Negotiating Employment Contracts

Many employers feel that once they clear the interview process and are offered the job, they must accept the conditions of employment offered in the initial offer letter.  This is not necessarily the case.  There may be room to negotiate various aspects of your employment, including pay, holidays, benefits, assistance, office, or other conditions of work.  This is particularly true for those entering into management positions, but it can apply to others as well.  Each situation is unique.

Additionally, you’ll want to understand all of the conditions of your contract before signing. This includes any reference to your employment status, probation time periods, terms and conditions of termination, and any potential limitations to your ability to work in the same role for a competitor should you cease employment with your new employer.

Before you sign your employment contract, you may wish to seek legal advice to ensure that you are getting the best possible agreement, and that you are protecting your ability to earn a living should you cease to be employed by that company in the future.

Independent Contractors vs. Employees

Whether a worker is an employee or an independent contractor depends entirely on the facts of each case. Think of it as a continuum: at one end is the true employee; at the other end is the true independent contractor. An analysis of the relevant factors determines where a worker falls on that continuum. If you are closer to the employee end of the spectrum, you will be entitled to reasonable notice. If you fall towards the independent contractor end, you may still be entitled to some notice.

Some of the factors a court will consider in determining a worker’s status include:

• The duration / permanency of the relationship;
• The degree of reliance;
• The degree of exclusivity;
• The degree of control exercised by your employer;
• Provision of / ownership of tools;
• Whether you have a chance of profit or a risk of loss in the business

Non-Competition & Non-solicitation Agreements

A restrictive covenant is a promise not to do something. The most common types of restrictive covenants in an employment context are non-competition and non-solicitation agreements. Such agreements can prohibit or place parameters on a departing employee’s post-employment activities. Such agreements are applicable whether you resigned OR whether you were terminated.

In determining whether a restrictive covenant agreement is enforceable, our courts assess a number of factors, such as:

• Does the employer have a legitimate business interest to protect?
• Is the restriction reasonable in its duration (number of years)?
• Is the agreement reasonable in its geographical restriction?
• Is the nature of the restriction (what it prevents you from doing) reasonable or is it overly broad?
• Are the terms of the agreement clear or is there ambiguity?

The employer has the burden of proving that the terms of the restrictive covenant are reasonable.

If you are a fiduciary employee, then, even if you have not signed a non-competition or solicitation agreement, you are still subject to post-employment restrictions that are implied by the common law. A fiduciary cannot take, or divert to others, a maturing business opportunity, or solicit a former employer’s customers or employees for a reasonable period post-departure. Fiduciaries are usually top management roles and are characterized by an ability to exercise discretion and power unilaterally in affecting the employer’s legal and practical interests.

All employees who are not fiduciaries still owe their former employer a common law duty not to divulge or otherwise use trade secrets and other confidential information acquired during employment. Again, this is so whether or not an agreement to this effect has been signed.