Employment law

Core Categories of Operative Provisions:

Here is a comprehensive list of what to include, categorized for clarity, with explanations on why each is critical for your business.

1. The Basics of the Relationship

• Position & Title: Clearly state the job title.
• Duties & Responsibilities: Describe the role's essential functions. Include a flexibility clause (e.g., "and other duties as assigned").
• Location: Specify the primary place of work (e.g., "Company's principal office in Newark, NJ"). Crucially, include a mobility clause stating that the employee may be required to work at other client sites or locations as needed.
• Reporting Structure: Identify who the employee reports to.

2. Compensation & Benefits

• Base Salary: State the annual salary and the payment frequency (e.g., bi-weekly).
• Bonus/Incentive Compensation: Detail any potential bonus structure. Clearly state that it is discretionary, performance-based, and subject to change unless guaranteed.
• Benefits: State eligibility for standard benefits (health insurance, 401(k), etc.). Include a clause that the company can change or terminate benefit plans at any time.
• Expense Reimbursement: Outline the policy for reimbursing business expenses, requiring timely submission and adherence to company policy.

3. Confidentiality & Protection of Assets (Critical for a Tech Firm)

• Confidentiality (NDA): A robust clause defining what constitutes "Confidential Information" (client lists, source code, business plans, financial data, etc.) and the ongoing obligation to protect it, both during and after employment.
• Intellectual Property (IP) Assignment ("Inventions" Clause): This is non-negotiable. It must state that any work, invention, code, design, or process the employee creates that relates to the company's business belongs entirely to the company. This applies during and sometimes even after employment.
• Return of Company Property: Obligation to return all company property (laptops, badges, keys, documents, etc.) immediately upon termination.

4. Restrictive Covenants (Use Carefully & Legally)

• Non-Competition: Limits the employee's ability to work for a direct competitor for a specific time and within a specific geographic area after employment ends. Note: Enforceability varies drastically by state (e.g., heavily restricted in California, requires reasonableness in NJ/NY). Must be narrowly tailored.
• Non-Solicitation of Clients: Prohibits the employee from soliciting or doing business with the company's clients for a period after termination.
• Non-Solicitation of Employees: Prohibits the employee from poaching other company employees for a period after termination. This is generally more enforceable than a non-compete.
• Non-Disparagement: A mutual clause where both parties agree not to make negative statements about each other.

5. Term & Termination

• At-Will Employment (If applicable): Clearly state that employment is "at-will," meaning either party can terminate the relationship at any time, for any reason (or no reason), with or without notice, so long as it's not an illegal reason.
• Termination for Cause: Define what constitutes "Cause" for termination (e.g., gross misconduct, breach of agreement, felony conviction, failure to perform duties).
• Termination Without Cause: Outline any required notice period or severance package that may be offered if termination is not for cause.
• Resignation: Specify the required notice period the employee must give (e.g., two weeks).

6. Post-Termination Obligations

• Cooperation: A clause requiring the employee to provide reasonable cooperation in the transition of their work and in any ongoing lawsuits or investigations after their departure.
• Survival: Explicitly state that key clauses (like Confidentiality, IP Assignment, Non-Solicitation) survive the termination of the agreement.

7. General Provisions (The "Boilerplate" that Matters)

• Governing Law & Jurisdiction: As we discussed, specifying that NJ law governs and any lawsuits must be filed in NJ.
• Entire Agreement (Merger Clause): States that this written document is the entire agreement between the parties, superseding all prior discussions and agreements.
• Severability: States that if a court finds one provision unenforceable, the rest of the agreement remains in effect.
• Assignment: States that the company can assign the agreement (e.g., in a merger or acquisition), but the employee cannot.
• Notices: Specifies how formal notices under the agreement must be delivered (e.g., via email, certified mail).
• Amendment: Requires that any changes to the agreement must be in writing and signed by both parties.

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Summary Table for a Tech Consulting LLC:

Category	Provision	Why It's Important
Basics	Title, Duties, Location, Reporting	Defines the fundamental scope of the job.
Compensation	Salary, Bonus, Benefits, Expenses	Defines the economic exchange. Prevents disputes over pay.
Protection	Confidentiality, IP Assignment	Protects your most valuable assets: secrets and code.
Protection	Return of Company Property	Prevents loss of physical and digital assets.
Restrictions	Non-Solicitation (Clients/Employees)	Protects client relationships and prevents talent poaching.
Restrictions	Non-Competition (Use cautiously)	Protects business interests. Must be reasonable.
Termination	At-Will Status, "Cause" Definition	Provides clarity and flexibility to end the relationship.
General	Governing Law (NJ), Jurisdiction	Ensures legal battles happen on your home turf.
General	Entire Agreement, Severability	Makes the contract predictable and durable.

