The contracts negotiated with employees clarify company obligations and expectations. They can also provide the basis for employment litigation or help companies reduce the risk of employees filing lawsuits. Frequently, the most intensive employee-related negotiations occur during onboarding.
Managers and human resources professionals negotiate at length with new hires and recently-promoted employees to properly protect the company with an employment contract. In some cases, business leaders may find themselves concerned about the organization’s vulnerability when a worker is about to leave.
Whether a professional with access to trade secrets has recently submitted their two-week notice or the company is in the process of arranging for their termination for cause, there may be reason to worry about their conduct after leaving the company. Negotiating a new contract related to the worker’s separation from the business could reduce the likelihood of future litigation and/or the employee damaging the company’s reputation and competitive advantages.
California laws restrict organizational options
In many jurisdictions, separation agreements extending the right to severance may include non-disparagement clauses and non-compete agreements. However, California imposes very strict limitations on restrictive covenants for employees. Organizations can no longer enforce non-compete agreements against workers, and there are also extensive limitations on the use of confidentiality agreements, also known as nondisclosure agreements or non-disparagement clauses.
In many cases, severance packages may provide leverage for organizations hoping to prevent former workers from disparaging the company or disclosing trade secrets to others. Particularly in cases where professionals have chosen to exit the organization due to allegations of harassment or discrimination, negotiating appropriate terms in compliance with current California employment statutes can be critical for the protection of an organization.
Business leaders with much on the line may not be in the best position to remain calm and neutral while discussing the matter with an employee. They may require the insight and negotiation support of attorneys familiar with complex business law and current employment statutes.
Responding appropriately to an employee’s two-week notice or preparing carefully before notifying a worker of an upcoming termination can make a major difference for leaders who want to protect their organizations. Those who negotiate clear, thorough agreements with workers exiting an organization can reduce the risk of future employment litigation.