Monday, November 17, 2008

Employment Contracts: My 4 Big Peeves

I just got a contract for an employer, who does temp staffing. I may or may not find work through them. Most likely, I won't be signing up, but I enjoy reading contracts and deciphering the legalese, marking it up with my own corrections that I must have changed and verified before signing. Invariably, when I bring my marked-up copy of the contract back to the employer and explain the folly of their assumptions, they are surprised, as if they never read the contract themselves (which they probably didn't). They then pass the contract to their legal team, which replies with a denial of changes. Only once have I signed a contract after being denied my changes. Several times (in better times), I've been able to hold companies to a higher standard and say, "No thanks. The pay isn't good enough to give up so much."

I should mention that I am not a lawyer and have no authority to give legal advice, aside from laying the law down on your ass.

Peeve #1: Legal indemnification from lacking common courtesy
[The Company] reserves the right to change, unilaterally without notice, any and all employment policies, rules, regulations, practices, procedures and programs applicable to Employee at any time and for any reason.
To demonstrate the legal power of this statement, take this possible scenario:

Immediately after you sign the employment contract, the employer decides to change the pay period rules for new employees so that new employees are paid every 6 months (or a year) instead of every 2 weeks. They don't tell you this and you work for about 4 weeks before the jig is up and you find out you aren't getting paid for another 5 months (or a year).

Now, a company would have to be run by serious assholes to pull this kind of trick and there are (potentially) local laws that protect you from your employer changing certain aspects of your employment without telling you (like yanking your healthcare and 401K) but I don't like to sign contracts that give people unwarranted power to be dicks, whether protected by other laws or not, it's just rude. Besides, is it too much to ask that I be notified?

Peeve #2: We own YOU
All information and intellectual property developed or generated wholly or partially by Employee during his/her employment with [The Company], including during any Engagement for a Client, including all intermediate and partial versions thereof, whether or not protected by copyright, will be the sole property of [The Company] upon its creation, and, in the case of copyrightable works, upon its fixation in a tangible medium of expression.
Whoah there! Take special note of the phrasing here as it says 'during his/her employment' but doesn't segregate work that you do "On the clock" or "for [The Company]". What they are effectively saying is that anything you do in your spare time, side projects, personal projects...anything creative or productive, belongs to [The Company] and you forfeit all rights and interests in such works. If you write a book while employed under this contract, they are claiming ownership of your book. If you find a cure for cancer in your DIY home lab and file a personal patent on the cancer fighting method, they claim ownership of that patent.

Technically, legally, this is total bullshit and will not stand up in court. Copyright ownership falls immediately upon the creator at the time of creation, unless the creator was specifically hired to create the intellectual property in question, in which case, the hiring party owns copyright. This means that [The Company], no matter what they say in this contractual agreement, has no legal authority to grab copyright ownership of things they didn't pay you to create--and they certainly can't take ownership of something that someone else paid you to create. Generally, there are local state laws that say as much, but, generally, it's an unnecessary legal addition to aid court battles that already have common sense on their side.

Peeve #3: Survivability of your obligations, but not mine
Either Party may terminate this Agreement at any time for any reason or no reason upon written notice to the other Party. Employee's obligations set forth herein will survive termination of this Agreement.
This one is actually scary and really screwed up. If you see this phrase in a contract, you better waive a red flag. This means that as soon as you sign it, and they have a copy, they can send you written notice that the contract Agreement is terminated, thereby absolving themselves of any and all claims and responsibilities falling within the Agreement, while you are still under all the provisions of the Agreement. How evil is that? That's pretty damn evil. I've seen this on multiple occasions. The only time I signed a contract with this phrase was once when I verified that the only obligation defined for me in the contract was to complete any work that I agreed to complete, in other written agreements, from time to time, which means that if I don't agree in other writing to do any work, I'm not obligated to do anything.

Peeve #4: You will protect us!
Employee hereby agrees to indemnify, defend, and hold [The Company] harmless from any liability for, or assessment of, any claims or penalties with respect to such withholding taxes, labor, or employment requirements, including any liability for, or assessment of, withholding taxes imposed on [The Company] by the relevant taxing authorities with respect to any compensation paid to Employee or Employee's partners, agents, or its employees.
Not only will you not try to sue us, but you will testify on behalf of us if it comes to court. You will defend us. Bullshit. You cannot contractually force someone to commit perjury or even to show up to defend you. However, indemnity is contractual. This does remove your right to sue, unless they are breaking actual laws, in which case the contract cannot protect them.

In closing:

Lawyers just pull in whatever blurbs they like that protect the company as much as possible, which usually means giving you absolutely no protection or rights. It's really important to not only read this stuff but to make your own notes and adjustments and stand up for yourself. If nobody ever says anything about these contracts, lawyers will keep making them worse and worse. However, make sure you are worth the fuss; for a lot of companies, their lawyers are $350/hour and too expensive to pay to deal with 1 prospective employee. But it can be worth it.

A contract that doesn't have at least one revision is a one sided contract.

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