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Employment contracts

An employment contract outlines the terms of employment, including payment, benefits, duration of employment, and who the employee reports to.

Joshua Michael Avigad | Nov 20, 2019

Failure to pay all outstanding commisions can be big trouble for a Missouri employer.

Missouri statutes protect payments of outstanding commissions. A Missouri statute specifically addresses failure to pay sales representative commissions, and provides liability to an employer in a civil action for actual damages if that employer fails to pay all outstanding commissions. Per the commissions’ statute, when the contract between a sales representative and a principal is terminated, all commissions then due shall be paid within thirty days of such termination. Any and all commissions which become due after the date of such termination shall be paid within thirty days of becoming due. The statute further provides: “Any principal who fails to timely pay the sales representative commissions earned by such sales representative shall be liable to the sales representative in a civil action for the actual damages sustained by the sales representative and an additional amount as if the sales representative were still earning commissions calculated on an annualized pro rata basis from the date of termination to the date of payment." That same statute also allows employees who were not paid their commissions additional damages including attorney fees and costs. You should consult a lawyer to undertsand how the rules may apply to you. The subject of commisions can be tricky. If you believe that commisions you earned were unfairly withheld, you should consult a lawyer to understand how the rules may apply to you.

Zachary Avina | Nov 15, 2019

California's AB 51 Prohibits Employers from Using Mandatory Arbitration Agreements for Employees

SUMMARY OF AB 51 Primarily, AB 51 restricts employers from unilaterally requiring their employees to arbitrate, mediate, or otherwise control the manner and forum of a dispute, as a condition of hire, continued employment, or the receipt of an employment-related benefit. Additionally, AB 51 prohibits an employer from threatening, retaliating, or discriminating against, or terminating any applicant for employment or any employee because of the employee’s refusal to consent to the waiver of any right, forum or procedure. However, the legislature did exempt certain employment-related agreements from AB 51’s broad scope. Post-dispute settlement agreements and negotiated severance agreements can still contain language requiring arbitration, mediation, or the like for disputes arising under these types of agreements. CONSEQUENCES OF VIOLATING AB 51 Most alarmingly, the legislature expressly makes it a misdemeanor for an employer to violate AB 51. Furthermore, violations of AB 51 are also subject to injunctive relief and statutory penalties defined elsewhere in the Labor Code. Thus, if an employee or former employee sues an employer under this law, all or some of these consequences can befall the employer. CONCLUSION Although AB 51 should be taken seriously, it is unclear how long this new law will remain in effect. Certain aspects of AB 51 are at odds with Federal law and may be struck down; however, this judicial process would likely take years to complete. In the meantime, California employers should consult with an attorney to correct their employment paperwork and ensure full compliance with AB 51. Too much is at stake.

