Is it a Contract, or isn’t it a Contract?
Massachusetts does not require employers and employees to sign and enter into formal contracts. Moreover, Massachusetts is what is referred to as an “at will employment” state, meaning that in Massachusetts, an employee can be fired for any time and for any reason, or even for no reason. In addition, an employer can fire an employee without notice.
Still, there are many situations when a Massachusetts employee actually has a contract although no official contract between the employer and the employee has been expressed in writing. Sometimes a contract can be implied because of the nature of a signed offer letter which clearly describes the job description, how the employee is to be paid, and any other benefits offered by the company. Typically, an employee handbook does not constituted an employment contract.
There are still other circumstances in which the employee has signed a clear employment contract in Massachusetts. Signing an employment contract with an employer is more common in certain professional settings, the entertainment field, and with other highly competitive employers. When a Massachusetts employee has an express, written contract between themselves and the employer, the next question for legal analysis is, “is the contract fair?”
A Fair Employment Contract in Massachusetts
Fair for Who?
As in any contract, and an employment contract is not different, the question as to the fairness of provisions within the contract come down to another question, “fair for who?” The goal of a contract drafter, at least in most cases, is to write a contract for a client that is reasonable for all parties involved, but which gives the drafter’s client a slight edge. A contract needs to be reasonable, generally speaking, to be enforceable in court. Keep in mind when reading a contract written by an employer that in most instances the contract was written to favor the employer, not you. While this sentiment is, perhaps, common sense, sometimes the emotions involved with an exciting new employment prospect can cloud the judgment of the prospective employee.
Non-Disclosure Provisions in Massachusetts Employment Agreements
Some contracts will contain a nondisclosure agreement within the employment contract while others may be separate and an addition to the employment contract. The purpose of these clauses or individual contracts are to ensure that any trade secrets or other information that the employer wishes to keep private, remains private. Knowing what the limits of disclosure are, as outlined by an employment contract, is critical to avoid violating such provisions.
Non-Solicit / Noncompete Provisions in Massachusetts Employment Agreements
Massachusetts employers will also typically include a non solicitation, or non compete agreement within the employment contract or as a separate contract. The goal of such a provision or separate contract is to prevent you, the employee, from competing against the company while you are employed or after your employment has finished. As of 2018, new rules were enacted by the state legislature in Massachusetts raising the bar on what constitutes a valid noncompete agreement in Massachusetts. If you have signed a non solicit or non compete agreement after 2018 your employer will be subject to these new rules.
Termination Provisions in Massachusetts Employment Agreements
Because of the “at-will” status of Massachusetts employers, that is, the employer’s ability to fire an employee at will, many Massachusetts employers will not have an official signed contract with its employees and will reserve the right to fire an employee for any reason (or no reason). But, for employers with termination provisions written into a contract between the employer and the employee, it is a must for the employee to understand the details of the provisions PRIOR TO SIGNING THE CONTRACT.
As a prospective employee, if you have a termination provision in your employment agreement, you need to understand how that affects you. Often, an employer is incentivized to “find cause” if this provision has language allowing the employer to terminate you for cause, and language allowing severance if no cause. This type of provision in a contract may be able to be negotiated prior to signing the contract.
Also, as a prospective employee, it is important to note whether a termination provision allows you the right to cure. A right to cure in this context allows you to fix a problem prior to termination, and is a good idea to negotiate for inclusion in a contract.
“Wait, I Thought I was Working for You.”
Some slick employers will try to contract away liability by creating a relationship with you and the company that is not an employer-employee relationship. Instead, an employment agreement may try to describe your role in the company as that of an independent contractor. If you know that you wish to be an independent contractor prior to entering into a contractual relationship with an employer, then this is not a problem. However, what do you do if the language in the employment agreement creates an employer-independent contractor relationship that is either unintended or by design?
Attorney Gaudet will analyze your employment agreement to ensure that you are in the strongest position possible when entering into a contract with a new employer. Or, if you have already signed an employment agreement or employment contract with a Massachusetts employer, attorney Gaudet will review that contract and inform you of your rights under that contract.
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