Why Did The Lawyer Put This In My Contract?: The Merger Clause

I negotiate and review a whole lot of contracts. I've been doing it so long that I forget some of this stuff looks like gibberish to normal people. By normal, I mean non-lawyers, of course. I thought I'd pick out some regular legal gobbledy-gook and deconstruct it for you here. Today, I'd like to talk about the merger clause, also called the integration clause. You may see something that looks like this in your employment agreement, severance agreement, noncompete agreement, or other contract your employer hands you to sign.

This document contains the entire agreement between the parties. This Agreement cannot be modified unless an authorized representative of the company and I agree to do so in writing. 

 Looks harmless enough. The language is pretty clear, right? It's the whole agreement between your employer and you. You can't change it and neither can they unless you both sign a new piece of paper modifying the agreement or canceling it.

And yet, it's an incredibly important two sentences.

Here's why your employer's lawyer put the merger clause in the agreement:

Your employer wants the language because they don't want you to claim that they promised you a big bonus two months later, or that they told you not to worry about that noncompete stuff. Their lawyers put it in so they make sure you can't come after them based on a side verbal agreement.The language is there to protect your employer.

But it also protects you.

Here's why you should care about your merger clause:

Let's say you sign an employment agreement that has a noncompete provision, something that says you can't work for a competitor for a year or two. The agreement also sets out your salary, benefits, and job title. It says you can be fired at-will, meaning you can be fired for any reason or no reason at all.

Scenario 1: You work 6 months and then your employer tells you that they can't afford your salary anymore. The new salary is a 10% reduction of what they promised in the agreement. You can take it or leave it. You can't afford to lose your job, so you take it. You never sign anything agreeing to the change. When you get a job offer from the competitor, you take another look at the employment agreement. You realize the employer has breached the agreement on your salary. Their breach may be a complete defense to the enforceability of the noncompete provision. No, it isn't a magic wand that makes it go away. But you have a pretty good defense, and they might owe you money to boot.

Scenario 2: After a year, the employer drops its insurance coverage because it's too expensive. But they never have you sign anything agreeing to modify your contract to agree to this. They're in breach of the contract. You might have another defense, and they might owe you the money you have to pay for insurance.

Scenario 3: You're fired. Your employer hands you a severance agreement offering 2 weeks of salary in exchange for a release. It also has a merger clause saying it's the entire agreement between the parties. The new agreement doesn't mention your noncompete obligations. You decide to accept the 2 weeks and move on. You get an offer from a competitor. Can you take it? You betcha. The old agreement is gone with the wind. Your former employer might have a malpractice claim against the lawyer who forgot to have you reaffirm the noncompete obligations in the new agreement, but they have no claim against you.

Who knew two sentences could mean so much? Now you know why lawyers put merger clauses into your employment agreements, and why every sentence matters.

My Office Air Conditioning Broke In A Heat Wave. What Are My Rights?

The agency that regulates workplace safety is OSHA. If your workplace temperature has reached dangerous levels, OSHA might be able to help. In general, though, there’s no law saying how hot is too hot.

OSHA’s general recommendation is that temperatures at work be kept between 68-76° F with humidity control in the range of 20%-60%. However, don’t call OSHA if your boss sets the A/C at 66 or 78. They don’t regulate workplace temperatures unless it becomes so hot it’s dangerous to workers.

If you think your workplace is hot, think about these industries, which OSHA points to as of particular concern for heat-related illnesses: 

iron and steel foundries, nonferrous foundries, brick-firing and ceramic plants, glass products facilities, rubber products factories, electrical utilities (particularly boiler rooms), bakeries, confectioneries, commercial kitchens, laundries, food canneries, chemical plants, mining sites, smelters, steam tunnels, farm work, construction, oil and gas well operations, asbestos removal, landscaping, emergency response operations, and hazardous waste site activities.

