As a Jacksonville Florida non-compete Lawyer, I often am asked about some of the provisions that are contained in a Florida employment agreement. I found an article on the Texas Non-Compete Law Blog, entitled Texas Executive Employment Agreements: Checklist for Employees and thought that the information would be relevant to my Florida Clients. I have based this information on what was contained in that article, but modified removed some information and added some that is specific to Jacksonville and throughout Florida .
1. Term of Employment. Employment agreements are either for a fixed term or at-will. An at-will employment agreement can be terminated by either party at any time for any reason. Some employment agreements that are purportedly for a fixed term (e.g., a one-year term) also contain provisions pursuant to which the employer may terminate the employee “for any reason” on shorter notice (e.g., “thirty days’ notice”)–such an agreement is in reality a 30-day employment contract.
2. Position, job duties, location. Employment agreements routinely contain provisions outlining what the employee’s title will be, what their duties will be, who the supervisor will be, and where the work will be performed.
3. Compensation. Employment agreements often reference compensation or salary and sometimes discretionary compensation (e.g. bonuses and stock options).
4. Termination for Cause. Employment agreements often provide that an employee may be terminated for “cause,” and “cause” is defined to include various acts or omissions by the employee. Some acts–like commission of a felony and embezzlement of company funds are fairly easy to understand. However, defining “cause” to include the employee’s failure to perform his/her job duties can be difficult because this can be subjective. Employees want what a clear non subjective definition of cause.
5. Classification. Employment agreements often reference an employees status as exempt or non-exempt. In some cases employees are classified as independent contractors. Whether or not an employee is an independent contractor, an employee, exempt, or non-exempt is often a factual analysis of the interactions amongst employees and their employers.
6. Nondisclosure Agreements. Employment agreements can contain prohibitions on the disclosure of the employer’s confidential or proprietary information to a third party. An employee needs to know what information the employer considers to be confidential or proprietary. Employers need to notify employees what information they consider confidential or proprietary.
7. Non-compete Agreements: can contain provisions limiting an employee’s right to compete with the employer, both during and after employment. The provision should specify activities in which the employee may not engage. In Florida the geographic scope of the restrictions must be reasonable. Terms of non-compete agreements are limited in Florida, most agreements that are in excess of 2 years are considered unreasonable and the court may shorten the term.
8. Non-solicitation Agreements. Along with non-compete provisions, some employment agreements contain prohibitions on soliciting the employer’s customers, its employees, and/or its vendors. In Florida, these provisions are enforceable.
9. Change in Control. What happens if the employer is purchased by another company? Should that affect the employee’s obligations? Should the employee be able to escape his non-compete and non-solicitation obligations? On a related note, should the employer be able to assign the agreement to another company (so that the “new” company can enforce the employee’s non-compete and non-solicitation obligations)? Employment agreements don’t always address these issues, but employees are wise to think about them.
10. Arbitration. Employment agreements often state that legal disputes between employers and employees must be submitted to binding arbitration (versus being litigated in court). Provisions like this can be one-sided (i.e., sometimes, only the employee is required to arbitrate its disputes, whereas the employer can go to court). Employers need to be mindful of the effects of agreeing to arbitrate disputes as opposed to litigate them.
11. Choice of Law and Forum Selection. Employment agreements usually specify the state whose law will govern the agreement and the place where suit must be filed in the event of a legal dispute. The latter can be especially problematic for an employee, because it may require her to bring any claims she may have in a foreign state, which can be very expensive.