5 Legal Tips for Negotiating Employee Contracts - Free Enterprise
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5 Legal Tips for Negotiating Employee Contracts

Whether you're bringing on a new hire or renegotiating a current employee's contract, you need to stay on the legal level in negotiations.

As Forbes reports, many employers are getting pretty brazen with how they (mis)treat potential employees in salary negotiations or interviews. But you don't want to begin your employee-employer relationship to begin on tenuous or legally shaky ground.

To make sure your business is on the right side of negotiations, check out these five legal tips for negotiating employee contracts:

1. Don't Make Promises You Can't Keep.

Regardless of the position that you are negotiating from, an employer should avoid making promises or guarantees about a position that the business cannot keep. Even if these promises don't end up in an employment contract, an employee may use promissory estoppel to seek enforcement or damages in a breach of contract action.

2. Be Unambiguous About Unpaid Internships.

Along the same lines, be crystal clear with potential interns that their positions will be unpaid and will not necessarily lead to a paid employee position. Setting expectations in the interview process may help you avoid an unhappy intern come the end of summer.

3. Make Negotiation Collaborative.

An employee contract negotiation should be a constructive dialogue between you and your employee. Much like mediation, contract negotiation shouldn't have to be an adversarial process, where one side begrudgingly cedes to the other's power of will. Contrary to the common adage, compromise can leave both parties happy.

4. Be Open to Changing Boilerplate Clauses.

There are significant legal problems with using boilerplate contracts in an employment context, but you may also lose a potentially amazing hire if you are inflexible about certain clauses. For example, if an employee wishes to modify a noncompete clause to better fit his or her expectations, why not consider it?

5. Consult a Lawyer.

Whether negotiations take place over the phone or in-person, it would be prudent to have a contract lawyer to consult before making your next move.

Keep these contract tips in mind, and you'll increase your chances of a satisfied (and non-litigious) employee.

  • Need legal advice on how your small business should operate? Consult with an experienced business attorney about your options.

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