pre-employment agreements regulate one or more of the following issues:

  • The position being offered and accepted

  • The compensation that will be paid

  • Specific benefits regarding paid leave time (like vacation and sick days) and whether such time accrues from year to year

  • Responsibilities of both parties concerning the work to be done

Danger points for you to recognize and investigate fully before signing your acceptance agreement include the following:

  • Repayments of training cost or relocation expense that are required under certain conditions.

  • Non-compete clauses that prevent you from working elsewhere in a given locale for a specified period of time.

  • A statement that the terms of the agreement are subject to change in the future.

  • A statement that you are to be bound by the terms of the company’s employee handbook, which you may not yet have seen. (The handbook itself usually notes that it is subject to change at any time by the company.)

  • Agreement to arbitration and other alternate dispute resolutions that come with a muzzle clause prohibiting you from discussing settlement details of disputes. Arbitration is a contentious issue with employees often feeling that arbitrators (wishing to be hired again) may side with companies because they’re more likely to be repeat customers.

If you’re required to sign a pre-employment agreement that mandates arbitration, ask that language be inserted requiring that the arbitrator be chosen from a list maintained by the American Arbitration Association or another selection organization that operates with a code of ethics.

Negotiations and legal considerations

Legally, no iron-clad contract rules apply in every state, and each employment contract is different. What should you do when a contract’s provisions include factors that you don’t like and have not verbally agreed to? Can you negotiate the boilerplate? In most cases, the answer is yes — to a degree. You have more leverage to negotiate a contract in tight labor markets; you have less leverage in surplus labor markets when ten people are standing behind you ready to grab the job.

Pre-employment agreements and job offer letters are generally legal and enforceable — but not always. If you can’t afford to consult an employment lawyer before signing a pre-employment contract, bulk up your knowledge; run a Google search for “pre-employment contracts” and “employment contracts.”