Ralph A Powell | Nov 13, 2019

Non-Competes With Restrictions/Clauses You Should Never Sign

Wording that I have seen that you should have changed or look elsewhere for work 1. "If you break this contract and we [employer or staffing company] sue you you will pay our legal fees and cost." 1. A. Possible rewarding, "If you break this contact and we sue you, the party that loses will pay all legal fees and cost." [still if you are up against a large company, they can squeeze you because there are no guarantees you will win even if you are in the right."] 2. If you leave our company, we want to know where you are going, title, and the type of work you will be doing. 2. A. In reality the company you are going to will have you sign a confidentiality agreement so it is impossible for you to conform to that requirement to tell your old company everything. 3. If you breach this agreement, you will pay us one year's pay. The reality is that a staffing company is only making about 10% as profit based on your pay. However, if you sign it, some judge may enforce it. 4. If you breach this agreement, you will pay is $100,000 (or $50,000). This is known as liquidated damages and it must bear some resemblance to actual damages. But it could cost you $20,000 in legal fees to prove that. 5. You cannot work for any competitor. (Now you can't work anywhere with you skills.) 6. You cannot work for a competitor within 100 miles. (now you have to relocate) 7. The term of not working with a competitor or anybody is three years. (that is long time and some courts might enforce that. Go for a shorter time or look elsewhere.) 8. We can hold you last paycheck. ( to make sure you are not going to a competitor.) If you sign it, especially if you are an international worker, guess what, you are unlikely to ever see that money.) 9. At an exit interview you may be asked to sign a "new" non-compete. I saw it. And the company threatened the employee. The employee did not sign it. There are some technical issues as to why that most likely will not stand up in court, but again, you may have to spend $20,000 to defend it. 10. You cannot work for any company that we might have an interest in, in the future. [What does that mean??? [Might cost you $15,000 to find out in court even if you win.] So what should I do about signing a non-compete? Invest between $300 and $500 in a lawyer to review it and explain it. If the employment agreement is 39 pages long [the longest I have seen to date] maybe $800. The tech industry and banks have the longest. I have seen a non-compete written on a piece of paper that was one paragraph and 5 lines long. It failed to be enforceable because they gave no consideration for signing it. It would be valid though in some states as continued employment is consideration, but not all states. The employee was already on-board for a year. One last word about type of worker. Employee or Independent Contractor and last word If you are going with a staffing company and you are there for years with them, you would be a W-2 and receive benefits. If you are there on an off for "spot" assignments, maybe you are a contractor. If you are being hired by a regular company and they say, we are going to make you an Independent Contractor for 90 or 120 days, that is a BIG RED FLAG. Either you are doing work as an employee or you are not. At the worst, have in your contract that at 90 days I become an employee. NEVER SIGN AN EMPLOYMENT CONTRACT ON THE DAY IT IS SHOVED IN FRONT OF YOU HAVE AN ATTORNEY REVIEW THE CONTRACT THAT PRACTICES IN THE STATE YOU WILL BE WORKING IN OR A LAWYER THAT PRACTICES IN THE SECTION THAT SAYS WHICH STATE LAW WILL BE APPLIED.

Regina M. Campbell | Nov 3, 2019

10 Key Elements of a Solid Employee Contract

Terms of Employment: Generally, the terms of employment include how long the employee will be employed. For freelance or contract positions, this might mean for a specific amount of time or until a project is complete; for more traditional employment, this often means indefinitely or until either party terminates the employment relationship. Employee Responsibilities: One of the most varying parts of an employment contract is the section detailing employee responsibilities. This is because every job is different; therefore, the expectations for each position differ. For example, a construction contractor’s employee responsibilities aren’t the same as a salesperson’s responsibilities. Employee Benefits: Benefits can range from health and life insurance to disability pay and retirement plans. Sometimes, employment benefits include purchasing and/or owning stock in the business. Employment Absence: Most often, employment absence includes factors such as sick days or personal leave and vacation time. Dispute Resolution: Such resolutions might include methods such as mediation or arbitration to solve disputes between an employee and employer. Nondisclosure Agreements: These agreements prevent employees from sharing a company’s business secrets, such as trade information or client lists. Ownership Agreements: Simply put, an ownership agreement means anything produced by the employee while employed by the employer becomes property of the business. Assignment Clauses: Similar to ownership agreements, assignment clauses basically mean any patents obtained by the employee during his or her employment are assigned to the business. Employment Opportunity Limitations: Many employee contracts include clauses that prevent the employer from limiting the employee’s potential future job prospects should the employer terminate him or her, or should he or she decide to leave the job. Termination: Each employee contract should clearly define all possible grounds for termination.