Final Recommendation: While this list is comprehensive, do not copy and paste clauses from the internet. The specific drafting of each provision, especially restrictive covenants and IP assignment, is highly sensitive and must be tailored to your specific business needs and local (NJ) law. Consulting with an employment attorney is a crucial investment to ensure your agreement is both protective and enforceable.

Key Legal Considerations:

• Written Contract is Essential: A comprehensive, unambiguous written contract is absolutely vital. Verbal agreements are practically worthless in these situations.
• Independent Contractor Agreement: The contract should explicitly state the parties' intent to create an independent contractor relationship.
• Compliance with State and Federal Laws: The agreement must comply with New Jersey and federal wage and hour laws, tax laws, and anti-discrimination laws.
• Consult with Counsel: Both the LLC and the independent contractor should have their own legal counsel review the contract before signing. This is not an area for DIY legal work.

Disclaimer: This information is for educational purposes only and does not constitute legal advice. You must consult with a qualified New Jersey attorney to discuss your specific situation and ensure compliance with all applicable laws and regulations. This is particularly important in the context of a pre-revenue startup with tiered commissions. Don't cut corners on legal advice – it can save you significant headaches and costs down the road.

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• NON DISPARAGEMENT AGREEMENT

asking for email / phone

you must provide us with an email address that you regularly use and intend to use regularly (that is, no disposable email addresses) and a U.S. mobile phone number that you intend to use for an extended period of time (that is, no “burner” numbers).

Relevant Labor and Employment Laws

• Americans with Disabilities Act (ADA)
• Age Discrimination in Employment Act
• Fair Labor Standards Act
• Family and Medical Leave Act
• right to privacy in workplace

Software Dev Contract Provisions

• reasons why you don't own the code that you create

Software Dev Contract

Important provisions Some provisions impact software engineers more than others. While the totality of the contract should be carefully examined, in particular, be sure to keep an eye out for provisions related to the following:

• Non-competition
• Non-solicitation
• Non-disclosure
• Work Product Ownership
• Moonlighting
• Arbitration

If the business will have employees, entrepreneurs should be familiar with employment law and regulations, including minimum wage and overtime laws, anti-discrimination laws, and workers' compensation.

Job Descriptions

Not required by law, but it can effect legal matters, including when hiring.

• Discrimination Claims
  • if there is no job description, applicants can claim the job requirements changed
• job descriptions can document the consistent application of job requirements across job titles without regard to demographics
• Disability Accomodation process
  • essential job function (REGULAR ATTENDANCE)
• Exempt vs Non-Exempt
  • exempt - salaried, not eligible for overtime
  • ex: computer workers, executives
  • exempt employees are required to be paid a salary without regard to hours worked
  • dol.gov

legal agreements and contracts

Entrepreneurs should be familiar with contract law and have a basic understanding of different types of contracts, such as employment contracts, vendor contracts, and lease agreements. It is important to have clear and legally binding contracts in place to protect the business.

Contract Types

As a software development business, there are several legal agreements and contracts that you may need to have in place to protect your business and ensure that you are operating legally.

breakdown of the key differences between An employee offer letter and an employment contract

• the two are both important documents used in the employment process, but they serve different purposes and contain different types of information. Here's a

Employee Offer Letter

An employee offer letter is typically the initial document presented to a candidate who has been selected for a position. It outlines the basic terms and conditions of employment and serves as a formal invitation to join the company. Key characteristics of an employee offer letter include:

1. Job Offer: The offer letter states the position being offered to the candidate, including the job title, department, and reporting structure.

2. Compensation: It includes details about the candidate's compensation package, such as salary or hourly rate, bonuses, commission structures, and any other benefits or allowances.

3. Start Date: The offer letter specifies the proposed start date for the candidate's employment.

4. Employment Type: It clarifies the nature of the employment, such as full-time, part-time, temporary, or permanent.

5. At-Will Employment: In many jurisdictions, offer letters include a statement indicating that the employment is at-will, meaning that either the employer or the employee can terminate the employment relationship at any time, with or without cause.

