Colorado Executive Employment Dispute Lawyers

By: Robinson & Henry, Attorneys At Law
PublishedApr 24, 2024
2 minute read

“We’ve decided to take the company in a new direction and your ideas no longer fit with our vision. Your last day will need to be today. Please see the HR manager to discuss the terms of your departure.”

These are words that give executives nightmares. However, each year, dozens of yesterday’s Golden Boys and Girls find themselves suddenly out of favor with their company’s ownership and facing unemployment.

The loss of an executive position can be as devastating as the C-level perks were beneficial when the company hired the executive a few years before. Loss of income, damage to professional image, and the compromising of the executive’s ability to gain similarly lucrative employment elsewhere can all come into play if proper precautions have not been taken early on in the relationship to avoid adverse outcomes.

Likewise if company owners, in their eagerness to bring a superstar onto the team, have given away too much in the initial contract, a separation can be extremely damaging to the company’s interests.

The bottom line? Beginning the employment relationship on the right note is key to a happy – or at least tolerable – ending when the relationship comes to a close.

Colorado executive employment dispute lawyers

Where Executive Employment Goes Sour

When an organization brings on an executive, it’s never as simple as shaking hands, sharing the job description, and directing the new addition to his or her office. A lot goes on behind the scenes before the welcome day arrives, and clear, detailed thinking on the part of the new executive and the company power brokers is essential if you want to avoid an unpleasant and potentially damaging executive employment dispute down the road.

The executive employment contract holds to key to both the company’s and the executive’s satisfaction with the relationship and ultimately with the acceptability of separation arrangements when the relationship comes to an end.

Even though goodwill is flowing freely during the hiring process, it is vital that both sides have every detail of the employee/company relationship and expectations clearly expressed in writing before an executive comes on board.

Areas where disputes often arise that deserve special legal review early on are:

  • Stock options and stock purchasing rights
  • Non-payment or underpayment of bonuses, commissions, salary, and other incentives
  • Job description, duties, and expectations
  • Non-compete restrictions**
  • Deferred compensation issues
  • Profit-sharing disbursement
  • What constitutes dismissal “for cause” and what will be the severance

**Non-Compete restrictions were banned by the Federal Trade Commission (FTC) in April 2024. However, these bans remain for “senior-level” executives who made “policy decisions” for the company and/or earned at least $151,164 in total compensation in the preceding year. Future executive non-compete agreements, however, are banned. However, the fate of this ban is uncertain as legal challenges to it are expected. We will update our content when there is a definitive outcome.

Both parties are well advised to have a skilled lawyer familiar with Colorado employment law review executive contracts before anything is signed. Prospective employees should realize they have every right to submit alternate ideas and suggestions for any contract terms put forth by the company, and vice versa.

Written and negotiated carefully with the help of seasoned legal advisors, the contract can set the stage for a rewarding relationship between executive and company. When the day comes for separation, the parting can be amicable and accomplished without misunderstandings over what is due to both parties.

Get Legal Help for an Employment Dispute

If you are involved in an executive employment dispute and need help sorting out your rights and responsibilities, our employment lawyers can assist you. We can help you extricate yourself from a difficult situation with the best possible financial and professional outcome. We are also experts at reviewing, crafting, and negotiating executive contract language for the benefit of our clients. Call 303-688-0944 to begin your case assessment.

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