When you start a new job, your employer will likely ask you to sign an employment contract. These contracts typically outline your responsibilities, compensation and other conditions related to your job.
You may run into legal trouble if you violate certain elements of your contract. Before signing, make sure to review these common provisions that can have legal implications.
Non-compete agreements
A non-compete agreement restricts you from entering into competition with the employer during your employment and for a specified time after. Competition can mean starting your own business in the same industry or taking a similar position with another company.
Non-complete provisions often apply to a designated geographic area. Before signing an agreement, you should know the duration and extent of the restrictions.
Non-disclosure agreements
Non-disclosure agreements, or NDAs, prohibit you from sharing the company’s proprietary information with third parties. NDAs are commonly used to protect trade secrets or sensitive data.
You should make sure you understand what exactly your employer considers confidential and the repercussions for violating the NDA.
Arbitration requirements
Often, companies will include an arbitration clause in their contracts so that employees must submit disputes to binding arbitration, allowing companies to avoid legal litigation. Typically, the arbitration will favor the employer, so you should consider the implications of this kind of condition before signing a contract.
These provisions are not always enforceable, particularly if they are vague or do not meet state requirements. If your employer claims you have violated your employment contract, you may have legal options.
