negotiating employment agreements by neil klingshirn

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Negotiating Employment Agreements By Neil Klingshirn

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Page 1: Negotiating Employment Agreements By Neil Klingshirn

Negotiating Employment Agreements

By

Neil Klingshirn

Page 2: Negotiating Employment Agreements By Neil Klingshirn

Employment Agreements

Compensation and benefits. Duration. Duties. Arbitration. Non-compete and NDA. Severance.

Page 3: Negotiating Employment Agreements By Neil Klingshirn

Non-competition Agreements

Non-competition. Non-solicitation. Non-interference. Geographic scope. Duration Enforcement

Page 4: Negotiating Employment Agreements By Neil Klingshirn

Severance Agreements

Severance amount. Unemployment compensation. Release of Rights Tax treatment of the severance payment. Lump sum vs. salary continuation. Benefits continuation, especially health

insurance;

Page 5: Negotiating Employment Agreements By Neil Klingshirn

Severance Agreements (cont.)

401K Rollover. Outplacement services. Retraining opportunities. Eligibility for rehire.

Page 6: Negotiating Employment Agreements By Neil Klingshirn

Severance agreements (cont.)

Use of office and support staff. References and non-disparagement. Confidentiality. Enforcement.

Page 7: Negotiating Employment Agreements By Neil Klingshirn

Negotiating Favorable Terms

Know the law. Create leverage. Identify goals.

Page 8: Negotiating Employment Agreements By Neil Klingshirn

Employment Law Overview

Contracts Statutes Common law

Page 9: Negotiating Employment Agreements By Neil Klingshirn

Contracts

Wages for work. Employment at-will, unless otherwise agreed. Other mutually acceptable terms. Remedies for breach.

Page 10: Negotiating Employment Agreements By Neil Klingshirn

Statutory Rights

Discrimination. Retaliation. Trade Secrets. Wages and Hours. Benefits and Leaves. Safety and workers’ compensation. Civil service.

Page 11: Negotiating Employment Agreements By Neil Klingshirn

Common Law Employment Rights

Implied contracts. Public policy protections. Minority shareholder/employees. Duty of Loyalty. Privacy.

Page 12: Negotiating Employment Agreements By Neil Klingshirn

Employment & Non-compete Leverage

Your value. Competition for your services. Competition for your job.

Page 13: Negotiating Employment Agreements By Neil Klingshirn

Employment & Non-compete Goals

Maximize:– Compensation and benefits.– Duration. – Severance.

Minimize:– Restrictions.

Avoid:– Arbitration. – Non-competes and NDAs

Page 14: Negotiating Employment Agreements By Neil Klingshirn

Employment Agreement Negotiation

Obtain and evaluate the offer. Craft a counter.

– Be realistic.– Leave room to move.

Justify your position.– Take the employer’s perspective.– Back it up with objective data.– Blame it on a higher power (e.g., the spouse).

Page 15: Negotiating Employment Agreements By Neil Klingshirn

Compensation, Duration & Severance

Compensation is market driven, but:– Define bonus, commission terms;– Vacation, sick time is negotiable;– Consider stock options; – Avoid equity as compensation.

Duration is usually at-will, but try:– One year, with automatic renewal (evergreen);– Notice for terminations without cause;

Severance is ticklish, but try:– Uncertainty of the position;– Trading off for duration, non-competition;

Page 16: Negotiating Employment Agreements By Neil Klingshirn

Non-competition

Just Say No. Limit restrictions to:

– Your own customers;– One year or less;– Those imposed by Trade Secrets laws.

Trade for: – severance, – compensation.

Page 17: Negotiating Employment Agreements By Neil Klingshirn

Arbitration

Just Say No. Limit to violations of the Agreement

– Carve out statutory rights;

Reject limitations on rights and remedies; Shift costs to the employer.

Page 18: Negotiating Employment Agreements By Neil Klingshirn

Severance

Severance plans. Know your rights.

– Violations = claims.

Know the value of your claims.

Page 19: Negotiating Employment Agreements By Neil Klingshirn

Severance (cont.)

Obtain and evaluate an offer. Craft a counter.

– Be realistic.– Leave room to move.

Justify your position.– Take the employer’s perspective.– Back it up with evidence.

Be patient.

Page 20: Negotiating Employment Agreements By Neil Klingshirn

Special Severance Issues

Unemployment compensation.– Agreement not to contest.– Pay severance as lump sum.

Health insurance– COBRA.– Stimulus subsidy.

Eligibility for Re-hire.

Page 21: Negotiating Employment Agreements By Neil Klingshirn

Carve Outs from the Release

EEOC’s right to investigate; Right to apply for unemployment; Wage and Hour claims; Pension, 401(k); Claims arising after the agreement.

Page 22: Negotiating Employment Agreements By Neil Klingshirn

Get it in Writing

Review with an attorney. Waiting periods. Beware of the boilerplate.

Page 23: Negotiating Employment Agreements By Neil Klingshirn

The End

“The Best Time to Understand an Agreement is Before you Sign it.”