Regina M. Campbell | Oct 7, 2019

How to Properly Terminate an Employee in Florida

Document Each Stage of the Termination You can justify your termination by documenting. From the moment you notice you have an issue with your employee, you will want to start documenting all communications with that employee, their work issues, and keep performance reviews in a folder. If there are any coaching and extra training sessions issued to help and keep the employee on par, you will want to document those as well – because this will show that you did what you could to help the employee stay. Communicate Concerns Clearly Wrongful termination lawsuits typically happen because an employee did not realize there was anything wrong; therefore, they are terminated without reason. If an employee is in danger of losing his or her job, do not try to sugar coat it or avoid telling the employee. Instead, let them know what issues you have and possibly ways to correct it – giving the employee a chance to redeem themselves. Also, by discussing specific issues you have with them, you have more proof when it comes to justifying a termination if one occurs later on. No matter what, make sure you inform the employee immediately after an issue arises so that they have adequate time to correct it. Take Steps to Protect Your Business Once you have done everything you can to help that employee, and they have not improved within a fair timeframe, it may be time to terminate the employee. Before you actually start the termination process, make sure your reasons for the termination do not violate state or federal law. If you are unsure, consult an attorney. Some reasons that can violate the law include pregnancy, gender, age, or other types of discrimination. Make sure that you gather all documentation that supports or justifies your reasons for the termination. You will want to sit down with the employee with all of your documentation and discuss why you are letting them go. Show them performance reviews, the opportunities to improve that you have provided, and how they have not improved since then. You will want to give all of the details and not be ambiguous about the fine points. The broader you are, the more confusion that the employee may have – and the higher chance for a wrongful termination. Do Not Argue If the employee pleads or argues with you, do not engage. Simply state your facts and terminate the conversation. It is best that you have a witness there – but not a peer employee. You should have a member from your human resources department or another manager present for the termination. Having an employee’s peer present could be a violation of their rights. Cut all employment ties right away. That includes gathering any information, badges or parking passes the employee may have. If the employee has a login code, you will want to have your IT department change that or deactivate it immediately so that they no longer have access. Allow the employee to clear out their personal belongings, while supervised, and escort them to the doors. By preparing for the termination ahead of time, you can reduce the likelihood an employee will be able to sue. While no one can predict the behavior of a terminated employee, having a employment law attorney present can help your termination.

Helena Kempner Kobrin | Oct 4, 2019


Until April 2018, the 11-factor balancing test in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (California Supreme Court) had long applied to classifying workers as employees or independent contractors. That court then dramatically changed the rules in Dynamex Operations West, Inc. v. Superior Court. See, Independent Contractor Status in California Now Falls Under Radically Different Rules (June 2018). Now, a hiring company could only treat a worker as independent if the individual met three criteria: (A) the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) the worker performs work that is outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity. Confusion followed since Dynamex’s “ABC” definition only applied to the reach of state minimum wage, overtime, meal and rest break and other related rules, with the 11 Borello factors remaining for contractor/employee distinction on all other issues, for example workers’ compensation protections and unemployment benefits. Assembly Bill (AB) 5 -- most of which is scheduled to go into effect January 1, 2020 -- is state government’s attempt to more uniformly apply the Dynamex “ABC” test, including to work comp and unemployment. Yet, true to the legislative process, the new law is full of available exemptions for certain occupations and industries: • certain medical professionals, licensed lawyers, accountants, enrolled agents, architects, engineers, and private investigators; • insurance licensees, securities broker-dealers and investment advisers; • direct salespeople, marketers, human resource administrators, travel agents, payment processing agents, and grant writers, real estate licensees, and repossession agencies; • graphic designers, fine artists, certain photographers or photojournalists, and certain freelance writers, editors, or newspaper cartoonists; • licensed cosmetologists, barbers, estheticians, and manicurists; and • licensed construction contractors that have licensed subcontractors. Another possible exemption is a business hiring another business to provide work directly to the hiring business and not to its customers. In suitable circumstances, this may apply to the software industry for example. Those covered by these exemptions still must meet the Borello factors to claim legitimate independent contractor status. While many commentators are pointing to the potentially devastating effect of AB 5 on the so-called “gig economy,” the law will also seriously affect many other industries, trucking prominent among them. Already at work helping companies with implementation, we will be supplementing this overview with additional articles on specific industries or features of the new law. See also: • Making Dynamex Retroactive (May, 2019) • Independent Contractor or Employee? (April, 2019) • Independent Contractor Status? It Depends (November, 2018) For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin. Helena Kobrin October 4, 2019