Most high-level executives work pursuant to employment contracts. These contracts usually include both a clause allowing the company to terminate the executive’s employment “for cause” and a clause allowing the executive to resign “for good reason.” A typical employment agreement may define “good reason” to include: a significant change in the nature or scope of the executive’s duties; a material reduction in the executive’s pay; the relocation of the executive’s principal place of employment; or a change in control of the company’s board of directors. If good reason for resignation exists, most employment agreements require the employer to pay the executive a certain payment upon resignation, such as a payment equal to a year’s salary.
An executive who plans to resign for good reason should consult with legal counsel prior to taking action. An employment law attorney can assist the executive with the resignation process, explains Keith Clouse, an employment law attorney who regularly advises executives in contract negotiations and disputes. All too often, despite clear contractual requirements, an employer balks at paying an executive who resigns for good reason. An experienced employment law attorney can deftly handle negotiations with the employer to help the executive receive what is due.
To speak with an employment law attorney about an employment contract or another employment law matter, please contact the employment lawyers at Clouse Dunn Khoshbin LLP at info@clousedunn.com.