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When reviewing an employment contract, executives often focus on compensation. However, the importance of stating job duties should not be overlooked – particularly when the contract includes a non-compete agreement.
At Gardner Employment Law, we help employees understand and negotiate employment contracts before problems arise. In this article, we explain why stating your job duties in detail is important.
What is the Importance of Stating Job Duties in Your Employment Contract?
It is important to spell out your job duties in your employment contract because it gives you protection at work and in your non-compete. For the duration of your work in the described position, your employer cannot arbitrarily move you to another work group or demote you in practice. A detailed job description can be used to defeat a non-compete provision that is overbroad. These principles apply to physicians’ contracts as well.
An employment contract should do more than identify an employee’s title. Titles such as “manager,” “consultant,” or “vice president” may reveal very little about the executive’s actual responsibilities.
A stronger contract will specify:
- The services you will provide;
- The customers or accounts you will manage;
- The products, departments, or geographic markets you will support;
- Whether you will have access to confidential information;
- Whether you will supervise other workers; and
- Any limitations on your authority or responsibilities.
These details help establish the boundaries of the employment relationship. If the employer later attempts to enforce a non-compete, the duties may show that your work was considerably narrower than the activities prohibited by the restriction contained in the non-compete.
For instance, suppose an executive’s contract states that she will manage social media advertising for retail clients in Central Texas. After she leaves, her employer argues that the non-compete prevents her from performing any advertising or communications work anywhere in Texas. The contract description of her job duties can support her argument that the non-compete restriction extends beyond the work she actually performed.
A clear job description does not automatically determine whether a non-compete is enforceable. It can, however, provide useful evidence concerning the work the parties originally contemplated.
What Is the “Scope of Activities” in a Non-Compete?
A non-compete agreement typically restricts certain work after the employment relationship ends. Under Texas law, restrictions concerning time, geographic area, and the scope of activities must be reasonable and no broader than necessary to protect the employer’s goodwill or another legitimate business interest.
The “scope of activities” refers to the type of work the executive cannot perform. A non-compete should not necessarily prevent an executive from accepting every position with a competing company. Instead, the restriction should relate to the work the executive actually performed at the previous company.
For example, an executive may work for a company that provides marketing, accounting, technology, and consulting services. If the executive worked exclusively in marketing, a restriction preventing that person from performing any type of work for a competing company would be much broader than necessary. Therefore, the non-compete would be unenforceable.
That is why defining the job duties in the employment contract is important.
What Happened in Peat Marwick Main & Co. v. Haass?
The Texas Supreme Court’s decision in Peat Marwick Main & Co. v. Haass directly addresses whether a restriction bears a reasonable relationship to the work performed.
Lawrence Haass was a partner in a San Antonio accounting firm that merged with Main Hurdman. After the merger, the agreement required a departing partner to pay substantial “client acquisition costs” if the partner provided accounting services to a broadly defined group of the firm’s clients. Although the provision did not expressly prohibit competition, the court examined its practical and economic effect and treated it as a restraint of trade subject to the reasonableness standards governing non-competes.
The court explained that a restriction must bear some relation to the worker’s activities. Protecting client relationships developed during employment may be a legitimate business interest, but the provision at issue extended much further. It applied to clients with whom Haass had no contact while associated with the firm and even to clients the firm acquired during the 24 months after he left.
Because the provision reached business relationships Haass had not developed through his work, the court concluded that it imposed a greater restraint than necessary to protect the firm’s goodwill and was unreasonable. The decision is especially useful when evaluating scope of activity: a restriction should be tied to the employee’s actual services, customers, and business relationships – not every service offered or every customer obtained by the employer.
A carefully drafted duties provision can make this mismatch easier to identify. When an employment contract documents the executive’s actual responsibilities, customers, and territory, it becomes more difficult for an employer to characterize the former role as broader than it really was.
Avoid Broad “Other Duties as Assigned” Language
Many employment contracts allow an employer to assign “other duties as needed.” Some flexibility is understandable because jobs evolve. However, completely open-ended language can create uncertainty about both your current responsibilities and your post-employment restrictions.
When reviewing the contract, compare the duties provision with the non-compete:
| Contract Issue | What to Look For | Why It Matters |
|---|---|---|
| Primary duties | Are your principal responsibilities specifically listed? | A detailed description helps establish the work you were hired to perform. |
| Additional duties | Are additional duties limited to those reasonably related to your position? | Open-ended language may allow the employer to expand your role beyond what you originally contemplated. |
| Customers, products, and territory | Does the contract identify the customers, products, departments, or geographic markets you will support? | These details can help define the legitimate boundaries of a later non-compete restriction. |
| Restricted activities | Does the non-compete restrict only the same or similar activities you actually perform? | A restriction covering unrelated work may be broader than necessary to protect the employer’s interests. |
| Future employment | Would the restriction prevent you from accepting a different role with a competing business? | A non-compete should not function as an industry-wide prohibition against future employment. |
The duties provision and the non-compete should be reviewed together. A narrowly defined position combined with a sweeping non-compete may reveal an important inconsistency before the agreement is signed.
Make Sure the Duties and Non-Compete Match
The importance of stating job duties becomes especially clear when an employment contract includes a non-compete. Specific duties can help show whether the non-compete’s “scope of activities” is reasonably connected to the employee’s actual role.
Before signing, compare the duties section directly with the non-compete. If your responsibilities are narrowly defined but the non-compete restricts a much broader range of work, consider having the agreement reviewed and negotiated.
Gardner Employment Law helps employees evaluate employment contracts and non-compete agreements. Contact us today for assistance before you sign or when a dispute arises.