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American Samoa

Employment Agreement Essentials

Understand the key elements of employment contracts in American Samoa

Types of employment agreements

In American Samoa, employment law recognizes several primary categories of employment agreements.

At-Will Employment

At-will employment is the most common type of employment. In this arrangement, neither the employer nor the employee is bound to a specific duration. Termination can occur at any time by either party, with or without cause, although there are certain exceptions based on discrimination or protected factors. This type of employment is emphasized as the default nature in the absence of a contrary agreement.

Fixed-Term Contract

A fixed-term contract specifies a definite employment period, such as six months or one year. This type of contract offers more security for both the employee and the employer. Termination before the end of the term may constitute a breach of contract, unless provided for in the agreement.

Collective Bargaining Agreement (CBA)

A collective bargaining agreement is negotiated by an employer and a labor union. It outlines the terms and conditions of employment for union members. CBAs often provide greater job security and benefits compared to at-will employment.

Implied Contract

An implied contract is not explicitly written or verbally agreed upon, but arises from the employer's actions, representations, or policies. Employee handbooks or policy manuals can create implied contracts. It's important to note that employer policy manuals can give rise to contractual rights and obligations.

Independent Contractor Agreement

An independent contractor agreement is used to engage individuals for specific projects or tasks, rather than ongoing employment. Independent contractors are not considered employees and lack the same legal protections. Misclassifying an employee as an independent contractor can have legal consequences.

Important Considerations

Employment agreements in American Samoa can be oral or written. However, best practice favors written agreements for clarity and to avoid future disputes. American Samoa law sets minimum wage and overtime requirements. Employers must ensure compliance in their employment agreements. Certain federal employment laws, such as the Fair Labor Standards Act (FLSA) and anti-discrimination statutes, apply to American Samoa.

Essential clauses

In American Samoa employment agreements, it's crucial to include the following elements:

Identification of the Parties

This includes the full legal names of the employer and employee, along with their contact information.

Job Description and Duties

The agreement should clearly describe the employee's position and core responsibilities, as well as reporting lines and supervisory relationships.

Start Date and Employment Type

The employment start date should be specified, along with the type of employment, which could be at-will employment, a fixed-term contract, or independent contractor status.

Compensation

Details about the base salary or hourly wage, frequency of payment, overtime rates, and any bonus structures or commissions should be included.

Benefits

The agreement should list applicable benefits such as health insurance, vacation time, sick leave, and retirement plans. Any eligibility requirements or employee contributions should also be specified.

Termination

The conditions for terminating the agreement, such as cause and notice periods, should be outlined. If applicable, the agreement should address severance pay.

Non-Disclosure and Confidentiality

The agreement should protect the employer's proprietary information, trade secrets, or client data.

Restrictive Covenants

If applicable, the agreement may include a non-compete clause, which restricts the employee from working for a competitor within a specific geographic area and time period after employment ends. A non-solicitation clause can prevent the employee from soliciting former clients or poaching coworkers after leaving the company.

Dispute Resolution

The agreement should outline procedures for handling disputes, such as mediation or arbitration.

Governing Law

The agreement should explicitly state that it will be governed by the laws of American Samoa.

Probationary period

Probationary periods serve as a trial phase for both employers and employees before they commit to a long-term employment relationship.

Purpose

From the employer's perspective, the probationary period is a time to evaluate the employee's performance, skills, work ethic, and overall suitability for the job. For the employee, it's a chance to determine if the company culture, the role itself, and the work environment are a good fit.

Legal Framework

In American Samoa, the legal framework for probationary periods varies between government and private sector employment. The American Samoa Code Annotated (ASCA) ยง 7.0211 mandates a one-year probationary period for employees in the career service (government employees). In the private sector, while not explicitly mandated by law, probationary periods are a common practice. The terms should be clearly defined within the employment agreement.

Key Considerations

In the private sector, probationary periods can vary in length but are often shorter than the government-mandated one-year period. ASCA ยง 7.0803 governs the termination of probationary government employees, allowing for termination at any time without a hearing. Private sector termination rules will depend on the specific terms of the employment contract. Employers should conduct regular performance evaluations during the probationary period, with clear documentation and feedback provided to the employee.

Best Practices for Employers

Employers should include a clause in the employment agreement that outlines the length of the probationary period, evaluation criteria, and potential consequences if expectations are not met. They should also offer ongoing guidance, support, and regular feedback to the employee throughout their probationary period. Maintaining detailed records of the employee's performance, including evaluations, can support any decisions made regarding their employment status.

Considerations for Employees

Employees should carefully review the terms of the probationary period as outlined in their employment agreement. They should seek clarification on job duties, performance goals, and actively demonstrate their skills and value to the organization. Keeping a record of work accomplishments and contributions can provide tangible examples during performance discussions.

Confidentiality and non compete clauses

In American Samoa, employers often incorporate confidentiality and non-compete clauses in their employment agreements to safeguard their interests.

Confidentiality Clauses

Confidentiality clauses aim to prevent employees from revealing the employer's sensitive or proprietary information, such as trade secrets, business strategies, and customer lists. These agreements are generally enforceable if they are reasonable in scope and duration. However, overly broad or indefinite confidentiality agreements may face legal challenges. It's crucial for these clauses to clearly define what constitutes "confidential information" and specify the duration of the confidentiality obligation, both during and after employment.

Non-Compete Clauses

Non-compete clauses are designed to limit an employee's ability to work for a competitor, start a competing business, or solicit the employer's clients/customers for a certain period and within a defined geographic area. American Samoa courts will evaluate the reasonableness of non-compete clauses. Overly restrictive covenants that prevent an individual from earning a livelihood may be deemed unenforceable. The enforceability of these clauses depends on the protection of legitimate business interests and the reasonableness of the duration, geographic scope, and scope of activities restricted.

Best Practices for Employers

Employers should draft confidentiality and non-compete clauses that are narrowly tailored to protect their specific business concerns, avoiding overly broad or vague language. It's important to ensure the limitations imposed are reasonable in terms of time, geography, and the nature of activities restricted, as courts will scrutinize restrictive covenants. Consulting with an attorney specializing in American Samoa employment law can ensure your clauses are well-drafted and likely to be enforceable.

Recommendations for Employees

Employees should review any confidentiality and non-compete clauses carefully before signing an employment agreement. If the restrictions seem overly broad, they should attempt to negotiate narrower terms that protect their future employment opportunities. Consulting with an attorney can help address concerns about the scope or enforceability of the clauses.

A relevant case in this context is Palelei v. Star Kist Samoa, Inc., 5 A.S.R.2d 162 (1987). Although it doesn't explicitly address non-competes, this case underscores the importance of respecting the terms of employment agreements in American Samoa.

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