You may be looking for a new role due to recent layoffs or lack of satisfaction and fulfillment in your current position. Getting an offer is only the first step - make sure you review the employment agreement that is provided to you.
As an executive, it's important to understand the legal provisions that are included in your employment agreement. These provisions can have a significant impact on your rights and responsibilities as an employee, and it's essential to negotiate them before signing the agreement.
In this blog post, we'll discuss some of the key provisions that executives should consider when negotiating an employment agreement.
1. Compensation and Benefits: This section of the agreement should outline your salary, bonus structure, and any other benefits that you'll be eligible for as an executive. It's important to negotiate a compensation package that is competitive with similar positions in your industry, and that includes performance-based incentives to align your interests with those of the company.
2. Job Description: The agreement should clearly define your role and responsibilities as an executive. This will help to ensure that there is no confusion about what is expected of you, and it will also help to protect you from potential disputes with the company.
3. Termination: The agreement should specify the conditions under which your employment can be terminated, and how much notice must be given in the event of termination. This is especially important for executives, as they may be at a higher risk of termination than other employees. The agreement should outline different categories of termination, including “for cause” or “without cause”, and what compensation may be due after the agreement is terminated.
4. Restrictive Covenants. Some employers may include non-compete and non-solicitation clauses in the agreement to prevent you from working for a competitor or soliciting the company's customers or employees after your employment ends. Non-competes have been under constant challenge in the courts on the federal leval and in many states, including New York. Non-solicits, on the other hand, are generally acceptable – but pay attention to the scope and duration.
5. Confidentiality and Proprietary Information: The agreement should outline the company's expectations for maintaining the confidentiality of its proprietary information, including trade secrets and confidential business information. It's important to understand your obligations and the potential consequences for breaches of confidentiality.
6. Equity Grants: Many executives are offered additional compensation in the form of stock options or restricted stock units. It is important to know the difference and any
7. Change of Control Payments: Do you get a bonus if there is a change of control? For some executives, this is a key provision as they may be part of an overall strategy to grow the company toward a liquidity event.
Likewise, it is also important to carefully review any existing agreements you have in place with your current employer before you sign the employment agreement for your new position. There may be continuing obligations after you leave your current place of employment that may conflict with your new arrangement.
It is very important to carefully review and negotiate the legal provisions included in your employment agreement. By understanding your rights and responsibilities, you can protect yourself and ensure that your interests are aligned with those of the company. It is always advisable to consult with an attorney before signing any agreement to understand the legal implications and to negotiate the best terms possible.
Call Hogan Law Office PC at (516) 274-3250 for help with your employment agreement before you sign.