UK based Senior Executives frequently face a number of issues when negotiating Settlement Agreements with their employers. In order to maximise outcomes, it’s vital to grasp the key legal issues from the outset.
Some of the key issues for Senior Executives & Directors to be aware of include:
Restrictive Covenants
Contracts of Employment and Director’s Service Agreements often contain non-competition, non-solicitation, non-dealing, and confidentiality clauses. It’s important to understand the nature and scope of these types of clauses and to consider whether they are binding and/or whether they should be subject to the wider exit negotiations.
Notice Period
Senior Executives often have longer notice periods (notice periods of 3 to 6 months are not uncommon). Will the whole of the notice period be worked or is there scope for bringing forward the proposed termination date with the Senior Executive or Director receiving a payment in lieu of notice. Alternatively, is a period of garden leave being proposed? if so, what can the Senior Executive of Director legitimately do during the garden leave period in order to plan for and obtain employment elsewhere?
Bonuses, Shares, and Benefits
Many Senior Executives and Directors receive bonuses, shares, share options, LTIP’s or other benefits during their employment. What’s being proposed in respect of these? Does the existing Settlement Agreement proposal ensure that you’ll get everything you’re entitled to? Are there "good leaver" and "bad leaver" provisions that you need to be aware of. How will these affect the package you’re being offered?
Tax
Are the payments and benefits due to you under the proposed Settlement Agreement structured in the most tax efficient way?
Confidentiality, Non-Disparagement Provisions and Announcements
Who can discuss the background circumstances surrounding your exit from the business and organisation and what can they say? It’s important that Settlement Agreements deal effectively with these issues in order to ensure that the Senior Executive of Director’s position is protected and their prospects of obtaining a new role are not unfairly prejudiced. Similarly, will there be an internal and/or external announcement? If so, how should this be worded and what will it say?
Why use Harrington Law?
Settlement Agreements come in all shapes and sizes and are offered to employees in a variety of different situations. Our experience has taught us that individuals who have been offered a settlement agreement need lawyers who can “see the wood for the trees”, who understand the client’s needs, who focus on the key issues and who get the deal done. That’s us and that’s exactly what we do.