subject: Be Clear and Concise When You Hire [print this page] Author: Marijo McCarthy Author: Marijo McCarthy
A client called me recently to tell me his company was growing and that he needed to re-hire some staff he had laid off the previous year. Given his current growth and the possibility of additional expansion in the coming year, he thought it was time to brush off the company's hiring letter and discuss the use of an agreement to protect the company's property, both tangible and intangible, for key staff.
Good news, I thought, particularly in this economy. Plus, he was to be commended for thinking ahead and focusing on how best to articulate the employment and benefit terms for his re-hires.
When he sent along his current hiring letter, it was immediately clear that some updating was in order. On first review, three red flags jumped out: 1. The offer letter referred to "employment contract." Uh oh! My client had no intention of offering an employment contract to a new employee. Rather, he contemplated "at will" employment and had simply overlooked the implications of these words in the draft.
As a fix, the first sentence of the letter might read: "We are pleased to confirm our offer to you of at-will employment in the position of XXX." 2. The offer letter referred to employee benefits which included "80% employer-paid health insurance." While the company does indeed currently provide such benefits, what happens if it needs to cut that back to a lesser percentage in the future? Particularly given the annual, double-digit increase in the cost of this benefit that we are all experiencing, my client ought to reserve the right to adjust the amount going forward.
The solution here would be another sentence: "Health care benefits are included with a current company contribution of 80%, although benefit policies and contribution levels are subject to change, at the discretion of the company." 3. The offer letter made employment contingent on the employee signing an agreement to be provided in the future not to disclose confidential information belonging to the company. Hmm! I could see that we needed to get that nondisclosure agreement drafted post-haste and make it an attachment to the offer letter.
Here, we might add a final sentence which reads: "You will be required to sign the non-disclosure, confidentiality, and non-solicit agreement which is attached to this offer, as you will be privy to sensitive documents belonging to both the company and the company's clients in the ordinary course of carrying out your duties." Remember, as with every other document you sign, an offer of employment is a contract (although as stated earlier, not necessarily an employment contract!). So handle it carefully. A well-drafted, updated offer of employment will set the stage for your company's policies and procedures, and let the applicant know that the company makes those policies and procedures clear from day one. A poorly-drafted offer letter, by contrast one that is filled with misinformation and ambiguous promises can only lead to trouble down the road.
If you do one thing for your business before your next hire, pull out those hiring documents, dust them off and get ready for the first new employee of the coming year. The information you obtain here is not, nor is it intended to be, individual advice by a lawyer. You should consult with your own lawyer for individual advice regarding your own situation. Copyright 2009 Widett and McCarthy, P.C. About the Author:
Marijo McCarthy is principal of Widett and McCarthy, P.C., a Boston area law firm that helps Massachusetts small business owners build successful companies, one contract at a time.
