Employment Contract Red Flags

Papers on a desktop with the word CONTRACT in bold, all caps.

A federal court recently ruled that Tesla must pay a former contract worker $137 million in damages following a claim of abuse while working for the company. Owen Diaz worked for Tesla as a contract worker and dealt with a hostile work environment. Other employees bullied him and other African American workers, including racist graffiti and drawings. It's a shocking story, but if Owen had signed his Tesla contract, he wouldn't have even been able to take the company to court over the abuse they did nothing about. The employment contract with Tesla stipulated that all disputes had to go through mandatory arbitration, which prohibits parties from taking each other to court, requiring all involved to settle claims and disputes privately. It rarely works out in favor of employees when included in employment contracts. These arbitration clauses prevent employees from taking an employer to court if there is a dispute, so it is a good idea to review employee contracts carefully to see if this kind of language is included.

Whether you're a short-term contractor or a long-term employee, it is critical that you read and understand what your rights and responsibilities are according to any employment contract before you sign it. Your provider attorney through our Legal Protection Plans for Individuals and Families will be able to walk you through any employment contract your employer asks you to sign and help you work through potential resolutions for any terms that strip you of your rights or throw up any other red flags.

What To Look For

Restrictive Covenants

Restrictive covenants are usually included in employment contracts to protect the company, other employees, or clients of the company. These could include clauses such as non-compete, non-disclosure, or non-solicitation.

Job Description

Even if you already know what your duties on the job will be, it is important to make sure that the language used and description of your job match up with any job description  where you applied or in your interview or other documents. If the description of your job differs, you should bring this up with Human Resources or the hiring manager. If the changes are significant, talk to your attorney about appropriate next steps.

Salary & Requirements

Again, if the language or details in the employment contract differ from what you were told in your offer letter or other communication, speak to the hiring manager or Human Resources for the company before signing. You can also discuss this with your attorney so you have a firm knowledge of what to say. This section should also include details on how and when you will be paid and how any bonuses are distributed and your eligibility.

Working Hours

Double-check the details here, too. Make sure that the start date, number of weekly working hours, and days off all match what you have been previously told. Again, if there is a discrepancy, speak to HR or the hiring manager. You attorney can help you here, too.

Sick Leave and Holiday Pay

Understanding policies surrounding sick days and holidays is also important. What does the contract state are the procedures and policies for taking time off, whether you are required to take your time off or lose it after a certain date, and if there are any days that are company holidays?

If you ever receive an employment contract from an employer - whether a new one or one you have worked with for years - and you need clarity or a better understanding of your rights, you can call your provider attorney any time for advice, document and contract review, and more at no additional fee. For just $29.95 per month, you can have the piece of mind knowing that you understand any contract given to you before you sign a legally binding document. Learn more about all the benefits of our Legal Protection Plans for Individuals & Families, or sign up today!