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WHEN TO KEEP QUIET SO AS NOT TO JEOPARDIZE AN EXECUTIVE EMPLOYMENT DEAL (PART 2)

In addition to maintaining important legal protections, there are also significant practical considerations which should motivate all executive clients to keep quiet about the circumstances of their hiring or firing:

1. Telling co-workers, friends and non-spouse family members about the particulars of a negotiation may offer some emotional relief, but it can foul up your negotiation in a variety of ways. People may mean well, but they cannot meaningfully assist others with their employment situations. Also, they also gossip, sometimes with the misguided perception that they are doing the executive a service. Most employment contracts and offers of employment contain obligations of confidentiality; the employer simply does not want other executives to know what any other executive is making or the terms of a new hire’s contract. If, for example, one executive tells another executive about the compensation he or she has been offered, that offer may be withdrawn.

2. In a termination scenario, the need for silence is, if anything, even greater. If you have a credible claim to better treatment (for instance, if we have information showing that your firing was motivated by unlawful discrimination) and you spill the beans to other employees, we may be told that our negotiations to obtain a better separation package for you have come to an abrupt end. The employer does not want anyone else to know that it may have acted improperly or is treating you better than it would treat other executives. Once you have spoken about your situation, you give the employer a reason to revoke its prior offer, since one significant aspect of the employer’s incentive to make a deal — the assurance of confidentiality — has been eliminated. Moreover, if the parties do reach a mutually agreeable resolution after an executive’s termination, you can be assured that the written document which embodies that resolution will contain a strict confidentiality clause. To have violated that confidentiality obligation in advance could be dangerous and even fatal to the deal. (Please understand that this comment is not addressed to employees who were legitimate whistleblowers.)

Additionally, most separation agreements contain prohibitions against disparaging the employer. Saying nothing is a good way to be certain that none of your comments can be interpreted as a negative reflection on the employer.

3. Clients who discuss the facts and theories of their own legal matter — or even allude to them — with anyone outside the privileged circle of their own executive employment attorneys also risk saying something which makes their own situation worse.

Put another way, there is absolutely no upside in talking to anyone other than your legal advisors about what has happened to you or describing the theory of your “case.”

So, by all means speak out when it comes to your societal beliefs, but as for your own employment situation, it’s better to consult an experienced executive employment attorney first. If we think you should speak out, we will tell you.

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.