Retention contracts are often drafted by the employer and given to the employee to sign. It is important to understand that you do not have to accept the agreement “as is.” The employer is making the employee an offer, which can be (and should be) discussed and negotiated, before it is finalized.
In fact, most employers take the opportunity when drafting retention agreements to insert language that is beneficial to the employer. For example, the employer may include language in the contract that states you will only be paid your bonus if you are “actively employed” by a specified date. There can be significant disagreement surrounding what “actively employed” means, so your attorney can help you avoid this type of confusion, which often leads to litigation. Another common “red flag” in a retention agreement is the stipulation that the employee’s receipt of the bonus will be determined in the employer’s “sole discretion.” You do not want to put this type of power in your employer’s hands. Finally, any other language in the contract that makes your retention bonus contingent on something outside of your control (such as you get paid when the closing of a deal occurs) should be changed.
So, what if you have already accepted the retention bonus but you are reconsidering your decision? Whether you have found a better job, or you are just no longer interested in keeping your current one, you should confer with a lawyer experienced in negotiating, drafting and litigating retention contracts.
You and your attorney should meet to review the retention bonus contract and determine if there are any consequences for you, except for possible loss of the retention bonus. The retention contract will outline what happens to the money if the contract is breached. One important factor will be when you received the money. If you were paid a lump sum when the retention contract was signed, or you’ve received periodic payments, you have already obtained a profit from the agreement. However, if the lump sum was to be paid at the end of the retention contract, you have not obtained a profit from the agreement, making it easier for you to walk away.
Remember, breaching your retention agreement can leave hard feelings between you and your bosses and/or your co-workers. It is important to consider the potential impact this will have on your networking and prospects.
If you are considering walking away from a retention agreement with your employer, contact one of our experienced attorneys to discuss the consequences and your options. We can help you understand how leaving could affect your future and the best timing for leaving.
Mailly Law is knowledgeable and experienced in handling retention agreements. We will help you understand all of your options and aggressively negotiate every benefit and protection in your favor. Contact us today to schedule your appointment.