Question: Come up with a response, on each concern with suggestions of how the issues with each of the clauses could be resolved, with a brief
Come up with a response, on each concern with suggestions of how the issues with each of the clauses could be resolved, with a brief rationale to this.
In regards to Jake's Comic Books mock contract, the first key concern is with the pay and compensation section. The contract states, "Whereas the Parties also agree that the wage may be subject to decrease on annual review by an amount as may be set by the Employer based on available funding and other factors" (Jake's Comic Books Contract). The owner, Jake, does inform Jamil that due to the pandemic, the business is struggling and writes in the contract that there may be a time when Jamil's wage can be decreased. However, a legally enforceable contract must contain the three elements of offer, acceptance, and mutual consideration (Doorey, 2020, p.100). For Jake's Comic Books contract, it is the element of mutual consideration that has not been sufficiently safeguarded. Mutual consideration in a contract means that the contract "must provide something of value to both the employer and the employee that they otherwise would not receive" (Doorey, 2020, pg. 102). In Jamil's case, his employer, Jake, would benefit from Jamil's wage decrease, but Jamil does not benefit at all. Since Jamil is not being offered something of value in return, the contract is not enforceable. There is no other offer within the 'pay and compensation' section of the contract that demonstrates Jamil will be receiving something of value in return for his wage decrease. If employers were allowed to enforce these elements in a contract, employees would be taken advantage of as the benefit to an employer would be exponentially greater.
The second key concern in Jake's Comic Books contract with Jamil is the 'termination' section of the contract. The contract states, "This agreement may be terminated by the employer, in case the following occurs: 1. For cause. 2. If the Employee breaches this Agreement. This agreement may be terminated, by the employee, in the case of the following occurs: 1. If the Employer breaches the agreement. Upon terminating this Agreement, the Employee will be required to return all Employer's materials, products, or any other content at their earliest convenience, but not beyond 7 days" (Jake's Comic Books Contract). Within the statement there is no specific reference to the length of time required for termination, i.e., "reasonable notice' which makes this section ambiguous. As stated by Doorey, "the default rule in the common law regime is that the parties must provide one another with reasonable notice when they terminate the employment contract" (Doorey, 2020, p.118). If the employer terminates the employee, the employee could potentially seek damages depending on the length of notice. The employer leaves themselves open to litigation. Also, since Jamil's contract is an indefinite-term contract, which is a contract with no specific end-date, the lack of reference to reasonable notice in the contract, makes it ambiguous. Secondly, Doorey states that since the employer did not state the term reasonable notice, they could have included a clause "to override the common law implied obligation to provide reasonable notice of termination" (Doorey, 2020, p.121). Doorey refers to a clause such as, "The employer may terminate this contract at any time and for any reason by providing the employee with three months' notice, including benefits, which may be working notice or pay in lieu of work" (Doorey, 2020, p.119). This would protect the employer from litigation, and make the contract unambiguous and protected from litigation as well.
The third key concern regarding Jake's Comic Books contract is the unavailability of the employee handbook, and the fact that it would be provided to Jamil later in the week after he signed the contract. The employee handbook falls under the ancillary documents, which in many cases will "stipulate rules relating to termination of employment, discipline, or benefit eligibility or entitlements" (Doorey, 2020, p.145). As this document provides important and pertinent information about the employer/employee relationship, Doorey states that "At minimum, both parties need to know about the ancillary document, and there must be clear evidence that both agreed to its terms and understood and intended that the document would be legally enforceable" (Doorey, 2020, p.145). As stated, Jamil would like to read the employee handbook carefully before signing, but Jake will provide him one once the contract is signed. However, as Doorey states, "A document prepared unilaterally by an employer but never actually provided to the employee will not be legally enforceable. How can an employee accept terms they are not even aware exist" (Doorey, 2020, p.145). Essentially, an employer must provide ancillary documents if they want to be able to enforce a contract. An employee cannot be purposely left unaware of terms and conditions that will affect them in their employment.
The fourth key concern of the contract is the 'Confidentiality' section that states, "All terms and conditions of this Agreement and any materials provided during the term of the Agreement must be kept confidential by the Employee unless the disclosure is required pursuant to process of law. Disclosing or using this information for any purpose beyond the scope of this Agreement, or beyond exceptions set forth above, is expressly forbidden without the prior consent of the Employer. These terms will remain in force for a period of seven (7) years following termination of the contract by either party" (Jake's Comic Books Contract). This statement is a restrictive covenant clause, which aims to protect the employer. However, according to Doorey, judges begin with the presumption that restrictive clauses are unenforceable due to the fact that "employees are vulnerable because there is an imbalance of power on the side of employers"(Doorey, 2020, p.117). As the employer holds more of the power between themselves and employees, restrictive clauses may cause greater harm to the employee than necessary. Doorey also notes that judges "will enforce a non-competition clause only if the restrictions are reasonable in terms of how wide a geographical scope the ban covers and the length of the ban" (Doorey, 2020, p.117). In Jamil's contract, there is no geographical area mentioned, but the term of seven years is referenced for length of ban. The length of ban could be put to the legal test, and a judge could determine it is enforceable. However, in Jamil's contract, it states the ban would remain in force regardless of who terminated the contractthe employee or the employer. This is the central issue, as Doorey states, "a restrictive covenant will not be enforced if the employer terminates the employment contract without providing the employee with the notice the contract required. Since the employer repudiated the contract, it cannot then attempt to seek to enforce the restrictive covenant" (Doorey, 2020, p.118). An employer cannot expect to be able to terminate an employee without reasonable notice and enforce the restrictive covenant. As stated previously, the termination clause is ambiguous and does not reference reasonable notice nor does it have any other specific language regarding termination. In conjunction with the lack of reasonable notice, and its connection to a restrictive covenant, this section of Jamil's contract would ultimately be unenforceable.
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