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Executive Employment Agreements In California

You may be aware that all employees have the right to be compensated for their efforts. Executive employment agreements are often used by high-level workers to define rights and duties. However, a firm or employer may try to refuse bonuses or commissions based on language in an executive employment agreement. Noncompete agreement terms that are overly broad might infringe upon the rights of high-level personnel. Our qualified Encino executive employment agreement attorney defends the rights of executives against a variety of employment law issues.

Haber Law Firm, APC has assisted professionals and executives in greater Los Angeles with all of their employment law issues for years. We have the know-how, resources, and experience to achieve the best possible outcome for you, whether it’s advice on your employment rights or assistance resolving wage concerns or experienced representation to litigation a dispute.

Understanding Executive Employment Agreement Laws in California

In Southern California, the employment contracts given to executives at your firm must be worded in such a way that future conflicts are avoided. With so much riding on it and so much money invested in a crucial job, you as an employer or human resources manager must ensure that your organization is protected against lawsuits caused by the hire. The following are some key aspects to consider while drafting executive employment agreements, as well as what you should know before getting started. It’s highly recommended to work with an experienced executive employment agreement attorney in California for the best results.

Key Elements Of Executive Employment Agreements

Templates just don’t work when it comes to creating these professional executive contract agreements. The demands of an employer are unique to each industry, and the responsibilities of company executives will be unique to the business in general. As a result, it’s useful to hire an Encino executive employment agreement attorney to write these agreements for you. Having a comprehensive agreement in place that benefits the company as well as the executive is critical for avoiding future conflicts. The following are some of the most important components involved in drafting a strong executive employment contract:

  • Noncompete contracts, also known as restrictive covenants or covenants not to compete
  • Confidentiality agreements, also known as nondisclosure agreements, or NDAs
  • Trade secrets, including related issues such as injunctions, damages and the inevitable disclosure doctrine
  • Employee fiduciary duty, including duty of loyalty and the preparatory steps doctrine
  • Tortious/intentional interference with contract
  • Nonsolicitation agreements
  • Unfair competition
  • Severance agreements
  • Contract review
  • Indemnification and advancement

Our experienced Encino executive employment agreement attorney has defended a wide range of clients, including senior executives, corporations, non-profits, partnerships, limited liability companies, and family-owned businesses.  At Haber Law Firm, APC, we understand how the other side thinks and can give you a distinct competitive advantage when entering the contract stages of the employment process.

Key Parts Of An Executive Employment Agreement

Offer, acceptance, and consideration are the three components of every employment contract. Although templates should be avoided when writing enforceable contracts, the basic structure of an executive employment agreement is essentially the same in all circumstances. It’s the specifics that vary based on each situation. The following are some of the most important aspects of an executive employment agreements:

The Preamble

The preamble is there to identify the parties involved in the contract. Simply stated, the preamble identifies who is engaging in the agreement. The conclusion of the preamble will generally summarize what the contract is about.

The Term

The term of the agreement is set forth in this section. The provisions of renewal should also be specified so that the contract does not renew automatically if your company does not want it to.

Rights Reserved

You don’t want to give up your right to quit for cause, transfer the executive as needed, or other ways to ensure that your high standards are met. It will be critical for you to describe the responsibilities of the position. Noncompete and nondisclosure agreements would also be included here.

Conflicts Of Interest & Best Efforts

You have the right to bar your executive from engaging in activities that would create a conflict of interest. You may be entitled to terminate the contract. You have the right to expect your employee to give his or her best efforts. Many executive employment agreements in California contain provisions detailing an executive’s fiduciary responsibility to their organization. The firm has the option of requiring “exclusive services” from the executive.

Compensation & Benefits

Compensations, salaries, benefits, disability plans, health insurance, spending accounts, bonuses, and other topics should all be addressed in detail.

Termination Of The Employment Contract

You should determine what will occur if the employee passes away or becomes disabled during the contract term in detail. In addition, you must make it clear how long you have to terminate the agreement and under what conditions. A typical at-will contract allows either party to leave with 30 days’ notice.

Post-Employment Duties

After the contract has ended, any further requirements should be included. Having clear post-employment duties is essential to an effective executive employment agreement in California.

Dispute Resolution

Once you were able to demand employees to sign arbitration agreements in court, California has severely limited forum selection clauses in employment contracts. Even if you include a forum selection clause in the contract, it may not be enforceable. An employment lawyer can assist with this situation.

Frequently Asked Questions

What Is Executive Misclassification?

Executives, like contractors and employees, are classified as their own category of employment under California law. Executives, unlike other company workers, are not compensated for overtime work. As a result, some California businesses incorrectly classify low-level supervisors or other personnel as executives to avoid their wage and hour rules. This, of course, should be avoided. Under California law, any individual who is classified as an executive must satisfy specific criteria. In other words, a corporation may not just declare that a worker is an executive. The employee must meet all of the requirements set forth in the legislation in order to qualify as an executive.

What Is The Purpose Of Executive Employment Agreements?

In the absence of a fixed term of employment, the assumption is that, unless there is a clear manifestation of the intention to enter into a contract of employment for a specific period of time, an employer may discharge its employees “at will,” or at any time and for any reason or no reason at all, so long as the employee is not fired for an unlawful cause.

Although most businesses do not have a routine practice of negotiating employment contracts with nearly all of their employees, such agreements may be beneficial to both parties. Employment contracts can benefit everyone, from executives to managers to hourly workers, whether it is for the current or future year.

What Is A “For Cause” Provision?

A “for cause” clause in an employment contract usually specifies the reasons for which an employer may terminate a worker’s employment without facing liability for severance pay. The following are examples of “for cause” clauses:

  • A felony conviction or nolo contendere plea in any state or federal court under any law (other than a traffic violation;
  • If a supervisor learns that an employee is negligent in performing his or her essential job functions and continues to do so despite receiving written notification from the employer that specifies how the employee has failed to perform his or her essential job functions and how he or she may substantially fulfill them in the future;
  • a material act of fraud or willful and material misconduct with respect, in each case, to the employer, by the executive; or
  • a willful and material breach of the employment agreement.

Contact An Encino Executive Employment Agreement Attorney

If you would like to discuss your employment agreement with an experienced Encino executive employment agreement attorney, contact us to schedule a meeting with our executive compensation negotiating team. We’ll meet with you, and discuss the trends and package options. At Haber Law Firm, APC, we offer free consultations to better understand your situation and provide you with the best path forward.

Disclaimer

This website contains attorney advertising.  The information provided herein should not be relied upon as legal advice.  Every legal matter is unique and you should always seek the advice of a retained attorney to answer your legal inquiries.  Haber Law Firm, APC, will not represent you unless an attorney-client relationship is formally created in writing.