Hopefully you have read our prior blog that is titled “Retention Agreement vs. Severance Agreement: Where do Releases Fit in? Part 1.” If not, you may want to refer to it before continuing with this blog. Below are a few pointers on what to look for when you are presented with a retention agreement that contains release or waiver of claims language.
● Remember that the employer is coming to you to sign the document for a reason, meaning you have something they want or need. This means that you have a certain amount of leverage. You do not have to automatically accept the agreement “as is.” Don’t be afraid to negotiate the terms.
● How do you spot release or waiver provisions in the proposed retention contract? Look for terms such as “releasor, releasee, claims, obligations, judgments” and other similar words. If you see the phrase “promise not to sue,” it is likely a release that should not be in your retention contract.
● Obviously the amount of money you will be paid under the agreement is of critical importance. It may be that the amount being offered is significant enough that you are willing to sign the contract even if it is a disguised severance agreement. However, you must be prepared for the possibility that you will be laid-off in due time if you sign this type of contract.
● If the payment being offered is not enough to warrant your release of claims, don’t be afraid to ask your employer to remove it. If it isn’t in your retention contract, it leaves the door open for you to receive a severance payment if you are laid-off in the future. In the alternative, you can request additional compensation in exchange for your release or waive of claims.
● Finally, if your circumstances change part-way through the retention period, you can always try to renegotiate your agreement. In other words, if you are offered another job during your retention period, you may ask your employer to pay a pro-rated retention payment or even increase your payment to motivate you to stay.
When it comes to retention agreements, negotiation is crucial. Whether you are an executive or an employer considering a retention compensation package, let our knowledgeable and experienced attorneys assist you in negotiating the best possible terms for you. Contact our office today to schedule a consultation.