Well-drafted employment contracts can offer executives many protections. For example, a contract containing the proper provisions can protect executives from unfair terminations. However, we urge you to remember that these provisions work both ways. This means that you cannot simply leave your position without risking the financial benefits you have worked so hard to secure.
Most employment contracts clearly identify the length of the proposed employment. When this term expires, the parties can then renegotiate the contract or choose to part ways. In most cases, resigning before the term has expired nullifies the executive's right to profit-sharing, bonuses and other financial incentives. However, it may still be possible to walk away from your position with some of these financial benefits intact.
A common provision appearing in many executive employment contracts revolves around resigning with good reason, which can preserve the terms of your agreement. Examples of good reason resignations include the following:
- Reduction in your base compensation
- Relocating a significant distance from your current job location
- A significant change in your authority or your job responsibilities
- Merger with another company
- Change in control of the company
We believe that it is critical to ensure that your job agreements contain provisions empowering you to resign with good reason in situations like the ones above. Having an attorney carefully review your employment contract is an effective way to accomplish this goal.
With the right approach before you sign on the bottom line, it is possible to leave your job with at least some of the financial benefits your employer promised to deliver. Continue exploring the many executive-centered topics on our website if you would like additional information about employee contracts in Michigan.