Be Alert to the Termination Provisions in the Employment Agreement
A company may ask a prospective employee (“employee”) to sign an employment agreement containing a termination provision prior to commencing employment. The offer of employment will be conditional upon the employee executing the employment agreement. What if the employee has long term employment (ie. 15 years) with company A when company B tries to solicit and induce him/her to leave their employment to join their organization? At the time of negotiating the employment agreement with company B, the employee should put their mind to what will happen if he/she accepts company B’s offer and then is terminated 18 months later. What does the termination provision stipulate in the employment agreement – what will the employee be paid if their employment is terminated without cause? The employee does not want to be in a position where he/she has given up long term employment, only to be terminated 18 months later by company B with ie. two months’ severance, or worse, only the minimum statutory entitlements.
Company B does not have to agree to take into account the employee’s prior years of service (or any part thereof) with company A under these circumstances when drafting the termination provision in the employment agreement. It would be prudent to retain an employment lawyer prior to negotiating specific terms in the employment agreement. An employment lawyer can provide advice to the employee on how to approach the negotiations on the termination provision in the employment agreement under these circumstances.
The employment lawyer can also advise the employee on the employment agreement by recommending additional terms to be included, identifying which terms to be removed, revising specific terms and rewording specific terms.