Employment Agreements for Designers

If a design firm hires you for a staff position, you'll be given some form of written employment agreement. In small firms, the agreement may be rather short. In larger firms, it will probably be a more detailed document. This articles addresses some basic issues related to employment agreements, as well as extra components that you may encounter.

The Basics

U.S. law doesn't require companies to have formal, written contracts with their employees. However, using a contract can be a good idea, especially for senior-level positions, because it sets forth the terms of your relationship.

In most instances, the agreement will begin with your job title and starting date, a brief description of your job responsibilities, your base salary and an explanation of the company's payroll schedule (such as bi-weekly or semi-monthly), along with a very general overview of the benefits being provided (such as whether or not there is a group medical plan in place).

The agreement should include clarification of your employment status (temporary or regular, part-time or full-time, and exempt or non-exempt from overtime). Unless the company is unionized, your agreement will not be for a fixed period of time. Instead, it will include a statement of “employment at will.” This means that you can be fired at any time and for any reason, as long as the reason is not illegal. Similarly, you have the right to resign at any time for any reason.

You will also be asked to acknowledge that all original work produced within the scope of your employment will be considered “work made for hire” under U.S. copyright law, please see the earlier article about Intellectual property, (March 2005). The standard definition of work-for-hire is a work created by an employee as part of his or her job. Copyright belongs to the employer, who is recognized as the legal author One implication of this is that a departing employee should always ask before taking anything that might be considered intellectual property. Even though you have created something, you need your employer's permission before you can add it to your portfolio.

Chances are that your contract will also include a nondisclosure section to protect confidential information and trade secrets that you will learn about your employer's company and about your clients' businesses.

In addition to these basics, design firm employment agreements often address a number of other issues, including the following:

Exclusivity

Generally speaking, it's legal for you to work more than one job. However, your employer does have the right to limit after-hours work that is in conflict with its own business. Your employer may want to be the only company for which you perform creative services. Moonlighting for a competing creative firm, or perhaps directly for one of your employer's clients, could provide grounds for discipline or discharge.

Your agreement may specify a method to be used for resolving any legal disputes. As part of a growing trend, many creative firms ask employees to give up the right to sue in court over issues such as wrongful termination, breach of contract and discrimination. If you sign an agreement that includes an arbitration clause, you're promising to pursue any claims against your employer through arbitration, rather than through a lawsuit.

Noncompetition

Some design firms ask departing employees to agree not to enter business in direct competition with them. This could be included in an employment contract or set up as a separate agreement. However, the creative firm cannot unreasonably restrict a departing employee from earning a living. For this reason, noncompetition agreements can be difficult to enforce in some states unless the restrictions are very narrow in terms of time period and geographic area. (It's important to note, however, that noncompetition agreements are routinely upheld if they're part of a contract for the sale of a business.)

Acceptance

At the end of the document, there will be a place for you to sign. When you do so, you indicate that you've read the contract, understand it and accept it.

Changes

Once a signed contract is in place, it limits the design firm's ability to alter the stated terms and conditions of employment. To make changes, it's necessary to re-negotiate the contract. For this reason, most employment agreements do not go into great detail about anything that's quite likely to change over time. For example, the exact details of the group medical insurance policy would change if the plan were moved to a different insurance provider. This is a common occurrence. In areas not addressed by the contract, and in situations where employees work without contracts, the employer generally will have much more freedom to make unilateral decisions and implement changes without having to negotiate.