Employment Contract ConsiderationsInterview and Hiring Guide

Employment contract is a way to reduce risk when changing jobs

The IT Labor Market is tight. With this as a reality, IT Pros at the executive and senior manager levels now are demanding employment contracts that protect them if things do not work out.

Also, when going to work for a competitor or a troubled company then there are some additional financial and legal considerations that have to be taken into account. First and foremost, the IT Pro needs to assume the job will only last a year. The individual will need to look for another position while you are out of work. Given that assumption an employment contract with protections is a must.

Employment contract

The employment contract has everything spelled out including grounds for termination, payments, insurance coverage, re-location (if you move), out placement services, and what can be disclosed. Attorney's fees should be covered, in addition you should retain the right to select the attorney to be used.

Signing bonus

Bonus should cover lost benefits at current place of employment such as vesting and unpaid bonuses. In addition there should be some amount for the “risk” taken for leaving a “sure thing” and going to a competitor or a troubled company.

Relocation Expenses

Expense should include cost differential if you are moving from a low cost housing market to a high cost market. Moving travel expenses, broker commissions, pre-payment penalties, interest rate differentials and moving expenses for all items such as extra cars, boats, RVs etc.

BYOD and SmartPhones

Ownership of devices and phone numbers should be clearly identified. For example if an employee arrives at a company with a personal phone and number. If that is used for business, when the employee leaves the company does the device (or its replacement) and phone number go with the employee. (see employee termination

Performance Bonus

Bonus should have two components short term 12 to 18 months and long term 3 to 5 years.

Termination & Compensation

The contract should cover what will be paid by whom and when. For example if you were moved will they move you back, will they pay for outplacement, status of your bonus, recommendations, and insurance coverage after termination.


You should be aware of the state you are in when you sign this and the state the contract is enforceable in. For example, California has limitations on non-compete clauses that favor the employee, whereas Massachusetts has no such limitations. Typical conditions for a non-compete clause are:

  • Supported by consideration (cash or other payment)
  • Negotiated in good faith where both parties had input
  • Necessary to protect the goodwill of the enterprise (trade secrets, customer list, contact information etc. )
  • Reasonable in duration and geographic area

Changing jobs is risky business. Janco Associates, Inc. can help you in the process. We can act as your agents to help you negotiate your contract or advise you on what you have been offered.

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