Employment contract with no termination clause. Need help

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Latest post Fri, Sep 21 2012 4:55 PM by ca19lawyer2. 16 replies.
  • Wed, Sep 19 2012 9:48 PM

    Employment contract with no termination clause. Need help

    Hi,

    I'm stuck in an interesting situation, being a first time business owner. I signed an employment contract with an employee - the contract is very incomlete in that all it says is the start and end date (it's for a year), and salary that should be paid to the employee every week. There is no termination clause, no job duties or expectations.

    I am now regretting my decision terribly. Since the contract is so vague, is it still binding? If I were to terminate the contract with the employee, would I still be liable for the full amount that is to be paid to the employee for the entire year that the contract is signed for, even though the business is doing terrible? I had to get another job just so that I could pay him (and he only brings in enough money each week to make sure his weekly salary is met - so it pretty much goes straight from client to him). Any advice would be greatly appreciated. 

    Thanks,

    Jenn

  • Wed, Sep 19 2012 10:03 PM In reply to

    • cbg
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    Re: Employment contract with no termination clause. Need help

    You'll need to have the contract reviewed by an attorney in your state. We can't assess the enforceability of a contract we have not read.

  • Wed, Sep 19 2012 10:06 PM In reply to

    • DPH
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    Re: Employment contract with no termination clause. Need help

    JennyMarshall:
    Since the contract is so vague, is it still binding?

    Chances are good that it is binding and if you wrote the contract the burden is on you if you messed it up.  In other words, a judgement could go to the other party if you were remiss in drawing up the contract.  Take it to an attorney for review.

     

     

    "Never argue with stupid people, they will drag you down to their level and then beat you with experience."  -  Mark Twain

     

  • Wed, Sep 19 2012 10:08 PM In reply to

    Re: Employment contract with no termination clause. Need hel...

    Thank you for your quick response. I'm actually working with an attorney in NY right now - I came across this board and thought I'd see if someone could give me their 2 cents. But I guess you'd have to see the contract first....

    I wasn't sure if it was worth it to spend thousands of dollars on an attorney, if my contract, which has just the start and end date, and salary amount information, didn't even qualify for being a real contract. 

  • Wed, Sep 19 2012 10:10 PM In reply to

    Re: Employment contract with no termination clause. Need help

    Given your description of the contract, it can't be very long.

    Why not post it here word for word in its entirety (leaving blank any identifying information) and you might get some helpful comments.

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Wed, Sep 19 2012 10:12 PM In reply to

    Re: Employment contract with no termination clause. Need help

    I appreciate your suggestion, but I'm a little paranoid, and I don't feel too comfortable posting on the discussion board... :) 

  • Thu, Sep 20 2012 12:27 AM In reply to

    Re: Employment contract with no termination clause. Need help

    JennyMarshall:

    I appreciate your suggestion, but I'm a little paranoid, and I don't feel too comfortable posting on the discussion board... :) 

    Then it's to your attorney you go.

    :-)

     

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Thu, Sep 20 2012 6:04 AM In reply to

    Re: Employment contract with no termination clause. Need hel...

    I guess that answered my question then :) Thanks for all the feedback!

  • Thu, Sep 20 2012 8:56 AM In reply to

    • Drew
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    Re: Employment contract with no termination clause. Need hel...

    I'm a bit out of date on HR but my suggestions : 

    Your risks to post a sample docuement with names deleted,  for suggestions here are low --but not zero if others are reading your mail.

    Present or absence of an end date is usually a critical factor in determining if an employment agreement is a contract or just an nice letter --in your post it leans towards a contract  and the elements of a contract may well exist.

    To the extent that you crafted the contract and things are ambiguous the prevailing view may be that's your problem.

    If you breech the contract you may have a big problem.

    But that's not the only way to look at it.  In general you can work a salaried employee  ungodly hours -literally 24/7 subject to a few minimum wage  issues and issues as to if they are truly salaried exempt  --now I'm not suggesting you go to an overt extreme that has obvious intent to force a breech  --but if you instruct employee to show up a couple of hours earlier than previously and you hold him over a few extra hours  and come the weekend you require some Sunday work  and you assign some tasks that he doesn't like --and he refuses to show  or leaves after being direct otherwise and/or refuses the assigned tasks  have the table leaning your way --a no show or a walk out might well be a quit -breech on his part  .

