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Common employment contract terms

Employers are using employment agreements with more frequency. Job candidates must keep an eye on certain terms that can impact their employment prospects and should be prepared to negotiate for better terms in these employment contracts.

Following a U.S. Supreme Court decision issued earlier this year, employers possess more legal power to enforce arbitration terms in these contracts. Under arbitration, employers can take disputes to arbitrators instead of facing class action lawsuits or other court proceedings. Employers usually bear the costs of arbitration proceedings.

Arbitration usually remains confidential and may take away workers' rights. But, courts may invalidate arbitration clauses that are unreasonably slanted in the employer's favor or extremely unfair.

Employers may also seek non-competition or non-solicitation agreements that are intended to protect legitimate business interests concerning solicitation of its clients or customers and business good will. Agreements that contain reasonable geographical, time or client imitations may be enforced.

Agreements may be invalid when they are overbroad or if a worker does not have access to protected information. For example, a fast-food franchise was criticized for imposing an agreement upon low-wage employees that prevented them from working for a competitor for two years and within a three-mile radius.

Confidentiality agreements also protect trade secrets and proprietary or other confidential information, usually for an unlimited period. Overbroad confidentiality agreements, however, may be unenforceable.

Employers may also use employee handbooks as a form of contract. These usually contain company rules for all employees. Employment contracts and handbooks cannot contain terms that violate federal or Pennsylvania labor and wage laws. Employers cannot compel employees to waive rights under these laws.

An attorney should review employment agreements with job applicants. They may be able to help negotiate more favorable terms.

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