6. Conditions: The offer letter may include conditions that need to be fulfilled before the candidate's employment can commence, such as background checks, drug tests, or providing necessary documentation.

7. Other Relevant Information: Depending on the employer and the specific circumstances, the offer letter may include additional information, such as probationary periods, non-disclosure agreements, or non-compete clauses.

Employment Contract

An employment contract, on the other hand, is a more comprehensive and legally binding agreement between the employer and the employee. It outlines the rights, responsibilities, and obligations of both parties during the employment relationship. The employment contract includes more specific and detailed provisions compared to an offer letter. Key characteristics of an employment contract include:

1. Terms and Conditions: The contract outlines the terms and conditions of employment in greater detail, including job duties, working hours, leave entitlements, performance expectations, and any specific obligations or responsibilities of the employee.

2. Duration: It specifies the duration of the employment, whether it is for a fixed term (e.g., one year) or an indefinite period.

3. Termination: The contract outlines the conditions and procedures for terminating the employment relationship, including notice periods, severance pay provisions, and any restrictions on termination.

4. Confidentiality and Intellectual Property: It may include provisions related to confidentiality obligations, intellectual property rights, non-disclosure agreements, and non-compete clauses.

5. Dispute Resolution: The contract may include a section outlining the procedures for resolving disputes that may arise during the employment relationship, such as arbitration or mediation.

6. Governing Law and Jurisdiction: It specifies the governing law and jurisdiction that will govern the interpretation and enforcement of the contract.

7. Amendments and Modifications: The contract may include provisions outlining how and when the terms of the contract can be amended or modified.

It's important to note that the specific contents of an offer letter or employment contract can vary based on applicable laws, industry practices, and the specific requirements of the employer. In some cases, an offer letter may be considered a binding employment contract if it contains all the essential terms and conditions of employment and is signed by both parties.

To ensure clarity and legal compliance, it is always advisable for both employers and employees to seek legal counsel or consult with an employment law expert when drafting or reviewing employment-related documents like offer letters and employment contracts.

contract clauses

There are several contract clauses that a tech start-up can include in their employment agreements to protect their intellectual property (IP) from being stolen or misused by their employees. Here are a few examples:

Non-Disclosure Agreement (NDA)

An NDA is a legal agreement between the start-up and its employees that requires the employees to keep certain information confidential. This can include trade secrets, proprietary information, and other sensitive data related to the company's IP. The NDA can also include non-compete and non-solicitation clauses that restrict employees from working for competitors or soliciting the company's customers or clients.

Intellectual Property Assignment Agreement (IPAA)

An IPAA is a contract clause that requires employees to assign all rights to any IP created during their employment to the start-up. This ensures that the start-up owns the rights to any inventions, designs, software code, or other IP that its employees create while working for the company.

Invention Assignment Agreement (IAA)

Similar to an IPAA, an IAA requires employees to assign ownership of any inventions they create during their employment to the start-up. However, an IAA is typically more specific and detailed, outlining the scope of the assignment and the types of inventions that are covered.

Confidentiality and Non-Competition Agreement (CNCA)

This type of agreement combines elements of an NDA, non-compete, and non-solicitation clauses into a single contract. It requires employees to maintain confidentiality, refrain from competing with the start-up, and avoid soliciting its clients or customers for a certain period of time after leaving the company.

No harmful & error-free code

• no intentionally added viruses, worms, trojans etc

A developer contract clause regarding no harmful code typically aims to ensure that the developer is obligated to deliver software that is free from malicious or harmful code that could cause damage to the client's systems, networks, data, or reputation. Here's an example of a clause that could be included in a developer contract:

"No Harmful Code: The Developer represents and warrants that all software, code, or deliverables provided to the Client shall be free from harmful code, including but not limited to viruses, malware, Trojan horses, worms, or any other code or programming that could disrupt, damage, or compromise the Client's systems, networks, or data. The Developer shall exercise reasonable care and implement industry-standard practices to prevent the inclusion or introduction of any such harmful code in the deliverables. In the event that any harmful code is discovered in the deliverables, the Developer shall promptly rectify the issue at its own expense and provide necessary support to mitigate any damage caused."

contains any “back door,” drop dead device,” “time bomb,” “Trojan Horse,” “virus,” or “worm” (as such terms are commonly understood in the software industry) or other code designed or intended to have, the capability of performing, any of the following functions:

• disrupting, disabling, harming, otherwise materially impeding in any manner the operation of, or providing unauthorized access to, a computer system or network or other device; or
• Damaging, destroying or preventing access to any data or file without the user’s consent.

