What is Negotiable in Executive Employment Agreements?
There are a number of negotiable factors in executive employment agreements. These include compensation and benefits, such as salary, bonuses, stock options, and perks like car allowances or club memberships. Additionally, executives may negotiate terms related to job duties and responsibilities, including reporting structure, decision-making authority, and performance metrics. Other negotiable aspects may include termination clauses, severance packages, non-compete agreements, and dispute resolution mechanisms. Addressing relocation packages and renewal provisions may also be of help when negotiating an agreement. For foreign nationals, the executive should be mindful of their visa and negotiate visa renewal assistance from the employer in the event of termination.
Should You Negotiate a Severance Package Up Front?
Negotiating a severance package up front may be a wise decision for executives entering into new employment agreements. Executives can protect themselves in the event of unexpected termination or job loss by addressing severance terms during the initial negotiation phase. A well-negotiated severance package can provide financial security and peace of mind and offer a cushion during transitional periods. Moreover, negotiating severance terms up front demonstrates foresight and strategic planning which signals to employers that the executive values fair treatment and is proactive about protecting their interests. For a comprehensive analysis of severance packages, you can read more here.
How Strict are Non-Competes in New York City?
Non-compete agreements in New York City are subject to certain legal standards and limitations. Among other things, these agreements must be reasonable in scope, duration, and geographic restriction to be enforceable. However, the Federal Trade Commission recently issued a nation-wide ban on non-competes for all but senior executives which is presently set to become effective on September 4, 2024. New York courts tend to scrutinize non-compete agreements closely, particularly those involving high-level executives. Courts consider factors such as the executive’s access to confidential and proprietary information, the potential impact on competition, and the public interest when evaluating the enforceability of non-compete agreements. For a more detailed analysis of non-compete agreements in New York City, you can refer to this resource.
Should I Hire an Attorney to Review My Employment Agreement?
Yes, it is highly advisable to hire an experienced attorney to review an executive employment agreement before signing. Executive employment agreements are complex legal documents that can have significant implications for an executive’s career and financial future. Oftentimes, an employer will start negotiations with a boilerplate agreement written by an attorney and swayed towards the employer. An attorney with expertise in employment law can chip away at the boilerplate and identify potential pitfalls, negotiate favorable terms, and ensure that the agreement protects the executive’s interests. By seeking legal counsel, executives can gain peace of mind knowing that their employment agreement is fair, enforceable, and in their best interests.
Conclusion
If you are in the process of negotiating an executive employment agreement and want to ensure that your career and financial future are protected, reach out to a member of our team of experienced employment attorneys to discuss your next steps.
Contributions made by Katherine Baeppler
