Key Words

What is the meaning of:

Incorporated by Reference?

In many workplace agreements, we see language that says something like this:
“This Agreement and the Confidentiality Agreement signed on November 24, 2021, which is hereby incorporated by reference, constitute the entire understanding between the parties.“

In this way, two agreements —one “new,” and one “old”— are combined into one. The simple phrase “incorporated by reference” makes it necessary to review not only the “new” agreement in your hand, but also the “old” agreement (or agreements) now being incorporated into it, which you may have signed decades ago.

So, for example, if you are given a Severance Agreement, and it “incorporates by reference” a Non-Competition Agreement you signed on your first day of work nine years ago, without realizing it, you may again be agreeing to a Non-Compete restriction that may not make sense now.

“Old” agreements may have made sense to sign then, but may not make sense to sign again, now.

Also, years ago you may not have had sufficient leverage to refuse to sign that “old agreement,” but you may now have sufficient leverage to refuse to re-sign it.

As another example, if you are given a new and seemingly generous Bonus Agreement, and it “incorporates by reference” a Reimbursement Agreement you signed six years ago, it’s just possible that that “new” bonus may just not be worth it.

In a nutshell, keep an eye out for the phrase “incorporated by reference,” and if you see it, review each of the other agreements it combines by “incorporating by reference.” Say to yourself, “Is this a wise thing to do?” Frequently, the answer is “No.”

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