It’s doubtful your office is reaching temperatures as hot as those super-hot workplaces, but if you live somewhere where temperatures are over 100° F, your office could possibly become dangerously hot.

OSHA has a heat index it uses to help guide employers on how to take measures to prevent heat-related illnesses. Over 103° F and it’s time to take serious precautions. Over 115° F, and employees will drop like flies.

If your office is suffering a heat-related emergency, OSHA suggests making everyone aware of how to contact emergency rescue services, having clear directions to the worksite readily available so they can be given to rescuers, and having heat-related first aid instructions available for workers to assist while waiting for the ambulance. If your company hasn’t made arrangements, take it upon yourself to become prepared if you are encountering excessive heat at work.

OSHA also offers guidelines for monitoring workers in hot workplaces to make sure they aren’t becoming overheated. Techniques include regular measuring of weight (for water loss), temperature and heart rate.

Now that you realize your workplace probably isn’t dangerously hot, you might want to look at bringing in fans, drinking lots of water, putting a cool, wet cloth on your forehead from time to time, and thanking your lucky stars you don’t work in a foundry or bakery.

If your workplace is dangerously hot, you can contact OSHA and ask for an inspection. If you report dangerous working conditions to OSHA, you are a whistleblower, legally protected from retaliation. Don’t wait until a coworker or you suffers heat stroke. It’s better to report dangerous conditions and be wrong than to allow yourself or others to become dangerously ill.

Ask A Lawyer: How Can I Get Paid For Overtime?

How can you get paid for all the hours you worked? Whether it's getting paid vacation days or lunch breaks, lots of AOL Jobs readers have concerns about this issue, so I'm going to answer three readers' questions in this column. Please note: I'm giving general answers based on federal law. Your state may have laws with more stringent requirements for employers, so always check with an employment lawyer in your state about your specific situation.

Q: I work for a government agency and if we get any overtime, say on a Tuesday, we have to flex it in time off that week so that we don't get paid for it. The time we get off is straight time not time-and-a-half. They make us flex our time off if we work more than an eight-hour day. Is this legal?


For answers to this and other questions about wages, overtime and holiday pay, check out my new column in AOL Jobs.

Is Your Employer’s Investigation Gag Order Illegal? Why Investigations Might Not Be Confidential Anymore

You may have heard management-side folks yelling, “The sky is falling! The sky is falling!” recently. They’re totally freaked out about the NLRB’s recent ruling in Banner Health System d/b/a Banner Estrella Medical Center and James A. Navarro. Now, anytime the dark side is upset, that usually excites me to no end. This time, I’m smiling but not ecstatic. I think all the wailing and teeth gnashing over this decision is much ado over nothing much new. Still, good news is rare for employees, so I thought I’d share.

In Banner, the company’s HR consultant routinely told anyone making any complaint not to discuss the complaint with coworkers while the company investigation was ongoing. In this case, it was a complaint about safety issues. The Board found that the blanket instruction given to employees violates Section 7 of the National Labor Relations Act, which says employees are allowed to discuss working conditions, and Section 8 of the Act, which says employers aren’t allowed to prevent employees from doing so.

Oh, woe is me! says every management-side lawyer in the country. What will we do now? We can’t ever tell anyone ever again to keep any investigation confidential. Calamity will ensue.

Bollocks.

It’s been the law for a long time that employers had to show a legitimate reason to issue a confidentiality order on employees for investigations. The Board clarified, saying, “it was the Respondent’s burden ‘to first determine whether in any give[n] investigation witnesses need[ed] protection, evidence [was] in danger of being destroyed, testimony [was] in danger of being fabricated, or there [was] a need to prevent a cover up.’ [citing an older case saying the exact same thing]. The Respondent’s blanket approach clearly failed to meet those requirements.”

Nothing new to see here folks.

