Sklover & Company, LLC
Serving Executives, Professionals and Senior Managers
4. Negotiating New Employment
“Education is when you read the fine print. Experience is what you get if you don’t.”
– Pete Seeger
Generally, Job Offers are conveyed by means of a written Employment Agreement or Offer Letter. It is then up to the Candidate, assisted by Legal Counsel, to respond. Ideally, the Candidate and his/her Legal Counsel are prepared to do so, as in all matters, preparation is the key to success.
A. Preparing to Succeed
Preparation for new hire negotiation is a matter of:
(i) First, knowing and sharing with your attorney what it is you seek/want/need from the new position. We call this creating a “Term Sheet Wish List.”
(ii) Second, requesting that your prospective new employer send copies of “all relevant papers” to your attorney, who is waiting for them, then providing your attorney’s contact information.
Showing yourself to be prepared to move the process forward without delay, in itself, enhances your perception as one who truly “means business,” and, too, that you are business-like in all your dealings. As Ben Franklin said, “If you fail to prepare, you prepare to fail.”
B. “Perception of Value” – Already “Baked Into” the Offer Made
New Hire decisions and Job Offers are based primarily on a candidate’s “Perception of Value,” that is, “How will this candidate contribute to our success?” That perception is fairly well set before negotiations begin, not raised during them. Thus, Employment Attorneys do not commonly achieve additional “rewards” during new-hire negotiations for clients; their primary value-add here is identification, assessment and reduction of related “risks.”
C. The Risks Lie in “The Papers,” and in What Is Missing From Them, Too
What are the risks? Simply put, the various ways you might lose your expected “rewards.” Where are the risks to be found? Both (a) in the “papers,” and, often, (b) what is missing from them.
Illustration: An Employment Agreement provides 50,000 shares of stock as a key compensation component. Sounds positive. However, share awards are almost always worded as “ to be recommended,” “ subject to Board approval,” and “ governed by an equity “plan,” and an “ award agreement.”
Each of those four provisions are ways in which – if not addressed adequately – the share award may be lost or rendered valueless, even though “within the rules.” Each is a risk of loss, and can be addressed, so long as we identify them by document review that is (a) in minute detail, (b) simultaneously with other documents, and (c) in relation to one another.
Most offer letters and employment agreements contain a clause that provides that “Nothing outside of this document is binding on the parties.” That provision – often called an “Entire Agreement” clause – must be respected. Thus, earlier proposals, term sheets, conversations and assurances are nice, but by this provision rendered null, void and of no effect. Simply put, “Don’t rely on what you don’t read in the papers.”
Contrariwise, many offer letters and employment agreements mention that the terms of another document – for example, a “Covenants Agreement” – is deemed “incorporated by reference” into this agreement. Wherever we read that, we need to review that other document, as well, as in this way it has become a part of this document.
D. A Detailed Memorandum of Suggested Clarifications Works Best
Taking into account our client’s “Term Sheet Wish List” and what we have found, or not found, in the papers, we prepare a plain-English, detailed memorandum of what we suggest should be inserted, clarified, deleted, or otherwise used to modify the papers. We also indicate precisely where and by what words it should be done. When deemed “just right” by our client, we then share it with the employer’s legal counsel.
Over 36+ years of this work, we have found this method better than any other used, due in large part to its simplicity, transparency and efficiency.
E. Simultaneous Careful Attention Must Be Paid to Resignation “Requirements”
We strongly recommend that clients never resign from their existing positions prior to both sides signing all “papers” for the new position. That said, while we negotiate new employment issues, we cannot ignore the resignation requirements, both those necessary to fulfill contract duties and to ensure a dignified and rather seamless departure from the existing position.
Among common resignation requirements are (i) contractual notice periods and mechanisms, (iis) notice periods to observe to avoid forfeiture of bonus, equity and benefits, (iii) garden leave provisions, (iv) potential non-competition pitfalls, and (v) those informal ones – far too often overlooked – that are needed to show respect, concern and appreciation to those who have the same to you over time.
F. Give and Take, and Give and Take Again
If one side to a negotiation “wins” all of its points, the long term outcome is rarely a positive one. Most employers do recognize that fact. That said, some employers simply decline to consider any clarifications or modifications to their “papers.” It is for this reason that clients need to be reminded that “Negotiation is never over.” That is, what is not achieved today may be renegotiated next year, and the year after that, as well.
And, too, one never gets all one wishes at the start of a new endeavor. There is just one lesson to bear in mind: You just might need a greater “perception of value” to get the rewards and risk limiters that you did not get this time around. That is the real challenge: enhancing the perception of your value; when that value warrants it, you tend to get what it is you seek.
Risks, once understood, are “one half resolved.” Risks arise in all we do, every day. We are never able to remove them all. But just being aware of what risks there are is important, so we can navigate around them in later days. “Just because waters are calm, that does not mean there are no alligators.” Nigerian Proverb.
We offer confidential telephone consultations as a first, preliminary step in providing counsel to those with workplace or career problems or opportunities. They are available days, evenings and weekends, depending upon urgency. For those with questions related to matters on which we were retained and worked with them during the preceding 12 months, brief discussions, without review of new documents, are provided without charge. For others, our Schedule of Consultation Fees can be found on our About page. Consultation arrangements can be made with Ms. Vanessa Mustapha or Ms. Phyllis Granger at 212.757.5000, or by email to Vanessa@ExecutiveLaw.com or Phyllis@ExecutiveLaw.com.
(If you have any thoughts, comments or suggestions about these Insights, please consider sharing them with us, by forwarding them to us at Vanessa@ExecutiveLaw.com. Thank you, in advance.)
© Copyright 2019 Alan L. Sklover. All Rights Reserved and Strictly Enforced.
1. Your Unique Career Brand
“Either you are distinct, or you will become extinct.”
– Tom Peters
We are enthusiasts when it comes to the practice and pursuit of branding and, of course, when it comes to employment, the notion of “career branding.”
Each of us has a unique personal brand, namely what others think of when they think of us. It is their sum total view of what we offer the world, our value to others, and to our clients, customers, employers and colleagues. Your brand precedes you, empowers you, and follows you, wherever you go.
Your “career brand” is what your present employer and all potential employers think of your potential value to them, and thus what they need to offer you in return for your working for them. Your knowledge, skills, relations and reputation have taken a great deal of time and effort to learn, acquire, and develop, and is a reflection of your personality, character and the standards you have set for yourself.
You create your brand each and every day, whether you know it or not. If you don’t proactively create and enhance your career brand, you leave that critical task to luck and chance, or worse, permit others to define it for you.
The employment marketplace is an increasingly competitive place. New York Times columnist Tom Friedman has written “Good enough is no longer good enough.” We could not agree more. If you don’t have a distinctive, attractive, outstanding career brand, in the employment marketplace you are likely perceived as little more than an easily replaceable commodity.
Most of our clients have devoted and continue to devote significant effort and imagination to creation and enhancement of their own, distinctive career brand, and enjoy the multiple and varied “fruits” of their efforts. Their experiences are as inspiring to us as they are rewarding for them, in the broadest sense and spirit of those two words.
- Your Unique Career Brand
- Managing Employment Risks
- The Recruitment Phase
- The Negotiation Phase
- Equity “Trap Doors”
- Climbing the Ladder
- If Difficulties, Disputes or Allegations Arise
- Navigating Employment Departures
- Continuing Restrictions
- Extending Career Longevity