When you get a new job, get a contract


In the excitement of landing a new job, it's tempting to close the deal on a handshake. Not so fast. By putting your agreement in writing now, you can avoid disappointments, misunderstandings and legal headaches later.

One reader learned that the hard way. When he accepted a position at an HMO, the company asked him to relocate his family. But with a house to sell and his wife's career in the balance, this middle manager couldn't do that right away. He rented an apartment near work and went home on weekends. Meanwhile, the company promised to find his wife a job.

By the one-year mark, no position for his wife had materialized, and the manager got a rude surprise: Despite his excellent work record, the company fired him. Why? His family hadn't relocated, something the company thought was important to its image. Without a written agreement, our manager had no recourse.

Unless you get something in writing, a company might fire you for any reason or no reason, so long as it doesn't violate the law. A contract forces the company to come up with a better justification -- "termination for cause" in lawyer lingo. Often, bosses must let you know what you're doing wrong and give you time (say, 30 days) to fix the problem before they ax you.

Your goal is to limit "cause" to purposely harming the company, or being convicted (not just accused) of a crime, Mr. Reicher says. Watch out for contracts that give the company a lot of wiggle room with buzzwords like: "in the company's discretion," "at the company's option," "for any reason" or "at any time." When a company fires you for cause, it owes you next to nothing.

On the other hand, if you have a written contract and the company fires you without cause, it may have to pay your salary for whatever time you have left in the contract. Usually, when you accept another job, the money you earn there gets subtracted from what your former employer owes you. If you think asking for a written agreement sounds too pushy, consider the broken promises nonunion employees might have to live PTC with. Management could renege on its offer to let you work the day shift, suddenly order you to move, or bring in another supervisor above you. Given the stakes, it's perfectly polite to say, "Now that we've decided on the terms, let's put our agreement in writing."

Contracts don't have to be in legalese. Often a simple letter that you and the company sign is enough, says Patrick Flood, a lawyer in Omaha, Neb. It's a good idea to have a lawyer draw this up for you or look over any agreement the company drafts.

The contract should say exactly how long it lasts (like two or three years) and how you can renew it. List salary, bonuses, benefits and the starting date; give your title; and describe your responsibilities. Don't forget to say whom you'll be reporting to (name a job title, rather than a person) and how your performance will be evaluated.

Companies like to throw in "covenants not to compete." These provisions stop you from working in the same business (for a set period of time, and in a certain geographic area) after you leave the company. Be sure you don't sign away your right to earn a living.

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