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This is the tale of two recent appeal cases, which together confirm my “Kitchen Sink” theory on employment contracts. That is, employers often bargain for excessive protection, no matter how junior or administrative the employee. However, in seeking such protection, they sometimes get none at all.

Are you dreaming of becoming the president of a company? Or is it your goal to purchase a small business and finally become your own boss? Jim Maizis pursued this goal when he left his full time job to buy Chatten’s Better Hearing Service, a small hearing aid provider in Oshawa, Ontario.
New to the business, Maizis needed a company veteran to help him with the transition. Dawn Loyst was the perfect fit. She had worked for the former owners of Chatten’s for nearly nine years and she knew the ins and outs of its business. But she came at a high cost to Maizis.

It is one of the biggest human resource blunders in the workplace – employees’ told to sign employment contracts after their job already begins. A recent Ontario case illustrates why.
On Anthony Fasullo’s third day of work with Investments Hardware Ltd., he found himself in a pickle. He was given an employment contract containing a vast limitation on any future severance and told to sign his name. However, Fasullo was not previously informed that he would have to sign a contract with any limitation on severance and worse, he had just resigned from another position to take this job. Therefore, his options were grim. He could sign the contract and agree to the limitation or he could refuse and potentially be unemployed. Not surprisingly, Fasullo signed his name and continued to work as before.
The legal impact of the contract Fasullo signed remained dormant until he was fired, several years later. At that time, Investments Hardware sought to enforce the contract in order to pay Fasullo only a small amount of severance.

When it comes to employment contracts, all is fair in love and war, as pretty much anything can be incorporated into the agreement. Employees should, therefore, beware of the certain terms.

It’s possibly the worst fraud in workplace law – corporations, with expensive lawyers and deeper pockets, insisting that employees sign one-sided contracts that reduce their legal rights. And employees, without bargaining power or an understanding of the law, not realizing their interests have been undermined. This is the tale of one nameless client who may learn this lesson the hard way.

It’s possibly the biggest mistake an employee can make: requesting a written employment contract or worse, agreeing to one without understanding its terms.

It never ceases to amaze me how just a little bit of foresight can go a very long way. Employees often bemoan the fact that they have little understanding of the employment contracts they are asked to sign. Such contracts are usually inundated with legal phraseology. But entice a soon-to-be employee with prospects of job security and many people will just sign their name unaware of the consequences that may arise down the road.

The biggest mistake you can make when changing jobs is to agree to an unfavourable employment contract. Be on the look out for probation, termination, contractual changes, non-solicitation, and non-compete clauses.