At times, employers and employees enter into written employment contracts. The contract may be negotiable, or it may be a take it or leave it option.  It is important for you as an employee to understand the employment contract because it may have severe consequences on your earning capacity and/or what you are owed at the time of resignation or dismissal.  Here is a list of things to look for when signing an employment contract.

  1. Employee or Independent Contractor – Your contract will tell you if the employer is hiring you as an employee or as an independent contractor. While the contract designation may not necessarily be binding on the parties, it is something that should be addressed initially with the employer. The rights of an employee may vary drastically from the rights of an independent contractor.
  2. Payment Provision – The contract will tell you how you will be paid: hourly, salary, or by project. While salary and project basis pay may seem ideal, you should calculate how much time it takes to perform your job.    Also, be mindful of incentive structures and whether they are attainable.
  3. Termination Provision – You should look to see how you will be paid at the time of termination. If you are in sales or a bill for work profession, does the contract allow you to get paid for work that will not be collected for several months, or does your contract stop payment to you at the point of your dismissal or resignation?
  4. Non-Compete Agreement – If the contract has a non-compete agreement, you should check to see how long and how far the non-compete agreement extends. Although some non-compete agreements will be unenforceable if found unreasonable by the court, it will take time and money for you to fight this rather than address it when signing the contract.
  5. Mandatory Mediation Agreement – Some employment contracts have a mandatory mediation agreement. This means that an employee must first take their claim to a mediator before they can take their claim to the court.  The agreement may also specify that the parties will split the cost of mediation which can be very expensive.
  6. Exclusive Employment Agreement – This restricts employees from concurrently working for or having ownership in any similar business that is in competition with the employer.

These and other employment contract provisions may have lasting consequences on your life.  Bring your employment contract to the Employment Law team at Udall Shumway PLC.  We can help you determine if the employment contract is right for you.

This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Signing an Employment Contract, or any other personal injury, please feel free to contact Employment Law Attorney Brad Gardner at  480.461.5323,  log on to,  or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.