Online Legal Documents Give Bad Employment Advice

Posted by:

We are already at my last two posts about the online employment contract that I purchased through lawdepot.com. My first postings dealt with provisions — overtime and termination for “permanent disability” — that clearly violated the law (at least Minnesota law) and would be a really, really, really bad idea to include in an agreement. The last four provisions that I examined, deal instead with provisions that are just a really bad idea. A bad business decision, but not illegal. What does the lawdepot.com employment agreement suggest that you include? Let’s find out…

Really Bad Idea #1: Employer’s Right to Modify Benefits

The lawdepot.com employment contract establishes the right to only one week of paid vacation per year. It does not limit the employer’s obligation to pay out unused vacation time at the time of resignation or termination, which any good employment lawyer would recommend that a client insert into an employment agreement or into an employee handbook or manual. The contract also includes the following provision regarding an employer’s right to modify employee benefits:

All benefits provided by the Employer are in the Employer’s sole discretion and are subject to change, without compensation, upon the Employer providing the Employee with 60 days written notice of such changes to the benefits.

The agreement allows the employer to modify the benefits provided the employee with 60 days written notice. While written notice is always recommended, 60 days needlessly hinders an employer’s ability to modify the employment relationship which, under the terms of employment at-will, can be done at any time and without prior notice.  While such a provision is certainly not illegal, like the provision regarding overtime or termination in case of permanent disability, it is not good legal advice and not a good business practice.

Really Bad Idea #2: Terms of Non-Compete Provision

Non-compete agreements are so in fashion these days.  In keeping with this trend, lawdepot.com allowed me to select a non-compete provision for my employment contract. Of course no consideration was given to the fact that the position I was going to fill was a legal assistant, a position for which a non-compete would be irrelevant. Not many clients of law firms follow a legal assistant to another firm. Regardless of this, I chose to subject my imaginary employee to a 3-year non-competition provision, according to which the employee agrees not to be “directly or indirectly involved with a business which is in direct competition with the particular business line of the Employer.” The site gave me the choice of making the non-compete in effect for up to 5 years. However, it didn’t allow me to choose a geographic extension for the non-competition. Thus, according to the non-compete agreement in my lawdepot.com employment contract, my fictitious legal assistant cannot work for a competing law firm anywhere in the world for 3 years after leaving my firm. Clearly, such a provision would be unenforceable.

In Minnesota, a non-compete agreement has to be reasonable in both geographic and temporal extension in order to be enforceable. Even if reasonable for these two terms, courts will also examine the nature of the position and the business interests at risk before determining whether or not it will enforce the non-competition agreement. There is no clear-cut rule of when a non-compete is reasonable. That being said, it is almost certain that no court would enforce a three-year non-competition on a legal assistant. It is too restrictive of an individual’s right to earn a living, an interest that courts are clearly concerned about protecting.

What’s next? The last two provisions that I will look at involve termination with “just cause” and a really strange provision that deals with working as a consultant after leaving the job for which the employee has signed the agreement. Stay tuned…it should be posted on Friday.

1