Employment Agreement

[myhousekey]

My employer of the last 5 years brought up an Employment Agreement for me to sign at my recent annual review. I read it during the review and didn't agree with some of the terms including employee repayment of training/certification costs if I were to leave the company for any reason (including termination) as well as not going to work for any customers/competitors for a 2 year period if I left or was terminated. I have no current plans to leave the company, but if I did, it's highly likely I'd end up working for another company in our same industry (over 1/2 of the people I work with, including myself, come from a competitor of ours)

 

I have recently been told my raise will not be processed until I sign the agreement. I have also heard from another employee no year end bonus will be awarded if the agreement is not signed.

 

My understanding is Texas is a "right to work" state and the agreement seems to infringe on some of those rights.

Anyone have any legal advice in regards to this matter? Can they enforce no raises/bonuses if I don't agree to their terms?

Edited October 12, 2010 by myhousekey

[nuke'em ttg]

sign the whole f'n room with an AK-47 and see how they like that

[yo mama]

My employer of the last 5 years brought up an Employment Agreement for me to sign at my recent annual review. I read it during the review and didn't agree with some of the terms including employee repayment of training/certification costs if I were to leave the company for any reason (including termination) as well as not going to work for any customers/competitors for a 2 year period if I left the company. I have no current plans to leave the company, but if I did, it's highly likely I'd end up working for another company in our same industry (over 1/2 of the people I work with, including myself, come from a competitor of ours)

 

I have recently been told my raise will not be processed until I sign the agreement. I have also heard from another employee no year end bonus will be awarded if the agreement is not signed.

 

My understanding is Texas is a "right to work" state and the agreement seems to infringe on some of those rights.

Anyone have any legal advice in regards to this matter? Can they enforce no raises/bonuses if I don't agree to their terms?

My understanding is that "right to work" issues pertain more to unionization.

[SEC=UGA]

Sounds like pretty standard non-compete clause stuff for the sales, med, manufacturing industry. As a right to work state/employment at will, this is why they have you sign the contract. I do the same with some of my employees. They may be open to negotiate some of it, never hurts to ask. If you like the company and don't plan on leaving, sign it. If not, don't and keep your options open. They may can you.

 

Make sure that their is no language in the contract that keeps you from competing in the industry shpuld they fire you.

Edited October 11, 2010 by SEC=UGA

[myhousekey]

Make sure that their is no language in the contract that keeps you from competing in the industry shpuld they fire you.

During Employee's employment with Employer and for a period of 24 months following termination of Employee's employment for whatever reason (the "Restricted Period"), Employee will not, without the written consent of Employer, directly or indirectly, in any individual or representative capacity whatsoever or through any form of ownership, engage in (or induce or support financially or otherwise) any of the following acts:

3. Accepting employment from or becoming employed by any Customer that Employee had any business contact with during the Term;

5. Becoming employed by any entity, providing services to any entity, or having any ownership or equity interest in any entity, that provides services competitive with Employer to any Customer of Employer during the Term.

 

This seems to indicate even if I'm fired I'm restricted.

Edited October 11, 2010 by myhousekey

[myhousekey]

My understanding is that "right to work" issues pertain more to unionization.

That was my intiial understanding as well. I sent the form off to a friends company lawyer and he interpreted it differently.

[SEC=UGA]

This seems to indicate even if I'm fired I'm restricted.

 

I'd have them insert an exception for termination and probably go with it.

 

Right to work/at will employment basically means they can pretty much can you for whatever reason, within the bounds of eeoc regs, and you can quit for any reason without recourse. This is why they want you to sign.

[billay]

Non-Competition Agreements in Texas

Texas NonCompete Law Blog

 

These might prove helpful, and the second deals with other issues such as nonsolicitation and other restrictive covenants.

 

ETA: In this job market, somehow, I doubt that your employer will be open to changing the language of the agreement.

Edited October 11, 2010 by billay

[Ursa Majoris]

I'd have them insert an exception for termination and probably go with it.

 

Right to work/at will employment basically means they can pretty much can you for whatever reason, within the bounds of eeoc regs, and you can quit for any reason without recourse. This is why they want you to sign.

It looks like a non-compete that is standard for customer - consultant type relationships but the clause about not working for a rival is a crock of poo. You should sign a non-disclosure agreement instead, that would be standard practice.

 

I am not convinced this is enforceable at law.

Edited October 11, 2010 by Ursa Majoris

[myhousekey]

The other part that I'm really having a problem with is:

 

Because Upon termination or resignation, employee shall immediately pay employer:

2. Any direct cost the employer incurred for Certifications/Training obtained

by employee. During employment, employer shall forgive twenty percent (20%) of the

cost of such certifications/training annually upon employee receiving such. Five years

following such training while employee maintains employment with the company, this

balance shall be zero.

 

This almost makes me want to avoid training etc for fear I might have to repay the costs down the road.

