Many types of contracts can be arranged between the employee and the employer. As an employee, you should ensure your needs and interests are protected in these contracts. Heimerl & Lammers Minnesota employment law attorneys can help ensure your interests are protected just as we have done for countless individuals over the years. Our lawyers have extensive experience in negotiating employment agreements, including non-solicitation agreements, non-competition agreements, sales commission agreements, and more. Reach out to Heimerl & Lammers by calling (612) 294-2200.
Types of Employment Contracts
Depending on the job you have and the industry in which you work, there are many types of contracts you may enter with your employer. They may be contracts that you have to sign to become employed there, or they may be voluntary agreements. Regardless, you should make sure you read and understand the terms of the contracts before you sign them. Any of these clauses could be combined with other clauses to create a full employment contract, or some of them may be a standalone agreement you have signed with your employer. This list includes many commonly found types of contracts or agreements between employees and employers.
- Permanent employment contracts
- Fixed-term employment contracts
- Non-Compete agreements
- Sales Commission agreements
- Severance agreements
- Consulting agreements
- Independent contracting agreements
Many of these contracts and agreements will be modified to fit each specific industry that uses them. Depending on the industry you work in and the type of position you hold, you are likely to experience multiple types of these contracts and agreements.
How Do Contracts Work?
A contract is an agreement between two people, or two parties (for example, an agreement between an employee and a company). Many are usually in writing, but verbal agreements can also be considered legally binding contracts. Contracts constitute a “meeting of the minds,” or a clarified agreement between parties. For a contract to be legally enforceable, the following elements must be met: (1) offer and acceptance, (2) adequate consideration (in this context, “consideration” means something of value exchanged), (3) capacity (each party must be mentally and legally able to enter into a contract), and (4) legality (you cannot form a valid contract for an illegal purpose.) A breach of contract occurs when one of the parties to the contract—in employment law, the employee or the employer—does not fulfill their obligations under the agreement. However, before an attorney can assess if a contract has been breached, first they assess whether or not a valid contract existed.
Elements of Breach of Contract
In Minnesota, a breach of contract must consist of four elements: validity, performance, failure or breach, and damages. As discussed above, the contract in question must be valid to exist—if the contract in question is not valid, it is impossible to breach it. This is a core issue in many non-compete contracts. Employers often require employees to sign invalid non-compete agreements and then intimidate employees against violating the invalid agreement. An attorney can review these types of agreements and ascertain validity.
The second element, performance, hangs on the performance of the plaintiff (the plaintiff is the party claiming the contract was breached). The plaintiff must have held up their end of the contract, whether that be payment or performance, before claiming the other party breached the contract.
Next, the third element of a breach of contract claim is that you must show the defendant did not hold up their end of the deal or breached the contract. If your employer failed to follow a duty outlined in the contract, they have breached the contract.
Finally, you must show that you were damaged by your employer’s breach of the contract. Damages can be shown in a number of ways. It could be monetary damages or physical damages. An attorney can help you determine the type of damages you have suffered and will include them in your lawsuit accordingly.
What Is an Employment Contract?
In Minnesota and across the United States, most employees are at-will employees. This means that employers can terminate employees at any time with or without cause (there are some exceptions to this rule, including, but not limited to, discrimination). An employee can also leave their position at any time, but, in some positions, you may be required to sign an employment contract. The medical and education professions both continue to use employment contracts as a matter of course. An employment contract is a signed agreement between an individual employee and the employer. The contract usually puts in writing the rights and responsibilities of each party. In contrast to at-will employment, an employment contract can give all of the involved parties more stability if neither party can terminate the agreement without notice.
When looking at an employment contract, you will likely see the following terms:
- Duration of employment
- Salary or wage amount
- Sales commissions agreements
- General responsibilities
- Confidentiality agreements
- Non-Compete clauses
All of these terms will likely be set and given to you for review when you are offered a contract. You may be able to negotiate some of the terms, but the employer will likely write the contract to benefit themselves. So, the terms may not be very favorable for you, the employee. To better understand an offered employment contract, attorney review of an agreement will give you peace of mind as to what the contract says and how it can potentially affect your employment. Heimerl & Lammers Minnesota employment law attorneys have extensive experience in reviewing and negotiating employment agreements. Reach out to Heimerl & Lammers by calling (612) 294-2200.
