Image Licensing Protections: An Introduction

Beware Of Restrictive Clauses In Employment Contracts

20 January 2018

Judy Alexander

Have you recently been offered a job? Are you still on the search for the right opportunity? Whether you're already considering an offer or still looking, you need to exercise some serious caution before you sign any sort of employment contract. 

Otherwise, you might find yourself subject to clauses that restrict your life and career even after you move on to bigger and better things with another company sometime in the future. Here's what you should know.

Examine All Employment Contracts Carefully

Employment contracts can range from fairly simple to incredibly complex, but they all tend to favor the employer. That makes it important not to skim over the contract and sign on the dotted line. Take the time to read every part of the deal. If necessary, consider consulting an attorney before you make the agreement if you need a better understanding of what any clause means.

Be Cautious Of Restrictive Clauses

Restrictive clauses are any part of an employment contract that restricts what you do for a living or where you do it. Some are less restrictive than others, however.

It's generally not unusual for employers to restrict the outside employment (or "moonlighting") of their employees, especially in the same field. Many employers will allow moonlighting only in unrelated fields or require the employee to get permission before he or she starts any second job. Those kinds of clauses are seldom a serious concern.

Instead, you need to watch out for clauses in the contract that go into effect once you leave the company, whether voluntarily or not. The ones that can be most troublesome for professionals include the following:

1. Non-compete clauses. These prevent you from pursuing your career within the same industry as your former employer. They may restrict you from only working in a certain area, which you may find acceptable if you're highly mobile, but not so much if you have strong roots where you are. Others restrict you from picking up your career in the same industry (or even related industries) for a certain length of time. If you work in a time-sensitive industry, like technology, that could create a gap on your resume that makes it hard to find employment.
2. Non-solicitation clauses. These prevent you from "poaching" a former employer's business contacts. While that might not sound so bad at first, that non-solicitation clause might not just be limited to your former employer's clients. It also can apply to your former employer's suppliers, which could be problematic if your industry relies on a limited number of suppliers. It can also prevent you from leaving with another employee, even if you both want to go into business together somewhere else.

An employment law attorney can help you clear up any ambiguities in the contract so that you know exactly what you are signing. An attorney can also tell you if your employer is asking too much; some non-compete agreements are illegal if they're too broad. In addition, the attorney can also sometimes help you negotiate a better deal. 

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