So yes, employers need to minimize the impact on employees’ right to discuss working conditions by only using gag orders for a legitimate purpose, and only for the time they actually need to accomplish that purpose. If they’re investigating embezzlement and the employee they’ve just interviewed tells them that Joe Schmo in Accounts Receivable has a second set of books he keeps in a locked file cabinet, then they can tell their witness not to discuss what he said with Joe Schmo until they can secure the file cabinet and interview Joe Schmo.

What they can’t do is tell employees that they aren’t allowed to warn coworkers that they’re working with asbestos; that the super-heated superglue their supervisor tells them to use to repair cabinets releases cyanide as a byproduct of the heating (true fact – never heat superglue unless you’re a forensics expert in a police department); or that the supervisor in Receiving is a grabber.

I’ve seen these kind of confidentiality rules and even contractual provisions used as a weapon against employees. They complain about, say, sexual harassment and suddenly are banned from discussing with female coworkers that their boss is a harasser. They can, and frequently are, fired if the employer claims they think the employee violated confidentiality.

The National Labor Relations Act says employees are allowed to discuss working conditions, which darned well should include being able to compare notes on the office letch, dangerous working conditions, and illegal practices. It’s about time the practice of putting a gag order on employees was shut down for good.

The ban isn’t across the board. First of all, supervisors can still be required to keep investigations confidential without consequences. The NLRA doesn’t apply to supervisors. Second, because the employer can show a legitimate reason to keep things confidential, such as protecting a witness, the danger of evidence being destroyed before the employer can secure it, preventing a cover-up, or the danger of fabricated testimony, nothing much will change. I suspect many employers will claim the last reason as their justification for demanding most employees remain gagged in investigations, so I’m willing to bet we’ll continue to see cases where employees challenge their employer’s right to shut them up about dangerous, discriminatory, or illegal practices.

Let’s give three cheers to NLRB for saying no to this coercive and retaliatory practice.

My Employer Says I Have To Resign. What Should I Do?

Suzanne Lucas, the not-at-all-evil Evil HR Lady at CBS Money Watch, wrote an interesting piece about being forced to resign, and I wanted to talk some more about this important issue here. I get this issue all the time. People come to me and say, “I was forced to resign.” Huh? How did the employer do that? Gun to head? Torture devices? Kidnapped loved one? Because your employer can’t make you quit. Quitting is entirely, 100%, up to you.

Just because your boss or HR comes to you and says you have to resign, doesn’t mean you should. My usual advice is never, ever resign unless you have another job lined up or the company offers you an incentive to resign that makes it worth your while.

Suzanne Lucas says you should ask these questions/say the following before resigning:

• How much severance will you give me in exchange for my resignation?
• If I resign, will you oppose unemployment?
• Why do you want me to resign?
• What will you say when you are called for a reference?
• I will take this and have it reviewed by my attorney before signing.
• I need this in writing.
• What will be my official "reason for termination" be in your HR system as well as my paper file?

I agree 100%. You need to weigh your options carefully before agreeing to resign. Now is the time to negotiate. If they want you gone, let them pay you to go away. Otherwise, make them fire you. You need to consider the upsides and downsides to resigning versus being fired. Here are some things to consider.

Why You Shouldn’t Quit

You haven’t complained about illegal harassment or discrimination that occurred: It may be a bit late in the game, but if you didn’t follow the company’s written policy on reporting harassment based on race, age, sex, religion, national origin, disability, etc. then you may lose potential claims against the employer. Now is the time to put together your formal, written complaint of discrimination and harassment. Submit it to HR as soon after the meeting where they asked you to resign as you can. If you think the resignation request is being pushed by your harasser, say so. Tell them how others of a different race, age, sex, religion, or whatever your protected category is were treated differently. Tell them that those others are not being asked to resign. Ask them to do a prompt investigation. Sometimes, they really don’t know about the discrimination and reporting it might stop the termination process in its tracks.

They aren’t offering anything: If they don’t offer severance or some other monetary incentive, why would you quit? Don’t make it easy on them. If they want you out of there, they should offer something, in writing.

