Binding contract terms Contracts can also bind employees. Employers often require employees to sign contracts that limit what employees can do during and after employment. Usually these contracts relate to whether an employee can work for a competing company after leaving a particular employer or what information an employee can disclose about company business. Contracts also commonly spell out what rights employees have in the work they create. Contract terms can also regulate how employment disputes are solved.
Some contracts require that employees submit disputes to arbitration rather than to court.
The one thing a contract cannot do is waive your rights under federal or state law. For example, if your employer is required to pay you overtime, you can't sign a contract waiving the right to overtime. Even if you have a contract, your employer are still subject to most laws regulating wages, prohibiting discrimination and sexual harassment, requiring accommodations of disabilities, imposing safety standards, providing medical and family leave time and benefits to employees who are injured on the job, and requiring payment of unemployment compensation. In addition, having a contract does not mean your employer can never fire or discipline you. If you violate the contract's terms, the employer can take an action against you.