    I've seen $100/hr equiv salaried staff with PhD's assigned de minimus duties normally covered by  $8hr hourly staff--so be it.  If a staff lawyer or accountant  is directed to tidy up the office including  washrooms and lock up --she/he better do as directed!

    I've seen a salaried person given a directive to get these 15 tasks done , stay until you have finished same

    I've seen staff person direct to report at 7AM at obscure outpost # 6 or to report for unspecified duties (janitorial) at 6PM.  

    How far you can push it is a bit of an art but you can make things very uncomfortable for staff w/o treading into  hazardous workplace issues.  If they blow up and quit--eureka    I've seen people give the boss an obscene salute and walk out over the strangest of issues.   eureka.

    I've also seen some totally nonproductive staff just sit there collecting paychecks because the boss was afraid to act...so be it.



  • Thu, Sep 20 2012 11:25 AM In reply to

    Re: Employment contract with no termination clause. Need help

    What I'm curious about is why you'd enter into a a fixed-term contract in the first place (unless a high-powered executive/management position, and that doesn't seem to be at all the case).

    I'd like to think it wasn't between you and he as an individual, but I'm scared that it was. 

    There's a concept called impossibility to perform, even if the contract is in your name as an individual vs. a corporate entity.  If the business concern goes under, that doesn't necessarily mean you still owe him money.

    Please consult with local business/corporate counsel.

  • Thu, Sep 20 2012 11:45 AM In reply to

    • Drew
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    Re: Employment contract with no termination clause. Need help

    Give us some clues as to what this person is supposedly hired to do and what he is in fact doing.



  • Thu, Sep 20 2012 10:06 PM In reply to

    Re: Employment contract with no termination clause. Need hel...

    Initially, since I was very new to the industry, he was hired as a "consultant" because he has worked in the industry for many years (and he was also the previous owner of the business) - but what he does is basically saleswork (since he knows the business so well).

    I'm realizing that even with him on board, he only brings enough to cover his salary (plus he gets commission on certain jobs - plus I pay him extra if he works extra jobs during the weekend and also reimburse for gas - we were on really good terms, and at that point I didn't really care if he was taking advantage of the situation - I've been realizing that he's REALLY been walking all over me). So at the end of the day, the amount from whatever sales he brings in goes to him, and if he doesn't bring in enough sales each week, I have to put in money to cover his salary (and hence why I got another job). If I didn't have him on the team, I could easily make a profit from the sales that I myself do.

    Writing all this down, I realize what a terrible hole I've dug myself into. My attorney has been really helpful actually. But I'm definitely finding all the advice on this board very helpful - for example, since the contract doesn't specify job duties, that could technically work in my favor. Thanks everyone. Any advice/suggestions is much appreciated.

     

  • Thu, Sep 20 2012 10:16 PM In reply to

    • Drew
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    Re: Employment contract with no termination clause. Need hel...

    So there is nothing to prevent you from instructing your employee to report to the office at 6 am and clean windows, retuen at 6 pm and sweep floors and complete papser tasks A thru Z and then come in for  3 hours each on Sat and Sum for other tasks you have engineered.

    Why is he not bringing in enough business --not enough time/call --workering for another on the side --whats up?



  • Thu, Sep 20 2012 10:42 PM In reply to

    Re: Employment contract with no termination clause. Need hel...

    He only books sales if the phone rings.... his contribution to sales ends there. :-/ so he doesn't really bring the business - he just works on following up/booking the calls.

    But I do like your suggestion.

  • Fri, Sep 21 2012 7:49 AM In reply to

    • Drew
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    Re: Employment contract with no termination clause. Need hel...

    Wel I think part of the problem is that you are not laying out enough work to do and direction.

    Now it might be productive if you sort out w or w/o his input things that can be done to generat new business --its not entirely his fault if he just sits there--its up to you as boss to lead--some folks are not self starters --some need a boost to get started--its up to you to sort out what it takes to make this guy truly productive.

     

    Now if he is bent on sitting there like a mushroom re sales development--then I suggest Plan B--pile on wads of clear directed tasks so as to seek to force changes.

    What product or service do you sell

    What things can be done to reach out for sale or leads or get the phone to ring more? .

    He may not be excited about a business that is going nowhere --and the fact that you are working elsewhere suggests you have some issues too ----get back excited about your own busines and make it grow....



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