You might lose your right to unemployment benefits: Some unscrupulous employers use the resignation as an excuse to claim you aren’t entitled to unemployment. It could be your word against theirs if you don’t properly document that you were forced to resign.

They want you to sign something right away: If the employer is shoving something in front of you and demanding you sign it, consider that a red flag. They’re trying to trick you. Don’t sign anything you don’t understand or are too distraught to think about clearly. Tell them you need time to think about it. Take it to an employee-side employment lawyer if there’s anything in it you don’t fully understand.

You have claims against the company: If you think you have a discrimination, whistleblower, worker’s compensation retaliation, breach of contract or other claim against the employer, you may have leverage to negotiate a better exit package. Don’t sign a release of claims without fully exploring your options.

You aren’t fooling anyone: Some people think a resignation looks better on a resume. Maybe. But if you resign and are then unemployed for months or years, who do you think you’re fooling. Nobody in their right mind quits without having another job in this economy. HR people aren’t (mostly) dumb, so they will know something happened that prompted your resignation.

Why You Should Quit

Great severance package: If you are offered a severance package that will tide you over sufficiently when you’re looking for another job, then you might want to take the deal. Make sure you aren’t also signing away your right to work for a competitor, your pension, or something else of value. Take it to a lawyer to be sure.

Won’t challenge unemployment: In most states, the mere promise that you’ll get unemployment without a hassle isn’t much incentive. Unemployment is usually a fraction of what you were making. However, if you think they might have a basis to successfully challenge your unemployment, then you might consider the resignation as long as they make the promise about unemployment in writing.

You have an alternative: If you have a job offer you’ve been considering, have a startup company you want to spend more time on, or think it might be time to retire, then a forced resignation might help you make a smooth transition. Make sure they agree they won’t tell potential employers or customers anything other than that you left to pursue other options.

If your employer is asking you to resign, you have some power, as Suzanne Lucas points out in her excellent article. Now is the time to explore your options, talk to a lawyer, call your union rep, and read everything carefully. You may have more leverage to negotiate in this situation than you think. Good luck!

What You Don't Know About the Minimum Wage Will Hurt America

I bet you don't think about the minimum wage very much, unless you're one of the folks trying to live on it. There's a move afoot to raise the minimum wage, and you should support it. It's in everyone's best interest to make sure working Americans make a living wage.

Senator Tom Harkin has proposed the Rebuild America Act, which would, among other provisions, raise the minimum wage. It's about time we revisit the minimum wage. Here are some important facts you should know about the minimum wage:

Way below inflation: If the minimum wage had been raised to keep pace with inflation since it was $1.60/hour in 1966, it would now be $10.55.

Annual income: If you work full time on minimum wage, your annual income is $15,080. Go ahead. Try living on that for a year. Morgan Spurlock tried it for 30 days in his old TV show. If you never saw it, you missed an eye-opener.

Tipped employees: Tipped employees have a minimum wage of $2.13/hour. Tip well!

Affording an apartment: In no state in the U.S., even those with higher minimum wages, can a minimum wage worker afford a two-bedroom apartment at fair market value working only 40 hours/week.

Disproportionately women: 64% of minimum wage workers are women. Compare that to the percentage of women who are CEOs, at 4%. Something is wrong here.

Good for the economy: Minimum wage workers tend to spend their pay increases, mainly because they have to. Increases in the minimum wage are good for the economy.

Majority big corporations: Most minimum wage workers are working for big corporations, who have reported record profit increases. The old canard that it would put mom and pop shops out of business is malarkey. 

More college educated: More college-educated folks make minimum wage than those who never graduated high school. If you think minimum wage workers brought their troubles on themselves by dropping out, you are wrong.

Now that you have the facts, I hope you'll tell your Congressional representatives and Senators that you support raising the minimum wage to something Americans can actually live on.