The balmy summer weather makes me philosophical, and that means heading back to the basics. Listed below are those practical rules that, over many years as executive employment attorneys, we have found consistently best serve our clients in a world of contested facts and ideas.
People like rules, which is why we still read Marcus Aurelius, particularly when they are pithy enough to stay in the memory. The following rules for executives do not pretend to the wit of Hall of Fame pitcher Satchel Paige (famously “Don’t look back. Something might be gaining on you!”) or the irony of the composer Richard Strauss (one of his “Ten Rules for Young Conductors“ is “Don’t give the brasses an encouraging look but never let the woodwinds out of your sight.”), but they are, to mix a metaphor, the battle-tested fruits of long and sometimes painful experience:
1. Don’t Ever (Ever) Send Money to Someone You Don’t Know.
The FBI Cybercrime website says that it has received over six million complaints of internet scams. One reason that we have stopped asking for “retainer fees” at the outset of our legal engagements is that I don’t want anyone to send money we have yet to earn.
2. Don’t Resign!
If you are tired of hearing this bedrock principle of our executive employment practice, I am even more tired of the upset feeling in the pit of my stomach when a new client comes to us having already violated this rule by resigning before we have had an opportunity to address his or her legal situation. If you resign, you may forfeit much if not all of your leverage when it comes to negotiating an adequate severance package.
3. Don’t Assume That Just Because You Are an “At Will” Executive, You Don’t Have Any Rights.
I have recently written a blog on this topic, which is on our website https://gbirnlaw.com.
4. Know Your Own Contract.
A shocking number of brilliant and successful senior executives do not know or understand some of the basic terms under which they are employed. Many cannot find a copy of their own offer letter (which is a contract). Are you subject to a non-competition or non-solicitation restriction? What (if anything) is your severance entitlement? Are you bound to arbitrate in the event of an employment dispute? Don’t let these and other fundamental terms remain a mystery until it is too late. (If we had represented you when you were hired, we would have explained all of these things before you ever signed up.)
5. Don’t Be Blinded by Big Numbers.
The prospect of big bonuses or big incentive compensation has led many executives to ignore the highly tenuous or conditional language of the promises behind the outsized rewards. The financial services industry, in particular, is famous for offer letters filled with weasel language (no slur on weasels).
6. Don’t Rely on Any Entitlement Which Is Not Backed Up by a Firm and Definite Written Promise.
Although some oral agreements are in fact legally enforceable, there is still a rationale for the old joke that “an oral agreement is not worth the paper it is not written on.” An executive needs to get all of his or her entitlements in a writing which is sufficiently full and definite to make it easy for a judge or arbitrator to find that the executive is entitled to the fulfillment of that promise.
7. There Is No Such Thing As “Boilerplate” Language in an Executive Employment (Or Any) Agreement.
This hard-won lesson from an early mentor has stood me in good stead throughout a long legal career. Every paragraph, sentence and word of a contract means something and, if you don’t believe it, or, believing it, don’t understand what you are agreeing to, there is a distinct possibility of “sorrow tomorrow.”
8. If an Executive Thinks Something Is Wrong, It Almost Certainly Is.
This, too, was the subject of a recent blog topic on our website (“When Things ‘Go Bad’ for Senior Executives and College and University Presidents”). The overriding moral of this rule is that an executive should trust his or her instincts. When an employment problem arises, it is unlikely to get better over time.
9. Don’t Be Your Own Executive Employment Lawyer.
This could have been either the first or the last of these rules, highlighted in neon lights. Are you concerned about the cost in legal fees to hire a knowledgeable executive compensation attorney to advise you before taking any step which would affect your employment situation? Those fees are pennies compared to the fees you will spend to have a lawyer attempt to rectify a wrong move or fix a problem which you have, even unwittingly, made worse by an action or omission which has not been thought through with your legal advisor.
10. And — Always — Get Legal Advice Sooner Rather Than Later.
I have saved this rule for last because it modifies many of the earlier rules. The earlier an executive employment attorney is brought in to any legal situation — optimally to negotiate before the executive is hired — the greater the chances of a good result (and ongoing good results) for the executive.
I take this opportunity to wish all of our readers, friends and clients a sweet and lazy July and August as, hopefully, the world safely opens up again.