If you are being offered a retention agreement by your employer, it is important to focus not only on the rewards being offered (salary, benefits, bonus, etc.), but also the risks (restrictions on your employment autonomy). Many people do not think about how a retention agreement can restrict their freedom.
A retention contract should be taken seriously. In order to ensure you are fully protected under your retention agreement, you should work with independent counsel. Having an experienced advocate on your side to review and negotiate your contract can significantly increase your leverage with your employer. You should also consider the following:
● Never sign a legal document without reading it carefully, including a retention agreement. While this may seem obvious, dollar signs can be very distracting!
● Remember that a retention agreement is only a proposal. You do not have to take it “as is” and it can be negotiated. If there are provisions you do not like, be sure to point them out to your attorney and ask what your options are regarding them.
● One of the most important negotiations in a retention agreement is the amount of your bonus payment. If you are a key employee that is crucial to a merger or other deal, you might be surprised how much your company is willing to pay to keep you employed.
● Be sure to ask your employer of any pending or planned restructuring, realignment or reduction in employees. You should confirm that your retention agreement includes language that your position with the company, including your salary and benefits, will not be materially altered during your retention period.
● Remove language in your retention contract that prohibits you from searching for and negotiating future employment. This includes closely
examining non-compete restrictions that could bar you from working in the industry, even after your retention period expires.
● If your retention contract includes penalties (such as payment of your employer’s legal fees) if you leave before your retention period ends, you will want to request to have this language removed.
Mailly Law is knowledgeable and experienced in handling retention agreements. We will help you understand all your options and aggressively negotiate every benefit and protection in your favor. Contact us today to schedule your appointment.