It's important to note that this is just an example clause, and the specific language and provisions may vary depending on the nature of the project, the parties involved, and the applicable laws. It is advisable to consult with a legal professional when drafting or reviewing contracts to ensure they meet the specific needs and requirements of the parties involved.

There are a few key reasons why a developer employment agreement may include an "error-free code" contract clause:

• Quality assurance: The employer wants to ensure the code being written and delivered is bug-free and functions as intended. This protects the company from defects negatively impacting customers or operations.

• Accountability: Having an explicit clause holds the developer accountable to write code that meets high standards. It establishes expectations upfront for quality of work product.

• Limit liability: By agreeing the code will be error-free, the developer assumes responsibility if any bugs arise, limiting the company's liability for defects. It shifts financial risk to the individual.

• Incentivize best practices: Requiring error-free code incentivizes things like thorough testing, code review, and documentation so developers will carefully check their own work.

• Scope of work: Clearly defining the standard of work lets both parties understand the developer's responsibilities and what constitutes satisfactory performance and completion of duties.

• Fair compensation: Companies may argue higher pay is warranted if developers guarantee flawless code quality as a condition of employment.

However, true error-free code is nearly impossible to achieve. Some see it as an overly broad term subject to interpretation that could set developers up for breach regardless of reasonable efforts.

Error-Free/No Harmful Code Clause With regards to project deliverables, employee acknowledges that their finished works and deliverables are free from significant errors or defects including, but not limited to, bugs, viruses, worms, logic errors, or failures of the software to operate in all material respects as described by original company specifications and documentation.  Any significantly disrupting, disabling, harming, damaging, or otherwise materially impeding errors or defects cannot be submitted by employee to the company.  employee also maintains that it will use reasonable business judgement and best business practices in determining whether or not to implement security patches or upgrades that are generally available for that software.

A recognition of confidentiality clause in a developer employment agreement establishes that

• Any code, designs, plans, or other work product created by the developer during the course of employment belongs solely to the employer.

• The developer has an obligation to maintain the confidentiality of all company proprietary information they are exposed to, including source code, databases, client information, financials, etc.

• Proprietary information may only be used for legitimate business purposes and the benefit of the employer. It cannot be shared externally or used following employment without permission.

• The developer agrees to return all company devices, property and confidential materials upon termination and continue to honor non-disclosure obligations after leaving employment.

• Breach of confidentiality could result in legal penalties like damages or an injunction against further use of proprietary assets or information.

• Early in the agreement it sets expectations that all aspects of the developer's job are confidential in nature due to working with sensitive code/data.

The purpose is to protect the company's intellectual property and competitive advantages by ensuring any confidential materials remain strictly private both during and after the work relationship ends. It establishes clear legal precedent if a breach occurs.

Enforceability

Here are some common examples of when an employment contract may be found unenforceable by a court:

• Restrictive covenants that are overly broad, such as non-compete agreements that prohibit an employee from working for competitors anywhere in the world indefinitely. Courts typically find these types of restrictions unreasonable.

• Illegal clauses, such as those requiring an employee to engage in illegal or unethical conduct. Courts will not enforce agreements that violate laws or public policy.

• Lack of consideration. If an employee was not adequately compensated or given something of value in exchange for signing restrictive terms, a court may invalidate the agreement for lack of consideration.

• Unconscionable terms. Courts will often reject contract clauses that are grossly one-sided, oppressive, or shockingly unfair to the employee. This can include limitations on employee rights, liability waivers, or excessive damages provisions.

• Violation of civil rights laws. Any contract terms found to discriminate based on race, gender, religion, national origin, disability status, etc. would be unenforceable.

• Contract ambiguities. If restrictive terms are vaguely written or subject to multiple reasonable interpretations, courts may refuse to enforce vague or ambiguous language.

• Employer breach. If the employer materially breached the employment contract first, courts may find the employee is no longer bound by restrictive terms within.

what is disclosure schedule

A disclosure schedule is a document that is attached to and forms part of a larger legal agreement, such as a contract or merger agreement. It provides specific details or qualifications that correspond to general representations and warranties made in the primary document.