[Deathpig]

If you know any lawyers, it's worth having them look over and modify the agreement to something you'd prefer to see. Employment contracts are negotiable, and you can use them to specify things you want (like specifying severance pay) as well... it's generally not a one-sided street. Worst possible case is they will accept no modifications, and then you have to decide if you want to sign it or look for work elsewhere (and this situation is impossible to predict with no understanding of the company and your role/position in it-- the more indespensable you are, the more likely they are to negotiate).

 

Organizations assume individuals won't negotiate/fight back so the 'agreements' they write are always slanted heavily in their favor; take the opportunity to push back.

[myhousekey]

Thanks for all of the replies. If anyone happens to know a good employment lawyer in the Dallas area they recommend please let me know. (I'm sure I can find one by searching online but always like recommendations).

[Pope Flick]

I'd also look into the legality of witholding your bonus if you don't sign. That seems to me (receiving a bonus) as something you two have already agreed on and it didn't include singing it for this year. Something doesn't smell right there, especially if you know you are in a bonus eligible position.

[Ursa Majoris]

The other part that I'm really having a problem with is:

 

 

 

This almost makes me want to avoid training etc for fear I might have to repay the costs down the road.

I've seen those before (we don't use them but they do exist). They are more understandable because the company is investing in you and wants to know it's money will be used for it's benefit.

 

It's the "can't work for a rival" piece that I have trouble with. If you're an commercial insurance specialist or whatever, where the hell else are you going to work? It's anti-competitive, IMO. The only way I'd agree to that is if they build in raises or bonuses. As it stands, this is golden handcuffs without the gold.

[myhousekey]

One other note of interest. Not all employees of the company are being made to sign the agreement. Only managers/executives and professionals (Engineers) have to sign it. I wasn't sure if that was an issue (almost like discrimination)

Edited October 12, 2010 by myhousekey

[Beaumont]

One other note of interest. Not all employees of the company are being made to sign the agreement. Only managers/executives and professionals (Engineers) have to sign it. I wasn't sure if that was an issue (almost like discrimination)

 

Not an issue.

[Beaumont]

I'd also look into the legality of witholding your bonus if you don't sign. That seems to me (receiving a bonus) as something you two have already agreed on and it didn't include singing it for this year. Something doesn't smell right there, especially if you know you are in a bonus eligible position.

 

If its already earned they cant hold it back.

[Furd]

I'm no expert on Texas law, but I believe Texas law is similar to Michigan law.

 

Your employer can probably sh*tcan you if you refuse to sign the agreement. I believe that they can make just about any employment decision that they want, for any reason or no reason, as long as they are not discriminating against you based upon gender,race etc.

 

Whether they can "withhold" your bonus depends upon a number of things. Did you already earn it? Texas probably has a law that precludes your employer from withholding it. Executive level employees usually have fewer protections than other employees.

 

One possible issue is whether the terms of the agreement are enforceable if you sign it. All contracts must be supported by consderation. Continued employment may not be sufficient consideration under Texas law.

[SteelBunz]

I'm interested in knowing why now, 5 years into your tenure, they've decided to even go with a non-compete clause. Did something specific happen? Not with you, but with a previous employee? Were they pilfering so many employees from a competitor that they thought, "Hey....maybe we should cover our own asses?" Are they secretly looking to downsize and don't want anyone they fire out there working for rivals?

 

Why now are they so fired up to implement this? Just seems curious.

[geeteebee]

The best employment practice attorney in Dallas is Bryant McFall at Ogletree Deakins. I've used half a dozen of them and there are many good ones at Haynes & Boone and Thompson Knight. However, Bryant is by far the best. He is not cheap, but will give you all the information you will need quickly.

[Beaumont]

The best employment practice attorney in Dallas is Bryant McFall at Ogletree Deakins. I've used half a dozen of them and there are many good ones at Haynes & Boone and Thompson Knight. However, Bryant is by far the best. He is not cheap, but will give you all the information you will need quickly.

 

A fine Emory guy and fellow alum of the Emory Debate team.

[gilthorp]

More often than not, these are documents that a judge can not enforce. More of a protection or intimidation tactic from the employers point of view, but if they want to make your life miserable by taking you to court they can...what would that really cost you when it's all said and done?

[Beaumont]

More often than not, these are documents that a judge can not enforce. More of a protection or intimidation tactic from the employers point of view, but if they want to make your life miserable by taking you to court they can...what would that really cost you when it's all said and done?

 

100% disagree. In Texas, the state at issue, these get enforced all the time. And if you breach it you are for sure going to end up on the bad end of a mean mama jama lawsuit which will most definitely not be covered by insurance.

[geeteebee]

By the way, my $0.02:

 

i would start looking for a new job pronto. Not because I hate employment agreements but because I would not want to work for a company that has created a culture of fear and insecurity. Any company that believes they can win by forcing their people into binding, one sided agreements is not a place I'd want to be. Maybe they believe that in this economic environment workers will sign because they want to keep their job, but that is extremely short sighted. What are they offering for consideration to validate the agreement? Are they guaranteeing your employment for a period of time? If not, I would delay signing as long as possible and start looking for a new gig tomorrow.

[Grits and Shins]

Used to be common practice at EDS (also in Texas) when Perot owned the company.