Drafting Employment Agreements. Overview

Transcription

1 Drafting Employment Agreements Carrie Pixler Ryerson! 1 Overview We will discuss provisions you should consider when drafting employment agreements Bonus topic: severance agreements and releases 2 1

2 Introduction Be familiar with the applicable State law Offer, acceptance and consideration Offer Letter v. Employment Agreement Independent Contractor Agreement v. Employment Agreement 3 Preamble & Recitals Establishes the parties to the agreement This Employment Agreement ( Agreement ) is made as of July 17, 2013 ( Effective Date ), by and between John Doe ( Employee ) and Fennemore Craig, P.C. ( Employer or the Company ). Establishes the reason for entering into the agreement The Company is... [description of company] (the Business ). The Company has developed certain knowhow, techniques, programs and other information relating to the Business that is proprietary and valuable to the Company. Define the relationship between the employer and employee. Is this an existing employee or new employee? 4 2

3 Term of the Agreement Specified number of years? At-will? Renewable term? Automatic renewal? 5 Termination of the Agreement At-will? Either party may terminate upon days written notice? For cause termination? Death or disability of employee? Sale of assets or dissolution or bankruptcy of the employer? 6 3

4 Salary Waiver of treble damages under Arizona law Benefits Business expenses Auto allowance Compensation Professional development expenses Bonus Stock Deferred compensation (ERISA) Professional liability insurance 7 Confidential Information Define confidential information Non-disclosure Non-use Return of confidential information Assignment of employee inventions Any other unique/proprietary information 8 4

5 Non-solicitation (Limited in California) Customers? (anti-piracy or hands-off) Employees? (anti-raiding) Length? Non-compete (Invalid in California) Scope? Length? No work? Restrictive Covenants Consideration for existing employees 9 Restrictive Covenants Ensure that the covenants survive termination of the agreement Enforcement provisions Restrictions are reasonable and necessary to protect... Blue Pencil Rule Employee acknowledges that the Employer will be irreparably harmed and that monetary damages are an insufficient remedy. Employee consents to enforcement of the covenants through injunctive relief. 10 5

6 Additional Representations and Warranties Employee is not subject to another non-compete or confidentiality agreement Cooperate with transition if employee is separated from the employer Exclusive services provision Best effort covenant Conflicts of interest 11 Additional Provisions Remedies Arbitration Waiver of jury trial Indemnification Return of company property Confidentiality of provisions in agreement 12 6

7 Additional Provisions Choice of governing law Recovery of attorneys fees Assignment The employer should reserve the right to assign the agreement to successors to allow for mergers, consolidations, etc. If a personal services contract, prohibit the employee from assigning the contract Severability Choice of forum 13 Additional Provisions Non-waiver provision Amendment/Modifications Counterparts Entire agreement 14 7

8 Severance Agreements & Releases Generally, only offer severance in exchange for a release Terms of severance ERISA issues Cooperation clause in event of government investigation/litigation ADEA Over 40/Under 40 RIF Fair Labor Standards Act claims 15 Severance Agreements & Releases Non-admission clause Non-disparagement Return of company property Restrictive covenants Transition clause Workers compensation EEOC charges (an agreement cannot prohibit the individual from filing a charge of discrimination) 16 8

9 Questions? Carrie Pixler Ryerson