As executive employment lawyers, we are familiar with the ordinary ups and downs of hiring and firing in the sectors we serve: higher education, finance, media and industry.
These times are anything but ordinary. The pandemic, political and economic turmoil, and general uncertainty in many areas of life have created an executive employment landscape more unsettled than at any time since 2008, and then the problems were primarily if not solely economic.
Today, hiring for executive jobs is erratic to say the least while good executives are being terminated for reasons more than ordinarily outside their control. As just one example, in higher education, outstanding leaders with excellent contracts (some of which we negotiated) are simply walking away from important positions, saying they have suffered too much stress. Other college and university presidents are being terminated for no apparent reason other than the fact that some boards of trustees, perhaps frustrated that COVID has constrained many of their management options, have simply decided that the one thing they can do while the pandemic rages is spend the school’s money on a search for a new president. It is “Hard Times,” as Dickens said, for many executives.
Our motto as executive compensation attorneys is that when times are tough, it is all the more important to stick to those “first principles” which we have found to be an executive’s most consistent friends.
Here are some of them:
1. Don’t resign! We cannot stress how important it is not to arbitrarily abandon your current position. Excellent, conscientious executives are often so frustrated by the obtuse or willfully destructive behavior of their employers that they get fed up and send in a resignation notice, giving up their valuable positions with little thought about the alternatives, and often without having another job waiting in the wings.
This act of defiance may be momentarily satisfying on an emotional level, but it can be legally disastrous. It gives up the most meaningful leverage we have to negotiate a way to ameliorate an executive’s bad situation and weakens our ability to craft a financially advantageous exit package. Indeed, sometimes resignation even defeats any attempts to revive negotiations at all. As a lawyer, there is very little as distressing as getting a call or email from an executive client seeking counsel after that executive has already resigned. That one impulsive act can cost the executive thousands, sometimes many thousands, of dollars in potential compensation.
2. And particularly don’t resign when the employer, no doubt for its own purposes, is proposing that the executive voluntarily fall on his or her own sword “because it will look better”! No executive should be taken in by this old dodge, no matter how cleverly the employer insinuates that it is “in your interest” to resign immediately rather than be fired.
3. What you immediately should do is contact your executive compensation attorney. What should an executive do if tempted or entreated to resign? This is the moment, if not before (see below), to consult a knowledgeable executive employment lawyer about all of the executive’s options. These options can include pushing back on unfair (or downright rigged) negative performance reviews, correcting an inadequate or misleading employment record, resisting continued improper treatment by the employer, and possibly even structuring a separation package which will provide a bridge allowing the executive to transition to another situation, sometimes within the same organization, but usually to another, better opportunity.
4. In the words of the old adage, the early bird gets the worm. Of course, the best time to consult an executive compensation attorney is at the first sign of trouble in the workplace. If an executive has an intuition that matters are becoming murky or headed in a negative direction, that executive should not wait to take legal advice. The earlier we are involved in an employment situation, the better result we can get for a client.
5. Don’t be penny-wise and pound-foolish. Here is another old adage which continues to be valuable. Good legal advice, based on a careful, realistic and factual review of each particular executive’s situation, always pays for itself and sometimes does so many times over. It gives an executive who is naturally buffeted by powerful emotions and unexpected changes in his or her particular employment situation a firm foundation for smart and steady decision-making about his or her business career. It is also far less expensive than trying to solve a problem after the fact or through litigation.
