Articles Posted in Corporate

My employer was recently purchased by a larger company and they have just asked me to sign a “retention bonus.”  What do I do?

This is a question that I recently got from a client who was in a quandry about what to do with a retention bonus agreement she received.  She was a good employee for the company for many years, enjoyed her job, her benefits, and her co-workers.  She was a faithful, competent employee that wanted to continue to work for the new company.  The problem was that the “Retention Bonus” was a lion in sheep’s clothing as it was really a non-compete agreement in disguise.  The Agreement hit all the buzz words such as a “bonus” but the restrictive covenants that were part of the non-compete portion of the Agreement prevented the employee from working in the very industry that she had grown to love and more importantly had her experience after she separated from the company.

Non-compete Agreements are either negotiated separately when an employee is first hired by a company or buried as a clause in another document.  They typically address preclusions of areas where an employee may work after they separate from a company.  The agreements will restrict a geographical area of employment, potential employers, and be in place for a period of time post-employment.  The company often attempts to prevent the employee from competing with the company or removing or attempting to remove any of its employees. The more restrictive both in area and in time should be reflected in the compensation received.