Negotiating employment opportunities should be exciting and challenging. Both parties want to win and, ideally, to win together and for the foreseeable future. An employment agreement should state the common goals and expectations in a clear, concise and complete manner. A good legal advisor should assist the executive with skill, tact and focus.
There are thousand questions that could be asked, and ten thousand suitable answers, but this this article is the second in series of three articles that identify and explore a few common and critical areas.
Part 2: Who is on my team, whose team am I on and how do I impact the line ups?
Everyone knows there is no “I” in team but most people also know there is one “I” in attitude and two in mobility. The analysis of a job opportunity has to include whether and to what extent an executive can build, develop and change his or her team. The executive also needs to know how things look upstream. Both groups can, and should, impact the chances of a successful endeavor by the executive. An employment agreement should include a reasonable description of the areas of responsibility and the reporting channels.
As for the employees or employee group that report to the executive, part of the process is due diligence during the interview process. The organization structure might also be included in the job responsibilities description in the employment agreement. The executive might want to negotiate a few must “must haves” –whether it is the right to approve important hires such as the director of sales or the right to recruit an executive assistant from a prior job.
An executive might also be interested in a company because of its leadership. While not common, an employee can discuss his or her right to exit if certain executives leave. More importantly, the executive in a privately held company might want to ensure a contractual right to meet with the Board of Directors. In situations, where a termination might turn on whether there is “good cause” or “good reason”, the fellow executives might be part of the problem and therefore a high level executive might need to go straight to the top to discuss critical decisions.
Finally, many privately held companies are owned, at least in part, by private equity funds. Those funds have portfolio companies and those companies have needs for executives. An employee should know the ownership structure and be aware that the world is indeed small and one job might lead to another based upon the people who work for you, people you work for and companies you keep. An employment agreement might exempt future opportunities within the portfolio structure that would be exempt from certain post employment restrictive covenants.
A carefully negotiated employment agreement will touch upon the areas of responsibility and reporting and a good attorney will work closely with a candidate to ensure that the agreement is clear, concise and comprehensive in these areas, without slipping into areas that are not good subjects of contracts.
The information in this article is for informational purposes only and does not constitute formal, legal advice. If you have any questions regarding the information contained in this article, please consult with Catherine McGivney at 312.251.2260 or any attorney at RM Partners Law LLC for advice about your particular circumstance.
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