Maryland Virginia Washington DC Employment Lawyers
Zuckerman Law represents Maryland, Virginia and District of Columbia executives and senior professionals in negotiating severance agreements, employment agreements, non-compete agreements, non-disclosure agreements and other contracts related to employment.
When an employer presents you with a severance agreement, you should assume that the agreement protects the employer’s interests, not your interests. Therefore, it can be useful to get advice on the scope of the restrictions that you would agree to abide by under the agreement, and on whether you are waiving a valuable claim against your former employer.
Zuckerman Law can also assist you to determine whether the termination of your employment gives rise to legal claims. If your former employer terminated you for an unlawful reason, you should not waive your right to bring a claim, including a potential claim of wrongful termination, discrimination, or retaliation.
Employee Rights in Severance Agreements
Some severance agreements contain unlawful provisions that interfere with employee’s rights under anti-discrimination, anti-retaliation, and whistleblower protection laws. Before entering into a severance agreement, consult with an experienced attorney to evaluate whether your former employer is violating your rights. Examples of improper or unlawful provisions in severance agreements include:
- a waiver of a claim that would arise or accrue subsequent to the effective date of the agreement.
- a waiver of the right to file a charge of discrimination or retaliation.
- a waiver of vested right under a benefit or pension plan.
- a waiver of the right to testify, assist, or cooperate in an investigation of a charge of discrimination or retaliation.
- an agreement not to report a violation of law or regulation to law enforcement or regulatory agencies.
Entering into a severance agreement can result in an employee waiving or relinquishing valuable rights and agreeing to restrictions on future employment. Therefore, it is critical to get experienced counsel to review a severance agreement and negotiate favorable terms for the employee.
Basics of executive compensation
When joining or exiting a company, executives face unique challenges to ensure their rights are protected given the variety of compensation they receive beyond a salary.
Knowing precisely what your compensation consists of and how to maximize its value during negotiations is essential.
Below is a high-level review of the key concepts, and more detail will be provided on each subject in future posts.
An executive’s base salary is the most straight-forward type of compensation. It is usually characterized as an annual salary and often paid in the same intervals as other salaried employees (for example, monthly or bi-weekly).
Salaries among executives vary greatly based in part on the industry and potential value of the other forms of compensation offered.
Bonuses (short-term incentives)
Many different types of bonuses exist, including a signing bonus and different forms of annual incentives. Companies use bonuses to incentivize executives to achieve the company’s short-term business goals. The bonus itself is commonly paid as a percentage of the base salary.
Various targets are usually set to encourage superior performance and may include criteria like: development of a new product; achieving a certain level of sales; and other performance goals within the executive’s division or department.
Long-term incentives routinely comprise the biggest portion of an executive’s compensation. Companies offer long-term incentives to retain talent and encourage executives to realize the company’s strategic goals and objectives.
Long-term incentives are normally granted as some form of equity compensation, such as:
- stock options (the executive can buy or sell the company’s stock at an agreed (exercise) price within a set period of time)
- restricted stock shares/units (an award of stock with restrictions usually contingent upon working for the company a particular length of time)
- performance shares/units (an award of stock with restrictions often related to achieving company performance goals)
Typically, the equity grants will vest over a specific period of time, essentially making the executive an investor in the company’s performance. The vesting period varies by company but usually covers a period of 3 to 5 years. Long-term incentives that have not vested are typically forfeited once the executive departs the company.
The manner in which a company characterizes an executive’s termination of employment is extremely important. For example, if the employer terminates the executive for “cause,” then s/he will often lose most rights to unvested long-term incentives and other future compensation. If the executive resigns with “good reason” or is terminated without case, however, then the executive is routinely able to secure significant severance benefits.
Thus, how an employment agreement defines a termination for “cause” and a resignation with “good reason” is vital to know if considering a departure. And when negotiating an employment agreement, it is essential to define this terms to give the executive adequate protection.
Before signing a severance agreement, consult with an experienced Severance Agreement Lawyer. Call 202-262-8959 or click here to schedule a consultation.
Maryland Virginia Washington DC Discrimination Lawyers
If you have suffered discrimination or retaliation for reporting discrimination, we might be able to help you seek compensation for your losses. We have experience representing clients under a wide range of federal and state anti-discrimination and anti-retaliation laws, including in claims of:
- Glass ceiling discrimination;
- Sexual harassment;
- Gender discrimination, including Equal Pay Act claims;
- LGBT discrimination;
- Religious discrimination;
- Disability discrimination;
- Pregnancy discrimination; and
- Age discrimination
Click here to see our videos answering frequently asked questions about discrimination and retaliation.AgeDiscriminationLawyers_Infographic
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