Employment contracts set out the rights and obligations of the employee and employer. You should always have any new contract reviewed by a professional to ensure you understand its terms and implications. Costante Law can help break down each clause to ensure you know exactly what is expected in your employment relationship, and what might happen if that relationship should ever break down.
Non-Compete & Non-Solicitation Clauses
Non-compete clauses exist in an employment contract to prevent an employee from a.) working for a competing business or b.) starting their own business performing the same services as their employer in the event that they decide to leave the company. It is important to consult with a lawyer to determine whether you continue to be bound by such a clause after you leave your former employer.
Non-solicitation clauses prohibit employees from taking clients/customers, vendors, partners, or other employees from their employer upon leaving their position. A non-solicitation clause may be unenforceable if the language does not provide restrictions relating to geographical location and duration.
Confidentiality
All employees, especially those whose employment contracts contain a Confidentiality or Non-Disclosure clause, have an obligation to keep trade secrets or other information giving an employer a competitive edge in strict confidence. This, however, does not mean that employees are barred from using the knowledge they acquired in a previous position for professional gain in a new one. Consulting with an employment lawyer is the best way to determine your rights and obligations.
Termination Clauses
Termination clauses are used in employment contracts to outline the notice period an employee is entitled to upon termination. The notice period outlined in a termination clause is often different than the period an employee is entitled to at law. Many termination clauses are drafted in such a way that an employee agrees to accept only their minimum entitlements under the Employment Standards Act. It is important to provide your lawyer with a copy of your employment agreement so that they can determine whether your termination clause is valid and if you are entitled to more compensation than your employer is offering.
Fiduciary Duties
Fiduciary obligations or duties are closely tied to confidentiality. In an employment relationship, either party may be in possession of valuable information that, if not kept confidential, could potentially cause harm to the other party. The “fiduciary” in the relationship is the party with the power to misuse confidential information and the “beneficiary” is the party that may possibly be exposed to harm. The fiduciary has an obligation to act in the beneficiary’s best interest, even if there is no explicit statement outlining this in the employment agreement.
Independent Contractor v. Employee
The rights and obligations of an independent contractor can vary greatly from those of an employee. Under the Employment Standards Act, employees are entitled to vacation/holiday/overtime pay, notice or pay in lieu of notice upon termination, and the right to collect Employment Insurance benefits. Independent contractors, however, are not entitled to them unless they are negotiated into an employment agreement. Some employers will try to avoid the costs associated with having employees by asking them to sign an Independent Contractor Agreement. It is important to consult with a lawyer to determine your true employment status at law.
