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The Trauma of Executive Termination – Part 3: The Protocol for Executives

While fully acknowledging the trauma of being terminated, a knowledgeable and experienced executive employment lawyer can guide the executive, whether a corporate CEO, an executive in finance or a college or university president, through the necessary decisions which must be made — and promptly — after the executive receives the package of termination papers. What follows is the protocol, some of which should already be in place even before the executive learns that he or she has been fired, and even if things appear to be going well and the executive has no real expectation of being terminated.

Every Executive Should Have the Following in Place, Even Before Being Terminated:

1.     Keep a Full and Current Copy of Your Executive Employment Documents Where You Can Access Them Immediately.

Every executive should have a file, immediately accessible, of all of his or her employment offers and agreement (no matter how old), any amendments thereto, any documents containing restrictions on an executive’s movement (such as confidentiality, non-competition or non-solicitation restrictions) as well as any sections of the company regulations, policies, procedures or handbook dealing with the executive’s employment, severance entitlement, restrictions, etc. Having these documents in a single folder outside the office where they can be accessed immediately by the executive will cut down on any executive’s anxiety upon learning of their termination (and you might be surprised how many otherwise brilliant executives struggle to find copies of their documents, particularly if they are not of recent origins). Being able to access the necessary sections of the employee handbook or company policies is important because, upon being terminated, the executive customarily is cut out of the company email system.

2.     Do Not Keep Any Personal Documents or Information on Your Work Computer or Company Devices.

Even a quarter of a century after the practice of relying on electronic communications became current in the workplace, many executives have not learned this lesson. Your medical records, personal employment information and any other personal data should never be kept on the company computer, server or other devices. Every executive should have a non-work email address and a personal storage mechanism for personal information.

3.     Be Familiar With the Terms and Conditions of Your Executive Employment.

Obviously, it is not necessary to have every detail of entitlement to severance or other benefits (including medical), as well as employment restrictions, memorized (this is the reason for that folder of easily accessible documents), but the executive should be generally familiar with the specific aspects of the employment relationship, and the executive’s entitlements and obligations if they are terminated without Cause. If you have used a good executive employment attorney in the negotiation of your contract or any amendment, the salient terms and conditions of your employment will have been fully explained to you. As a pop quiz, ask yourself whether you know the answer to the following question: In the event of an actual controversy with your employer after termination, is the executive required to pursue any claim in arbitration or can he or she avail themselves of the legal mechanism of the state or Federal courts? Do you know the differences?

4.     Have a Pre-Existing Relationship With an Executive Employment Attorney.

Again, if you employed a knowledgeable and experienced executive employment attorney in the contracting process, either for consultation or in the actual negotiations, you may already have this relationship and you should keep the attorney’s contact information on file. If you did not, it costs nothing to secure a referral to such an attorney and have a 15-minute phone conversation to learn the attorney’s background, references, accessibility, and personal “fit,” as well as issues of fees and costs, so that you can decide whether this is the right attorney to have on call.

5.     Do Not Hesitate to Consult That Attorney Promptly If Anything in the Work Relationship Suggests That There Might Be Any Problems on the Horizon.

Such problems are the distant thunder and lightning of a potential termination. Most senior executives sense in advance whether a negative work situation is likely to lead to the end of their employment. Do not be “penny-wise and pound-foolish” by hesitating to review these problems and your overall situation with your executive employment attorney as early as possible. This not only leads to meaningfully better results, but saves costs along the way.

6.     Do Not Be Careless in Failing to Promptly Frame and File a Written Response and Rebuttal to Any Unfair, Erroneous or False Negative Performance Reviews.

This step of the protocol is one key to good prior protection for the executive in advance of any termination. If you receive an unfair, slanted, misleading or, as often happens, simply factually erroneous performance review, it should not stand uncorrected in your personnel file. Discuss the situation with your executive employment lawyer and act promptly to put your corrections to the record in full and in writing, and make certain they are filed with your employer.

Protocol Immediately Upon An Executive’s Receipt of Notice of Termination:

1.     Place the Termination Papers and All of Your Significant Employment Documents in the Hands of Your Executive Employment Attorney.

Executive terminations are customarily accompanied by the employer delivering a stack of termination papers to the executive. These documents are usually considerably more voluminous than the old-fashioned “pink slip.” They ordinarily contain a proposal for the executive’s departure upon some proposed terms, including severance, in return for the executive agreeing to certain on-going conditions and giving the employer a full release of any and all potential claims the executive might have against the employer. There are almost always strict time deadlines in connection with the executive’s decision as to whether to accept the termination package offered by the employer, and these must be strictly observed. If the executive is over 40 years old, the employer, if it wants the full benefits of a legal release, must offer the executive at least twenty-one (21) days to consider the termination offer and discuss it with a lawyer. Time periods for executives under 40 years of age can be shorter, sometimes as little as a few days or a week. In circumstances where the employer wants certain legal benefits from claiming that the termination is part of a so-called “Reduction in Force,” there will be additional papers attached to the termination documents and the time period may be extended to forty-five (45) days. Given the level of executive distress upon termination, even the longest time periods run extremely rapidly. The earlier an executive employment attorney is involved in the process of reviewing these documents and negotiating aspects of the termination package, the better the result. Do not wait a few days or a week or even a weekend to secure an attorney and have them start to review the employer’s offer and the other applicable documents.

2.     Once You Have Put the Documents in the Hands of Your Attorney, Instead of Sitting Around Distraught or With Mounting Anxiety, Work Your Friends and Business Contacts About Your Future and Update Your Resume.

While your executive employment attorney is reviewing the papers and deciding on a negotiation strategy with respect to your termination package, you should be using your own time to be looking for your next position and putting yourself back into the executive employment market. Another item which every senior executive should have at the ready is a polished and updated resume.

3.     If You Have a Superior, Mentor or Any Senior Executive At Your Company Willing to Give You a Reference Letter, Contact Them Immediately to Ask for a Personal Letter of Recommendation.

Modern HR practice, in the event of termination, requires the company to give no reference or recommendation for any ex-employee other than “name, rank and serial number.” Accordingly, in the negotiation over the termination package, we sometimes ask for a written reference or recommendation to be attached to the separation and severance document, but there is nothing better than having a live human being willing to write a good personal letter, and such a letter can help overcome the negative aspects of the termination, so don’t hesitate to ask directly if you have a superior with whom you have a meaningful relationship.

4.     Be Meticulous About Complying With Your Continuing Employment Obligations, Including All Restrictions, With the Employer, No Matter How Disturbed You May Be By Having Been Fired.

No executive, even in the most unfair situation, should try to retaliate against the employer by violating any ongoing obligations of duty, confidentiality, non-disparagement or actual restrictions on future employment. Leave it to your executive employment attorney to deal with these issues as part of the overall negotiations of your termination package. “Self-help” may seem like sweet revenge, but it will almost certainly backfire.

5.     Trust in “Birnbaum’s Law”.

In 35 years of our legal representation of executives who have been terminated under a wide variety of circumstances, our uniform experience is that by a year following being terminated, the executive is no longer unhappy, indeed is often surprisingly grateful to be out of the job which was lost. “Birnbaum’s Law” is that every executive termination, no matter how traumatic in the moment, ultimately has a happy ending. Utilizing a knowledgeable and experienced executive employment lawyer to guide you through the termination process and, if applicable, negotiate the termination package, is an important step toward that new beginning.

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.