What Is a Non-Compete Agreement or Clause?
A non-compete clause is a commonly-found clause in employment contracts. These agreements may be a short paragraph or two, or they may even be an entirely different agreement that you are required to sign when you accept or start your position. The timing of when an employer asks you to sign a non-compete agreement affects the validity of the agreement. If you have questions about a non-compete agreement that your employer has asked you to sign, please contact an attorney to discuss your options.
Non-compete agreements are designed to protect employers from the loss of sales accounts and customers. A non-compete clause restricts an employee from accepting certain types of jobs within a certain geographic area within a certain time period. For these agreements to be valid, they must place restrictions on the area where an employee can accept another job and the area in which they are allowed to work. Courts disfavor non-compete agreements because the undercut the basic principles of capitalism and often unnecessarily restrict people from being able to work and provide for their families.
Will a Court Enforce the Agreement?
To determine if an agreement is reasonable, a court will look at the agreement and analyze the following factors based on your specific case. A court may place a higher weight on certain factors than others and make their determination based on the specific industry.
The factors used are:
- Does the employer have a legitimate interest that is in need of protection?
- How long (in years) is the agreement restricting your job options?
- What is the geographic area that the agreement restricts? Can you still make a living doing that job in that area?
- Does the agreement keep the work that you are prohibited from doing very close to the work you performed for the company?
- Did you receive additional compensation or other benefits for signing the agreement?
In Minnesota, if your agreement is held to not be enforceable, a court will likely not change the agreement to protect the employer. Courts in Minnesota generally disfavor non-compete agreements in general, so if you feel your non-compete agreement is not allowing you to find another similar job and you wish to fight it, we have many avenues to show that it will not be enforceable. Heimerl & Lammers Minnesota employment law attorneys are skilled in reviewing non-compete agreements and representing employees who have received legal threats from former employers. Reach out to Heimerl & Lammers by calling (612) 294-2200.
Sales Commission Clauses
If you work in an industry where you are selling goods or services for your employer, you may receive a commission from your sales. Many salespeople are exclusively paid by commission. In many cases, determining if a sales commission clause will be enforceable when you are leaving the company will be a difficult task.
In Minnesota, both independent contractors and employees are entitled to their earned sales commissions if they are fired, quit, or resign. Employers who terminate salespeople and withholding wages and commissions face legal penalties. An employment attorney can help you analyze the agreements you have already signed and assist you in coming up with a plan to maximize your commissions while still leaving the company.
In addition to disputes about earned sales commissions, salespeople often face breach of contract disputes with employers who refuse to pay the employee pursuant to the agreement. Heimerl & Lammers Minnesota employment law attorneys are experienced in litigating breach of contract claims regarding sales commission. If you feel that you are owed earned sales commission and your employer refuses to pay, reach out to Heimerl & Lammers by calling (612) 294-2200.
How Do I File a Claim against My Employer?
When you get to the point that you feel one of your employment agreements or contracts has not been honored by your employer, you may be wondering how you can go about filing a claim against them. Understanding the nuances in your case can be a difficult task.
A skilled employment law attorney can advocate for you. A lawyer can help you analyze your contracts and agreements, provide an opinion as to whether your contract is valid and will stand up in court, and help you file a claim against your employer. An attorney can help you rest easy by knowing your claim will be taken care of properly.
The attorneys at Heimerl & Lammers will review the unique facts, agreement, and circumstances of your situation, walk you through your case, and help you understand the best path forward to recovery. Once an attorney reviews your case, they may decide the best step is to start negotiations with your employer to settle the matter outside of the court system. This will reduce the amount of time it will take to get your compensation, and in settlement, you will avoid the risks and time of trial. By trusting an experienced attorney with your employment contract and agreement issues, you will be able to have confidence that you have the best team on your side to advocate for you.
Minnesota Employment Contract Lawyers
As an employee, you will likely be asked to sign agreements throughout the course of your employment. Your employer has written these agreements to benefit themselves. Call us to have an attorney on your side to review your contracts. Heimerl & Lammers Minnesota employment contract lawyers will strive to ensure your employment agreement is fair and fully serves your interests. Call to schedule an appointment with us today by calling (612) 294-2200.