What is boilerplate language and why does it matter? The term traditionally refers to stock language in a legal document that appears to be general, standardized language—however, before you sign any contract with a potential employer, make sure to read and understand these clauses.
What is a Boilerplate Provision?
Boilerplate language has been developed over the years by lawyers who draft contracts to cover some of the most frequently used terms and legal questions. Today, the term “boilerplate” refers to certain standardized clauses in an employment contract—they typically cover the mechanics of how a dispute between the two parties will be resolved.
However, the content of a boilerplate provision can have a significant impact on your career and your rights and liabilities under contract.
Although we never want to imagine the worst-case scenario when we’re signing onto a new job, I warn all of my clients to be mindful of negative outcomes: Signing off on your boilerplate provisions without a careful reading of them beforehand can—and often does!—have significant and often unexpected consequences in the case that you end up in a dispute over the contract.
Common Boilerplate Clauses
In recent years, we’ve seen a subtle shift in how boilerplate language is changing. One of the most common areas for complication is confidentiality agreements and noncompete clauses.
Confidentiality
The concept of confidentiality is inherently complicated—and constantly changing. We all understand the basic notion of confidentiality: You sign something, marking your commitment to keeping something confidential.
However, the question then arises: What is confidential? It’s tricky to define, often because it’s inherently intangible. While you may not be explicitly sharing company secrets or giving away confidential details, your pre-existing knowledge may serve you in a new role. For instance, you may have proprietary information and knowledge in your head that gives you new insight into your new role at a competitor.
On Cause
Traditional boilerplate on the definition of cause is changing. In the past, cause would only apply to individuals who had embezzled, committed fraud, or performed an act of similar magnitude.
Now in many boilerplate provisions, “cause” is defined as something akin to negligence, non-performance, or performance that doesn’t meet company standards. In many cases, this allows an employee to be fired for cause—simply because you’re not performing to the requirements of the company.
This can be as simple as someone who is “quiet quitting” at their job or just being sloppy or unengaged. This can be grounds for termination—no severance, just immediate termination, no medical coverage.
Noncompete and Non-Solicitation Clauses
In the past few weeks, non-compete agreements have been making national headlines about the Federal Trade Commission’s ban on the matter—but regardless of this dialogue, you need to be aware of noncompetes and nonsolicitation.
Historically, if an employee violated a noncompete, the employer would send a cease and desist letter—one step along the process of taking the employee to court. Then, if the noncompete actions did not stop, the former company will ask the court to enter an injunction against the employee, effectively blocking them from working with clients.
However, with today’s shifting boilerplate, a company no longer needs an injunction. Instead, with the right boilerplate language, companies have the authority to go straight to court—and the thought here is that “the employee’s act caused irrevocable damage.”
In the end, what looks like simple boilerplate language ends up giving your employer the right to injunct—costing you your livelihood and a great financial burden.
Other Common Boilerplate Provisions typically include:
- Warranties
- Indemnification
- Limitation of Liability
- Disclaimers
- Dispute Resolution
- Waiver
- Force majeure
- Jurisdiction
- Attorneys’ fees
- Arbitration
- Severability
- Attachments
- Escrow
- And so many more important details
How to Make Sense of Your Boilerplate Provisions
The boilerplate is one of the most significant reasons to seek legal counsel. If you are not a practicing attorney, it can be very challenging to understand the complexities of the boilerplate language and fully understand how the contract may be restricting your future career.
If possible, ask a lawyer to look over your documents for you. But if you aren’t able to hire a lawyer, don’t despair—you can still certainly read it yourself and ask probing questions of your potential employer to shed some light on the situation.
When considering your contract, review the following documents:
- Your contract
- Employment manual
- Equity agreements
- Bonus plans
- Profit interest plans
Laurel’s Top Tips for Anyone Negotiating Their Boilerplate
If you’re preparing to read, review, and negotiate any boilerplate language in your contract or employment documents, here are a few recommendations:
- There are no stupid questions. This is the time when you need to value yourself and ask questions to ensure that your career is covered. Ask your potential employer or your HR representative what certain items mean in your contract. If they aren’t able to give you a sufficient answer, do your research.
- Most terms ARE negotiable. More often than not, boilerplate language in a contract is negotiable. For our clients at Bellows, I cross harmful language off all the time.
- Identify your goal. Then, negotiate. Once you’ve gained a clearer sense of what the boilerplate provisions in your contract may be attempting to achieve, you can move forward with the negotiation process. First? Identify your goal. What is it that you want to achieve with your negotiation?
Other questions for your consideration:
- What is your employer’s definition of termination for cause?
- What is the definition of for-cause in your employment manual?
- Have you read your employment manual?
- Have you read your employment contract?
- Do you get equity? Have you read your award agreement?
- Do you get a bonus? Have you read your award agreement?
We can help!
Questions on navigating your boilerplate provisions? Our team can offer expert legal counsel. Send me a message or email us at lbellows@bellowslaw.com
