Whenever I’m asked to review an employment agreement or contract there are three initial provisions I look for:

  1. The Venue Provision:  If there is a dispute over the agreement does it specify where any lawsuit must be filed(City/County/State)?  Does it specify state or federal court? 
  2. Arbitration Provision: Does the agreement require arbitration?  Is it governed by AAA rules?  How many arbitrators are required?  Is there a deadline to demand arbitration?  Is there a loser pays provision?
  3. Waiver – Is there a jury trial waiver?  These are enforceable in Texas if certain requirements are met, but not all states.

There are of course others, but these provisions define the playing field.  A venue provision may require a litigant to hire a lawyer they wouldn’t normally use in another state.  It also might require them to travel.  These things factor into the cost of defending or prosecuting a lawsuit.  In addition to venue, a choice of law provision is always good to have.  As seen here, non-compete agreements are sometimes easier to enforce in certain states as opposed to others.  Does the non-compete agreement specify choice of law?  Arbitration and jury trial waivers eliminate the risk of a runaway jury.  However, the cost of arbitrations continue to rise and an arbitration is not always "cheaper" then a standard lawsuit.  Make sure these issues are taken into consideration before signing or drafting any agreement.