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“Strike While The Iron Is Hot”: The Value of a Good Offer Letter or Employment Agreement in Times of Upheaval and Uncertainty

When asked by some reporter the secret of his success, Hall of Fame pitcher Lefty Gomez famously replied, “Clean living and a fast outfield.”

As executive employment lawyers, the foundation for our clients’ success, if somewhat less colorful than that of the legendary Yankee southpaw, can be almost as easily stated: when being recruited for even the most enticing executive position, successful executives should spend the time and money necessary to negotiate, under the guidance of an experienced attorney, a better and more protective offer letter or employment agreement than the first version of those documents presented to the executive by the employer.

In fact, having a fully integrated employment agreement or even only a carefully negotiated offer letter is the executive’s best, and often only, protection against challenging times like the current pandemic era, when companies, often acting merely out of fear, are dramatically re-thinking their long-term business strategies. At such a time, the executive who when they were hired, as little as a year earlier, was deemed essential to a company’s plans, may find himself or herself made redundant. When that executive calls their employment attorney, they will hear the lawyer’s inevitable initial inquiry: please let us see a copy of your employment agreement or offer letter. Executives who have been cavalier about refining the terms of their employment at the outset, for whatever reason (“I doubt I can do better”; “They will never make any changes in that offer, which looks like a form”; “I don’t see any possibility of myself being terminated in the near future”; “Should I really spend the legal fees to have an executive employment attorney review this and advise me?”) — all of which may have seemed perfectly good and logical reasons at the time — will find themselves at a decided disadvantage in their termination negotiations.

And, frankly, many otherwise brilliant executives often have misapprehensions, both legal and tactical, when it comes to involving an executive employment attorney before they accept the offer or sign the agreement. These misapprehensions may turn out to be costly later on.

It is worth considering a few of these issues, drawn from some of the questions with which we are frequently presented (FAQs):

Frequently Asked Questions

1.     Q.     “This is a job I really want. By involving an attorney to help me consider the pros and cons of my job offer, won’t I make the prospective employer think that I will be a difficult employee? Could they withdraw the offer?”

A.     Actually, based on our extensive experience, we believe the opposite is true. Whoever is doing the hiring on the employer’s side may be momentarily relieved when the executive makes the hiring process “easy,” but they will also wonder about the executive’s lack of sophistication and self-care: “If this executive has so little concern about the parameters of the job, and so little interest in ascertaining what terms are in place if things do not work out, I wonder if this same carelessness will show up in their performance, or maybe he or she has so few employment options that we should re-think whether they are such a good candidate for us to hire.”

2.     Q.     “Are there ways to protect an executive’s legal position while indicating to the employer that he or she intends to be a flexible and company-centered employee?”

A.     Of course. The correct approach starts with executive employment attorneys who pride themselves on being deal-makers, not deal killers. Sometimes the client wants us to negotiate directly on their behalf, but just as often we can be helpful behind the scenes, reviewing the offer documents and coaching the client in his or her negotiations by way of suggesting vital improvements which the client can achieve on their own through a dialog with their point of contact at the prospective employer.

3.     Q.     “Is it worth negotiating an offer letter, even one which appears to be a form used by the company?”

A.     Absolutely yes. An employment offer letter is a contract (some clients have the misguided notion that an offer letter is not a contract simply because it is not a fully integrated employment agreement), albeit a contract which, if not negotiated, almost certainly is mostly dedicated to protecting the employer and offers only minimal protection for the executive. In fact, these “form” offer letters can often be negotiated to include essential protections for the executive. Such protections, by way of example only, are the provision and quantification of severance if the executive is terminated without Cause, as well as items that were mentioned or discussed during the hiring process, such as the guarantee of the amount of the first year or two of the executive’s bonus, which mysteriously never made it into the formal offer letter.

Every executive must remember that their leverage to get both a good deal in the present as well as vital protections against the moment when someone hands them a termination package along with the statement that “we have decided to go a different direction with the business,” will never be greater than at the moment when the employer has decided to hire the executive, but the executive has not yet signed the offer letter and accepted the position! Don’t let this moment pass without getting what you need!

About the Author

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George Birnbaum

Since 1980, sophisticated business people have relied on George to apply the meticulous preparation, attention to detail, and devotion to his clients he learned from fabled trial lawyer Louis Nizer. A graduate of Harvard College and Harvard Law School, George has over 35 years of distinguished deal-making, litigation, mediation and arbitration experience which he has used to negotiate high-stakes agreements for senior executives and select business clients throughout the United States.