Some key aspects of a disclosure schedule:

• It lists out any exceptions, changes, additional details, qualifications or known issues pertaining to the representations and warranties.

• For things like assets, liabilities, financial statements, legal proceedings - it schedules out the specifics that qualify those broader clauses.

• It allows the parties to fully disclose all material facts upfront without cluttering the main agreement.

• Items disclosed aren't considered breaches of representation as long as they are clearly stated in the schedule.

• Schedules are thoroughly negotiated along with the contract to address all disclosure requirements.

• Both parties must expressly agree to the accuracy of the disclosures for the deal to move forward.

So in M&A, contracts and other complex agreements, a disclosure schedule provides a formal place to precisely outline the real-world specifics behind high-level contractual warranties and representations. It's an agreed-upon part of the bigger agreement.

Domicile

In legal contexts, domicile refers to a person's true, fixed, permanent home or place of habitation. Some key things to know about domicile include:

• Domicile determines where someone is considered a resident for legal purposes like taxes, voting, driver's licenses, etc. It's not necessarily where you temporarily live.

• You can only have one domicile at a time. If you maintain more than one home, your domicile is where you intend to return and remains permanently.

• Factors that courts examine to determine domicile include where tax returns are filed, where you vote, where your spouse and family live, location of your belongings/assets, your will and trust documents.

• Temporary presence somewhere does not establish a new domicile. You must intend to remain there permanently or indefinitely to change your legal domicile.

• Students typically maintain the domicile of their parents. Jobs/careers may prompt a change in domicile if you relocate permanently.

• Domicile impacts things like divorce and custody jurisdiction, probate court jurisdiction, diversity jurisdiction for federal lawsuits.

So in legal usage, domicile refers to one's established, fixed home base used to determine residency status for legal purposes. It's a question of both physical presence and subjective intent to remain.

Injunctive Relief

Injunctive relief refers to a remedy ordered by a court that requires a party to do or refrain from doing a specific act. It is an equitable remedy issued by the court to prevent irreparable harm or injury from occurring or continuing.

Some key points about injunctive relief in a legal context:

• It is an interim or preliminary measure ordered by a court before or during a legal case to preserve the status quo between parties.

• The main types are prohibitory injunctions (ordering a party to refrain from doing something) and mandatory injunctions (ordering a party to take a specific action).

• A court will issue an injunction only if it believes one party faces immediate and irreparable harm without court intervention and that legal remedies are inadequate.

• Examples include restraining orders, orders blocking a merger until antitrust issues resolved, requiring specific performance of a contract.

• Failure to comply with an injunction order can result in contempt of court charges and legal penalties against the non-complying party.

• The injunction is in effect until a court makes a final ruling in the case or lifts/modifies the order based on new evidence or changed circumstances.

So in legal terms, injunctive relief refers to provisional court orders aimed at stopping or compelling specific acts to prevent irreversible harm pending full case adjudication.

breach of duty

In a legal context, a breach of duty refers to a failure or violation of a legal obligation or duty owed by one party to another. It occurs when a person or entity fails to meet the standard of care or fulfill their responsibilities as required by law, contract, or professional standards.

The concept of breach of duty is often associated with the legal principle of negligence. Negligence occurs when a person or entity fails to exercise the level of care that a reasonable person or entity would in similar circumstances, resulting in harm or damage to another party. To establish a claim of negligence, the following elements must typically be proven:

1. Duty of Care: The defendant owed a legal duty of care to the plaintiff. This duty can arise from various relationships, such as doctor-patient, employer-employee, or driver-passenger.

2. Breach of Duty: The defendant breached or violated the duty of care by failing to act as a reasonably prudent person or professional would in similar circumstances. The standard of care may vary depending on the specific context and the applicable laws or professional standards.

3. Causation: The breach of duty was the direct cause of the plaintiff's harm or injury. The harm suffered must be a reasonably foreseeable consequence of the defendant's actions or omissions.

4. Damages: The plaintiff experienced actual damages or harm, which can be physical, emotional, or financial in nature. Without measurable damages, a claim for negligence typically cannot succeed.

A breach of duty can occur in various areas of law, including personal injury cases, medical malpractice, contract disputes, and professional negligence claims. The specific legal standards and elements required for proving a breach of duty may vary depending on the jurisdiction and the area of law involved.

It is important to note that legal advice from a qualified attorney should be sought for specific situations, as laws and legal standards can vary, and the application of these principles can be complex.