Being savvy business people, executives usually know what key provisions to look for in employment agreements, such as the compensation and non-compete terms. But employment agreements usually contain other provisions that may appear to be minor, boilerplate terms. An executive should understand these terms and how they could impact the employment relationship before entering into an agreement.
An employment agreement may contain a forum selection provision and a choice of law provision. These provisions govern where the dispute will be litigated (forum selection) and which state’s laws will be applied (choice of law). Forum selection is particularly important when an executive contemplates accepting a job outside corporate headquarters; the difficulties involved in litigating a matter in another state could seriously deter litigation efforts. The parties’ choice of law impacts litigation as well. For example, the enforcement of non-compete agreements varies considerably by jurisdiction.
An employment agreement may contain a jury waiver clause or an arbitration clause. A jury waiver clause requires the parties to try the case before a judge and an arbitration clause requires the parties to bypass the judicial system altogether. These options have both positive and negative consequences, and an executive should consider these consequences before signing an agreement.
The attorneys at the Dallas, Texas employment law firm Clouse Dunn Khoshbin LLP regularly draft and negotiate employment agreements. To speak to an employment attorney about an employment agreement, please contact the employment lawyers at [email protected].
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KEITH A. CLOUSE
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