Not all business relationships end amicably. There are times when a business owner feels compelled to terminate a person’s employment but may be concerned about the potential for litigation, disclosure of trade secrets, or even work being done for a competitor. A St. Louis employment release lawyer can help in these situations.
An employment release is a valuable tool for business owners, but there are limitations on what they can accomplish under the law. Given the risks of drafting employment contracts on your own, it is vital to speak with a skilled attorney about a release.
An Employment Release (release of claims) is an agreement between an employer and an employee whose employment has been terminated from that company. The release of claims is offered in return for the acceptance of a severance package, which serves as consideration for the contract. The intent of the document is to limit potential litigation for reasons such as discrimination or wrongful termination.
The release serves many other purposes, as well. It will also often include a non-disparagement clause, a confidentiality agreement, and a non-compete clause. Failure to abide by these provisions serves as a breach of the agreement, in which case the agreement will have provided a clause for damages.
These agreements could be drawn narrowly or broadly depending on what the two sides agree on. A former employee could waive certain legal rights while retaining others. Alternatively, broad language could cover any type of grievance the employee might have.
Generally speaking, it is a good idea to have an attorney review any employment-related document before it is executed. This is especially important for employment releases and severance agreements. There may be terms on which the contract is silent on its face that may potentially be affected by executing the agreement.
A terminated employee has little reason to make a promise to their former employer not to sue them without receiving anything in return. That is why employment releases often come as part of a severance package.
Severance pay is often the consideration needed to reach an agreement with a former employee. In some cases, an employment contract might determine what the severance pay will be. In others, the parties may negotiate it at the same time as an employment release. While there are options available, it is rare that an employee would sign a release without something in return.
Some employment releases include non-compete clauses. However, these clauses can be difficult to enforce under state law. An employer’s reason for including a non-compete clause is key to determining whether it is enforceable under the law. For example, employers cannot enforce a non-compete clause in an effort to block future competition. Instead, these clauses are only valid if they limit unfair competition. This generally falls into one of two categories: trade secrets and customer data.
Non-compete agreements can be enforced when it comes to taking trade secrets from an employer on the way out. Any information that is secret, has a monetary value, and could not be deduced by competitors on their own qualifies as a trade secret.
Non-compete clauses may also bar employees from taking customer data from their previous employer. This could include contact information, pricing, or marketing plans, among other things. An employment release lawyer in St. Louis could advise on whether a non-compete clause is valid.
If you are considering terminating an employee, protecting your trade secrets and client base is a priority. An employment release could help you do that and avoid any potential lawsuits in the process.
There are complicated state laws that cover these releases, making it imperative to reach out to an experienced legal team for assistance. Let a St. Louis employment release lawyer advise you on your rights.
Contact our firm to schedule an appointment with a lawyer who can draft or review an Employment Release for you or your company.