Well over 90% of employees in America find themselves in an “at-will” employment relationship, in which employers are given wide latitude to make personnel decisions. These decisions can be arbitrary or even irrational, and often leave employees without any legal recourse. However, there are exceptions to the at-will employment rule, such as discrimination based on protected categories or protection from retaliation.
Separately, members of labor unions typically work under a collective bargaining agreement, which often prevents employers from terminating members except for “just cause.” Unfortunately, for union members, their forum for challenging a termination without cause is the arbitration process, not a jury trial.
Savvy, highly placed executives sometimes wield sufficient leverage to negotiate individual employment agreements that afford them the best of both worlds. Individual employment agreements typically provide protection from discrimination and termination except upon “just cause,” but do not forfeit the right to pursue their breach of contract claim in court, as opposed to arbitration. However, a just cause provision can effectively be “paper tiger,” if the definition is left too broad or too subjective, or if the financial penalties for a no-cause termination are too low to effectively deter dismissal.
Contract Review & Negotiation
The financial aspects of the employment agreement are only the beginning of the various considerations that should inform an employment agreement negotiation. For example, employment agreements can prospectively address references, mutual non-disparagement obligations, re-hire eligibility and the nullification of non-compete/non-solicitation provisions.
At Van Kampen Law, we have assisted many highly placed executives with drafting and negotiating employment agreements. The firm’s experience litigating executive-level financial disputes has armed the firm with the perspective to artfully craft employment agreements on the front end to maximize the protections afforded by such agreements and to avoid the need to litigate disputes when the employment relationship sours.