¡No Firmen!

Who remembers that famous scene at the end of The Goonies in which Rosalita finds Mikey’s marble bag full of jewels and instructs Mr. Walsh not to sign the contract? “¡No Firmen!” she commanded, which Mouth translated to “No Sign!”

My duty today is similar to that of Rosalita’s. Today I warn you about signing employment agreements and other contracts when starting a new job without using the leverage that you have. No Firmen. No sign…

10 years ago, Joel Spolsky posted “NDAs and Contracts That You Should Never Sign.” His basic advice was to never sign Non-Disclosure Agreements (NDAs) that had a non-compete or non-recruitment clause. Much of his advice is still valid.

Think about how you feel on your first day at a new job. Most people get stuck in “sponge mode.” They are absorbing every piece of information and perform every task they are told. At some point in the day, you meet with the Human Resources contact to fill out and sign a collection of paperwork. Among these is the Employment Agreement (also called other names such as Employee Contract or Company Handbook), which may contain the aforementioned clauses. You are in the habit today of following orders, so you read through the paperwork and sign it, despite your conscience telling you not to.

 

¡No Firmen!

Often times the contract you signed is harmless. You don’t plan to scavenge through your new company and recruit all the best employees for another company. You have never in your history divulged company secrets to competitors for sport. So you think you have nothing to worry about. You figure that you can just sign the document and everyone will be happy.

I have made this mistake before, and to be honest, I still survived. It has caused me some inconveniences over the years though, and I do not like the sneaky, yet fairly standard, methods that companies use to get new employees to sign.

When you are sitting there on your first day hovering over a contract, you probably do not know what you should do if there is language that you would prefer not to commit to. First of all, you should be able to take the document and consult a lawyer if you would like. A company that does not allow this is purely shady. But what if your lawyer instructs you not to sign it? Do you force your brand new company to change it or you will quit? Almost no one I know would feel strongly enough about signing a contract to threaten to quit her job. Most people fear that even making that threat would indicate to their new employer that they are planning to breach the contract, true or not. “How embarrassing would that be?” they think to themselves.

Your employee rights generally entitle you to negotiate employment contracts and agreements. An attorney will help you, if you don’t feel comfortable negotiating on your own. However, some employers might not be willing to negotiate one or more of their standard employment contracts or agreements.

Subsequently, be aware that, although it’s your right, attempting to negotiate an employer’s employment contract or agreement is effectively the same as declining the employer’s initial offer through a counteroffer. If the employer rejects your counteroffer, then the employer might not be legally obliged to again make the original offer.

from “About Employment Contracts and Agreements”

As described above, if you attempt to negotiate the contract, it may void the employer’s initial offer. This is scary territory, territory that I would like all my readers to avoid where possible.

Instead, new employees must use the leverage they have before they lose it. In other words, if you wait until the day you start your new job to review any contracts you might sign, you have waited too long. Your leverage is greatest before you have accepted any offer from your prospective employer, especially if you are currently employed.

 

“If we don’t do something now, there’s going to be a golf course right where you’re standing.”

After you receive a job offer, a couple of thoughts should go through your mind. Leading the pack might be:

• “Is this the salary I want?”
• “How much notice should I give my current employer?”
• “What does the benefits package include?”

Next in your mind should be “What rights do I have to sign away when starting the new job?”

When discussing your offer is a great time to ask about this. Be up-front with your contact at the new employer and ask if you can see the agreements or contracts you will have to sign when you start. You can then review the contracts and negotiate if necessary. At this point, you have not given notice to your current company, so you have little to lose (even in the worst case) if you choose not to sign the contract. Sure, the new employer could rescind its offer, but at least you can continue working your current job until you find another one. None of your current colleagues or bosses will be the wiser. It sure beats the feeling of helplessness on your first day, doesn’t it?

 

“No Pen. No Write. No Sign!”

By asking to see employment agreements up-front, you can reduce your risk of being trapped in a clause that concerns you. I see no downside to asking a company for this information. However, I do not necessarily recommend disputing any contract you might disagree with. You must weigh the benefits versus the risks of renegotiating any contract.

With that in mind, please help to spread this knowledge to friends and colleagues, especially those that have technical careers. Employees get “tricked” into signing unfavorable agreements often, yet it only takes a little preparedness and forethought to avoid them. And since you’ve already committed to reading this blog post, I need you to go ahead and sign my petition below. Don’t worry about the consequences. It’s harmless.

 

image by Kapungo

Update: For more information regarding employment contracts, see this great article
What Every Employee Should Know About Non-Compete Non-Solicitation Contracts.