Employment contracts dictate your pay, duties and even exit options. In Denver, Colorado, these agreements look routine, but one small detail can affect your career and income. Unclear terms can result in disputes over wages, bonuses or separation pay, so you need to review them well.
Common trouble spots to watch
Contract clauses often result in costly disputes. Make sure you spot the following before you sign:
- Noncompete: Some contracts try to stop you from working in the same industry when you leave. After the Federal Trade Commission (FTC) ban failed, courts now cut down or toss broad noncompete. Consider asking for gardening leave (paid time off during the restriction) to keep your income.
- Bonus and commission language: Insist on clear formulas and exact targets so you know what earns you pay.
- Severance and cause: Employers may widen the definition of “cause,” so you lose severance or equity. Negotiate a 30-day cure period so you can fix any alleged problem before you lose pay.
- Arbitration clauses: Some contracts force disputes into private arbitration. Ask for plain clear wording or an opt-out if you want to go to court instead. Note that many harassment claims now avoid mandatory arbitration.
- Pay definition and deferred comp: If a contract counts only base salary as “pay,” you can lose 401(k) matches, car allowances and investments. Make sure your contract defines pay to include all parts of your compensation.
When these clauses cause issues, they can lead to expensive disputes and wasted time. Employers and employees alike may face strained relationships.
Protecting your pay and reputation
A valid legal contract uses precise wording that covers all aspects of employment. If you are unsure if you should sign, an experienced employment lawyer can review the document and spot hidden risks and reduce the chance of escalations. Remember, you do not have to rush signing your contract because your career and pay depend on it.