The most significant issues in any employment or severance agreement are going to be personal to that situation, and will be driven in part by special issues and circumstances. For instance, succession planning issues may be incredibly important to the organization when the CEO is 65 years old and there is no clear successor, and may be far less important when the CEO is 45 and there are very able executives ready to assume the CEO role if necessary. With that said, there are certain considerations to keep in mind for all who are drafting these contracts.
McDermott’s Ralph E. DeJong contributes to an article in The Practical Lawyer that identifies and describes what frequently are the most important considerations in an employment or severance agreement between an exempt organization and its CEOs.
Although multi-jurisdictional compliance is a challenge in relation to every aspect of employment law, the structure of employment contracts and the enforcement of global policies require particularly careful consideration.
The need to coordinate individual country compliance across numerous countries whilst still maintaining a common company culture requires extensive knowledge of national laws and considerable flexibility.
On November 6, 2018 the European Court of Justice (ECJ) passed judgment on two German cases (Max-Planck-Gesellschaft zur Förderung der Wissenschaften eV v Shimizu [C-684/16] and Kreuziger v Land Berlin [C-619/16]) concerning untaken paid annual leave entitlement. The ECJ ruled that accrued annual leave entitlements cannot be automatically forfeited if the worker does not place a request for holiday, and also applies to compensation claims at the termination of employment. These entitlements only cease if the employer has given workers ample opportunity to take the leave in question on time.
US businesses expanding abroad, and international businesses moving into the United States, can find the differences between employment laws both unexpected and costly.
Companies of all sizes are eager to expand their businesses, and their workforce, into new markets. US employers already know that operating in multiple states can feel like operating in different countries because of state- and locality-specific employment laws. But if operating in California versus Wyoming is comparing pools to puddles, then operating in the United States versus other countries is comparing puddles to oceans.
US-based companies looking to expand abroad, and foreign companies opening their first US locations, must proceed with caution before jumping in. One error can commit a business to employing its workforce until retirement, cost months and a small fortune to terminate the employment relationship, or keep it embroiled for years in class action litigation.
If an employee walks out, refusing to work his notice period, can an employer elect to keep the contract of employment alive, without paying the recalcitrant employee?
In the case of Sunrise Brokers LLP v Rodgers [2014] EWHC 2633 (QB), the High Court held that the answer to this question is yes.
Employees are often the greatest assets of a business. Their departure to work for competitors (including their own fledgling businesses) can pose one of the greatest risks to the success of the business. These risks have been emphasized in two recent cases in which employers discovered the hard way (by losing) the need for careful drafting of employment contracts and practical management of the employment relationship from beginning to end.
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