You may have had a job before, but have you had to sign an employment agreement? As you embark on an internship, a co-op work term, a summer job, or your first job after graduation, you may be faced with having to sign an employment agreement. Signing your first employment agreement can be a daunting task. Instead of breaking out into a cold sweat and wondering what you are getting yourself into, you need to understand the different parts of an employment agreement so that you can anticipate what to expect.
 
Employment agreements are meant to protect the employer and the employee by clearly establishing the terms of employment. The obligations that each party has to the other, as well as the benefits that each party will receive from the other should be clearly documented. Employment agreements differ from company to company in terms of format, length, language and content. Companies may use a 1-2 page offer letter that includes elements of an employment agreement; some may use thicker agreements that incorporate elements of an offer letter; while others will use a combination and ask you to sign both an offer letter and an employment agreement. Some agreements may be very easy to read while others require a law degree to understand. There are some common elements in employment agreements, however the content will change depending on the company. So, what can you expect to find in an employment agreement?
 

Job Related Information

 
Title, start date, compensation, duties and responsibilities, probationary period, and term of agreement should all be included in the offer letter and/or the employment agreement. The compensation will include details about salary, benefits, bonus/incentives, and vacation.
A probationary period is a period of time following a start date where the employer and employee can ensure that each party is meeting the employment requirements of the other. The length of the probationary period may differ among companies, if there is one at all. If there is a probationary period, it will most likely be between three and six months. Whether or not there is a probationary period for a co-op term or internship will depend on the length of the work term.
The agreement should also specify if the position is a fixed-term assignment — meaning there is an end date — or is an indefinite term assignment. For example, your co-op terms or internships will be fixed-term assignments as they are temporary.
 

Confidentiality
Confidentiality clauses, also called non-disclosure clauses, are a key part of any employment agreement. Companies need to protect their information in order to maintain a competitive edge. These clauses generally include provisions for product or service related information, client information (including client lists), and other information that you acquire simply because you are an employee. Most agreements will specify what is classified as confidential information. It’s important to note that confidentiality clauses are not only in effect while you are an employee, but also after you leave the company. Once you are no longer an employee, you will still be covered under the confidentiality clause of the agreement, which means that you cannot disclose any information deemed to be confidential even after you are gone.
 

Non-Competition and Non-Solicitation
The non-competition clause means that you will not work for the employer’s competition during or after your employment with them for a certain period of time after you have left, and usually within a certain geographical region. The last thing your employer needs is for you to take all of that confidential information and go work for the competition down the street.
Non-solicitation clauses mean that you are not going to solicit business or employees away from the employer during or after your employment relationship has ended. There is also a period of time attached to this clause. In other words, if you leave, you can’t ask your work friends to leave and join you at your new company. You’ll just have to make new work friends.
 

Intellectual Property
This term refers the product of the creations of the mind, such as trademarks, designs, copyrights, slogans, etc. Since a company’s success is dependent on its intellectual property, it is important for companies to include this clause in the employment agreements. The degree of emphasis on intellectual property will depend on the type of business that you are working for. Obviously, technology companies tend to have a strong emphasis on intellectual property.
 

Termination Clause
This clause establishes any period of notice that the employer or employee needs to give the other party in the event that the employment relationship ends. This clause will also outline the elements of termination for cause to reduce as much ambiguity as possible.
 

Other Clauses
There are many other clauses that can be included in an employment agreement. Some other clauses that you may encounter include a clarification clause stating that the company owns all customer lists, customers’ records, copyrights, patents, etc. This is often covered in the Intellectual Property clause, however you may see it separately.
The employment agreement should also outline the company’s policies. If they do not summarize the policies in the agreement itself, then they may reference the company policies and require you to abide by these policies. If you have any questions about the policies before you sign, then ask!
This list of employment agreement clauses is not exclusive; there are other clauses that can be included in an employment agreement. When you are presented with an agreement, ensure that you take the time to read. It is important that you understand the agreement so that you make an informed choice as to whether or not you should sign it. Don’t assume that the agreement is okay to sign without careful review. Make sure that the duties and responsibilities in the agreement accurately reflect what you understand the responsibilities of the position to be. At the end of the day, it is going to come down to what is written into the employment agreement and not what you were told in the interview process so make sure that you are comfortable with the information that is written into the agreement. Some agreements will be easier to read than others. If you have questions or need clarification, then it is your duty to ask questions.
Remember that employment law will dictate certain minimum requirements including minimum wage and the number of hours that you can work in a week, to name a couple. Agreements can offer you more than the minimum stipulated in the applicable employment law (for example, more vacation or more termination notice), but it cannot offer less than what you would be entitled to under the appropriate employment law.
At some point in your career, you will be presented with an employment agreement. Don’t take signing an employment agreement lightly. Ensure that you understand what you are signing before you sign it. Ask the employer to go through the agreement with you so that you can ask questions along the way. If you are not comfortable with the answers that you are getting, then take the agreement to a lawyer to review. Before you put pen to paper to sign the agreement, you need to know what you are signing. And always remember to get a signed copy of any offer letter and/or employment agreement. jp