It’s tempting to gloss over the fine print in employment contracts, focusing instead on salary, benefits, and job responsibilities. The job market is competitive, and it’s reassuring to have a contract that seems to provide clarity and protection. However, buried in the fine print of many contracts is a term that can be disastrous for workers—a fee-shifting provision. This seemingly innocuous clause can turn an employee’s hard-fought legal victory in litigation into a financial disaster. Here’s why you should take it seriously.
What is Fee-Shifting?
Fee-shifting provisions are clauses in legal contracts that usually stipulate that the losing party in a dispute must pay for the legal fees of the winning party. At first glance, this may not seem problematic; after all, wouldn’t it deter frivolous lawsuits? But some fee-shifting provisions are one-sided: they only provide for the employer’s fees to be paid, not the employees’. The way some fee-shifting clauses are written in employment contracts, the employee has to pay the employer’s attorneys’ fees – even if they win.
Why They Can Be Disastrous for Employees
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Financial Burden: Even if you win your case, the cost of hiring a qualified attorney can be astronomical. If the court decides against you, not only will you have to pay your own legal fees, but you could also be responsible for your employer’s fees. And if you have a one-sided provision, you may have to pay both sides’ attorneys fees even if you win. This means that victory can come at a steep price.
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Chilling Effect on Mobility: If your employment contract includes restrictive covenants, it’s going to be hard to leave that job, even if it’s completely toxic. The question isn’t “is this noncompete enforceable?” The question is “Who has to pay to figure out if it’s enforceable?” If you’ve got a one-sided fee-shifting provision, the answer is YOU.
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Pressure to Settle: Knowing that losing a case could incur significant costs, employees may feel pressured to settle disputes early, even if it means accepting less than they deserve. Employers often have more resources to navigate legal situations and may leverage this imbalance against employees who fear potential financial repercussions.
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Impact on Mental Health: If you’ve got a contract with restrictive covenants and a one-sided fee-shifting provision, the only way out is to accept financial disaster. If you try to go to another job and the employer sues, you’re on the hook for their fees, even if they lose. This is a recipe for burn-out and mental and physical illness.
Protecting Yourself
While it’s tough to negotiate contract clauses when job offers are on the table, it’s crucial to scrutinize employment contracts thoroughly. Here are steps you can take:
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Read Your Contract Carefully: Always scrutinize your employment contract for any fee-shifting provisions. See if you can discern whether it’s one-sided (only the employer’s fees get paid), two-sided (prevailing party pays), or abusive (employee pays attorneys’ fees no matter who wins). If it’s option three, think long and hard about whether you want to work for people who think that’s appropriate.
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Seek Legal Advice: Before signing any contract, consult with a qualified employment attorney who can help you understand the terms and their potential implications for your career.
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Negotiate: If you discover a one-sided fee-shifting provision, be bold enough to insist that it be made mutual. The best time to discuss contract terms is before you accept an offer.
Conclusion: Protect Your Future
Don’t let hidden pitfalls in your employment contract compromise your career and finances! Make sure to carefully review your agreement, seek legal advice, and understand your rights before you sign on the dotted line. Knowledge is power—equip yourself with the information you need to protect your future.
Don’t let fine print dictate your future. Take charge of your rights today!
